Question:  This is our final answer to BuyandHolder Bryan Fish's question about the possible impact government reports have on stocks.

We think the information in the two previous columns combined with this week's government data is helpful to those of you who believe in buying and holding stocks - those of you who are in the market for the long term.

On August 14th we reported on the rise in productivity (click HERE) to read and then on the 21st, on the decline in nationwide unemployment (click HERE) to read.

Now we have good news regarding new home sales and durable goods orders.

New Home Sales

New homes sales were up almost 10% in July from June according to the Commerce Department. Sales rose to a seasonally adjusted annual rate of 433,000. According to the government, that's the highest pace since last September.

Another way to look at it is that the sales rate is up 31.6% from this year's low which took place in January, 2009.

Sales were highest in the Northeast (up 32.4%), followed by the South where they were up 16.2%. In the West, the increase was only 1% and in the Midwest, sales actually dropped by 7.6%.

A word of caution? it is possible a portion of the increase is due to the federal tax credit which grants up to $8,000 to first-time home buyers. (This credit ends on November 30th.) Nevertheless, the statistics overall are positive.

Durable Goods Orders

According to the Commerce Department, new orders for manufactured durable goods rose in July by 4.9% -- the largest percentage since July 2007. And, it was the third increase in the last four months.

The figures took analysts by surprise; they had predicted only a 3% gain.

Before we go further, let me note that the phrase durable goods applies only to goods expected to last at least three years, such as cars and planes The increase in durable goods orders, was in fact led by the aviation industry followed by the automobile sector.

Car orders actually rose 0.9%, perhaps due in part to the "Cash for Clunkers" program, officially known as the Car Allowance Rebate Scheme. The plan gave owners of old cars up to $4,500 when they traded in their "clunker" for a new model.

According to the U.S. Transportation Department, the Clunkers scheme, which ran from July 1 to August 25, created 700,000 new car sales. The total amount of rebates paid out was approximately $2.88 billion.

Bottom line:

Increases in these two official government-based economic indicators bode well for stocks, but bear in mind that we still have serious unemployment and a huge budget deficit. Nevertheless, we are certainly in a better place than we were a year ago.

On a more personal note, if you are currently a renter in one of the areas of the country where new housing sales are on the rise, and if you were eventually thinking of buying a house, this might be the time to speed up your search!

Good luck!