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Relief appears on U.S. housing front

DON RYAN/AP

Scratch housing off the list of factors dragging on the U.S. economy.

The number of Americans buying homes in January hit a two-year high.

Greater housing turnover, like housing starts, is an important leading indicator. When people move, they also renovate, decorate and buy furniture. That creates jobs and economic activity.

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It's far from a boom. But it suggests the country is over the worst of the foreclosures, tumbling prices and all negative consequences that come with them.

The National Association of Realtors said Monday that its index of sales agreements rose 2 per cent last month to a reading of 97 – the highest reading since April, 2010. The index is now tantalizingly close to 100, which is the measure of health in the industry.

The rest of the week could bring more welcome news in the form of consumer confidence (Tuesday) and new jobless claims (Thursday).

The U.S. economy is finally generating steady and consistent job creation. The U.S. economy created 1.8 million jobs last year, and the pace appears to be accelerating this year.

This is all good news for U.S. President Barack Obama, who faces re-election in November.

An improving economy – even modestly – will make it tougher for his eventual Republican rival.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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