US economy shows signs of recovery

The US has registered surprisingly strong economic data, suggesting the recovery may be gathering steam.

New home sales a lead component of past recoveries, surged 16% in January to the highest rate since July 2008.

The Conference Board index of consumer attitudes rebounded to 69.6 in February - the highest since November - from an upwardly revised 58.6 in January. It suggested Americans had recovered from the shock of a sharp rise in payroll taxes over the New Year.

Markets had been rattled a month ago by the size of the knock to consumer sentiment from the tax rise, which came as part of a deal between Democrats and Republicans to avert the much bigger round of automatic tax rises and spending cuts dubbed the fiscal cliff.

Another hangover from that deal is that some $ 85 b of spending cuts, or 'sequesters', that had been due on January 1 have instead been delayed to the end of this week, with Congress currently trying to hammer out a deal to postpone the date even further.

BBC