Upbeat US data set to ease Fed pressure US economic data allayed anxieties surrounding rising interest rates that have roiled markets, easing pressure on the Federal Reserve as it considers slowing its support for the recovery. US home prices posted their largest year-over-year gain in seven years in April, while sales of new houses climbed in May to an almost five-year high, showing further strength in the country's housing market. Consumer confidence jumped last month to its highest level in more than five years, and better than expected durable goods orders signalled some stability in the manufacturing sector. The brighter figures will be encouraging to Fed officials who are counting on an uptick in the economy to start winding down the central bank's $85bn per month in asset purchases, known as QE3. Investors have balked at the timeline laid out last week by Ben Bernanke, Fed chairman, for cutting and then ending US central bank bond purchases by the middle of 2014, driving stocks and Treasury bonds down. But the positive data helped stabilise markets and took some heat off the Fed. "It probably reinforces the [Fed's] belief that the right thing to do is to begin tapering the programme at some point later this year - that things are moving in the right direction," said Kevin Logan, chief US economist at HSBC in New York. "Maybe criticism will be more muted if data conform to their expectations," Mr Logan added. However, economists were cautious about giving too much weight to Tuesday's data, given that higher impact figures on monthly payrolls and manufacturing activity are not due until next week. "In general things are a little firmer but we haven't had any of those first tier indicators for a little while so we'll see what they bring," said Jan Hatzius, chief economist at Goldman Sachs. The Standard & Poor's/Case-Shiller home price index, which tracks 20 metropolitan regions across the US, showed prices adjusted for seasonal variations rose 12.1 per cent from April 2012. This was the biggest year-over-year gain since March 2006, coming ahead of the previous month's 10.9 per cent annual rise and forecasts of a 10.9 per cent increase. The data predate the sharp uptick in mortgage rates that began in early May but could offer some comfort that the housing market is in a strong position to absorb those rises. Separate commerce department data showed new home sales rose 2.1 per cent in May to an annual rate of 476,000 homes, the most since July 2008. That exceeded forecasts of 460,000 and April's rate of 454,000. The supply of homes at the current sales rate was 4.1 months compared with 4 months in April. There were 161,000 new houses on the market at the end of May, up from 157,000 a month earlier. "We look for lean inventories of both new and existing homes to support homebuilder activity and home prices in the coming quarters," said Michael Gapen, economist at Barclays. We would expect rising interest rates to pass through to housing activity with a lag, and we look to the June and July reports to further assess the response of housing demand to higher mortgage rates. Consumer confidence surged in June to its highest level in more than five years. The Conference Board's index of consumer attitudes on the economy rose to 81.4 - the highest since January 2008 - from a downwardly revised 74.3 the month before, beating expectations of 75.4. Fewer consumers were concerned over their income outlook and more see jobs opening up six months from now. Expectations for general business conditions showed significant improvement over April. Another report showed durable goods bookings - those meant to last at least three years - climbed 3.6 per cent for a second month in May, according to the commerce department. Economists surveyed by Bloomberg had called for a 3.3 per cent uptick. "The unexpected development here was that gains were generally broadly based with the only major category declines posted in orders for vehicles and parts and fabricated metals," said Tim Quinlan, economist at Wells Fargo Securities. The volatile transportation component surged 10.2 per cent after an 8.3 per cent boost in April. Most of the increase was because of a surge in commercial aircraft orders, which jumped 51 per cent after climbing 18.3 per cent the prior month. Excluding transportation, orders edged 0.7 per cent higher after a 1.7 per cent increase in April. Non-defence capital goods orders excluding aircraft - a category viewed as a proxy for business investment plans - rose 1.1 per cent following a 1.2 per cent rise in April. Shipments of these goods rebounded 1.7 per cent in May following a 2 per cent drop the month before. Businesses ordered more computers, machinery and primary metals, suggesting companies could be growing more confident about the country's economic outlook.