The US economy has been given an unexpected boost by strong growth in demand for manufactured durable goods, according to data released yesterday by the US Department of Commerce.

The data comes in tandem with yesterday's publication by the US Federal Reserve of analysis showing continued and broadly based economic strength, as well as further evidence of strength in the US housing market.

Department of Commerce data shows that demand for durable goods rose in June by 1.4 per cent compared with May. This follows even stronger growth of 6.4 per cent in the month of May.

According to a recent Reuters poll, durable goods orders had been expected to fall by 1 per cent in June. The sale of new house prices also rose strongly in June compared with May, by 4 per cent, to a level 14 per cent higher than in June 2004. This performance is also in excess of market expectations.

The US is emerging from an era of historically low interest rates in the wake of the events of September 11th, 2001.

During that period, mortgage borrowing grew strongly, prompting the Federal Reserve to raise its federal funds rate from a low of 1 per cent in June 2003 to 3.25 per cent now.

The US is by far Ireland's largest export market, absorbing more than one-fifth of total Irish exports.

Although half of these are high-technology goods exports related to the activity of US multinationals in Ireland, the US is nonetheless a significant market for indigenous exporters.

Continued strength in consumer durables and in home purchase makes it more likely that the Federal Reserve will continue its policy of gradual monetary tightening.

The Federal Reserve yesterday published further evidence of continuing economic strength in its "Beige Book", a regular and broad examination of trends across the US economy.

Activity continued to expand in June and July in the retailing, services, construction and financial sectors according to the analysis.

The Beige Book is regarded by capital markets as an important signal of interest rate intentions.