US existing home sales rose in November for a second straight month and consumer confidence hit an eight-month high in December, according to business reports today.
Other reports showed business activity expanded in the Midwest this month, suggesting the ailing factory sector could be finding its footing, while initial claims for state jobless benefits edged up slightly last week.
Prices for US government bonds fell, the dollar rose and stocks pared losses after the data, which was stronger than expected.
Traders saw the data as lowering chances the Federal Reserve would cut interest rates early next year.
The National Association of Realtors said the pace of existing home sales rose 0.6 per cent in November, defying Wall Street forecasts for sales to ease slightly and providing the latest suggestion that housing activity was stabilising after a steep drop.
Separately, the Conference Board said its index of consumer sentiment climbed to 109.0 in December - the highest since April - from an upwardly revised 105.3 in November as consumers' views on the labour market improved.
In addition, the National Association of Purchasing Management-Chicago said its gauge of US Midwest business activity rose to 52.4 from 49.9 in November, moving back above the 50 line in a sign activity was expanding.
"Across the board the data was strong - it was a royal flush," said Michael Woolfolk, currency strategist at Bank of New York.
He said the increase in the Midwest business barometer was particularly welcome, calling it "definitely good news for the underlying fundamentals of the US economy."