New home sales drop, but spending rises

December 24, 2009

WASHINGTON - Americans are starting to spend a bit more money, but not enough to power a strong economic recovery. Consumer spending posted its second straight monthly increase in November, rising 0.5 percent, the government said Wednesday. But new homes clearly weren't on the shopping list. New home sales plunged unexpectedly to the lowest level since April. At the same time, economists said the economy was much improved from this time last year, when the nation was gripped by the financial crisis. The 11 percent slump in new home sales from October's pace shows consumers are taking their time following an extension of a tax credit for first-time and repeat buyers.

- Associated Press

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