NEW YORK (Reuters) - Consumer sentiment rebounded in July from a 28-year low and business investment rose unexpectedly last month, according to data on Friday that showed rare signs of resilience for the U.S. economy.

Data from the struggling housing market also contributed to the less gloomy picture. New home sales in June were not as weak as expected, though few doubt it will take time for housing to recover from its worst slump since the Great Depression.

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence rose to 61.2 in July from 56.4 in June.

The June reading was the lowest since 51.7 in May 1980, which was also the weakest reading ever. The index dates back to 1952, though the survey has been conducted since 1946.

Analysts saw plenty of reasons to be skeptical of a long-lasting recovery in sentiment, seeing much of the improvement linked to government economic stimulus efforts and falling energy prices -- both of which may be temporary.

"It's too early to say that we've turned the corner because the tax rebates are temporary," said Gary Thayer, senior economist at Wachovia Securities in St. Louis, Missouri.

"We are getting some lower energy prices but we're heading into the hurricane season so there's some risk that energy prices could rise again if there's a major hurricane."

On Wall Street, stocks added to their earlier gains after the stronger-than-expected consumer sentiment and housing data, while the dollar rose against the euro and yen.

Government bonds, which perform better during times of economic weakness, extended their losses.

THE HOME FRONT

Sales of newly constructed U.S. single-family homes fell 0.6 percent in June to an annual pace of 530,000 annual pace. Economists polled by Reuters expected sales to slow to 500,000 from a previously reported 512,000 in May.

Earlier, mortgage finance giant Freddie Mac reporting its retained mortgage portfolio jumped by more than a 33 percent annual rate in June to about $792 billion.

The pace at which Freddie Mac, and its larger counterpart Fannie Mae, expand their mortgage purchases is seen as critical at a time when the government is relying heavily on the two companies to stabilize the housing market.

Investor concern has centered on whether Freddie Mac and Fannie Mae have sufficient capital to keep buying mortgages at a robust clip as losses mount from rising loan delinquencies.

The U.S. Senate voted on Friday to limit debate on a bill aimed at shoring up both the housing market and mortgage finance companies Fannie Mae and Freddie Mac, paving the way for a final vote expected on Saturday.

Earlier this week, the White House lifted a threat to veto the measure, which has already passed the U.S. House of Representatives. The bill includes provisions for the Treasury Department to offer Fannie and Freddie a bigger line of credit and buy stakes in the companies, if needed.

Data earlier in the day shed light on the depressed state of the housing market, with U.S. home foreclosure filings up 14 percent in the second quarter, according to real estate data firm RealtyTrac.

Meanwhile, new orders for long-lasting U.S. manufactured goods rose unexpectedly in June on a surge in defense orders, while a gauge of business investment was also higher than forecast, a government report showed.

Durable goods orders rose 0.8 percent in June, after a revised 0.1 percent gain in May. Non-defense capital goods excluding aircraft, viewed as a barometer of business spending, jumped 1.4 percent after a revised 0.1 percent decline in May.

"The overall pattern of business investment in the U.S. is holding up pretty well," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

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Home foreclosure filings during the second quarter were reported on 739,714 U.S. properties, up 121 percent from a year earlier, RealtyTrac, an online market of foreclosure properties, said in a report.

The figure is a total of default notices, auction sale notices and bank repossessions between April and June.

"Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

Indeed, 48 of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter, he said.

The surge in foreclosures indicates an increasing number of homeowners are struggling to make mortgage payments amid the worst U.S. housing market downturn since the Great Depression.

RealtyTrac, based in Irvine, California, said the national foreclosure rate in the second quarter was one foreclosure filing for every 171 U.S. households.

Properties that have been foreclosed on or repurchased by a bank accounted for 30 percent of total foreclosure activity in the quarter, up from 24 percent in the first quarter, Saccacio said.

"This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system -- at which point the housing market can regain some sense of normalcy. Of course, if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery," he said.

Nevada had the highest foreclosure rate in the country, with one foreclosure filing for every 43 households, followed by California and Arizona.

All three states had been among the hottest U.S. housing markets during the boom years from 2000 to 2005.

Default rates and foreclosures have jumped as the housing market deteriorated. As interest rates on adjustable rate mortgages reset higher, many homeowners who have been unable to sell their homes or refinance existing home loans amid a drop in home prices have been forced into foreclosure.

Nevada had 24,657 foreclosure filings in the second quarter, up nearly 26 percent from the previous quarter and up 147 percent from the second quarter of 2007.

California foreclosure activity in the second quarter increased 19 percent from the previous quarter. One in every 65 California households received a foreclosure filing during the quarter.

California, the most populous U.S. state, reported 202,599 foreclosure filings, the most of any state and up 198 percent from the second quarter of 2007.

Arizona had one foreclosure filing for every 70 households in the second quarter, with 37,230 filings, up nearly 36 percent from the previous quarter and 272 percent higher than the second quarter of 2007, RealtyTrac said.

Florida ranked fourth with one foreclosure filing for every 78 households in the second quarter, with 109,433 filings, up nearly 25 percent from the previous quarter and 182 percent higher than the second quarter of 2007, RealtyTrac said.

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WASHINGTON (Reuters) - The national minimum wage is set to increase by 70 cents on Thursday to $6.55 an hour, the second of three increases to take place after the wages earned by the nation's poorest and least educated failed to rise for ten years.

 
In an economy where the richest 20 percent in the country earned more than half of all income earned, experts say the increase is more than due.

"It's about as perfect an economic stimulus as you can get. Minimum wage raises go directly to those who absolutely need to go out and spend it on food and healthcare," said Holly Sklar, director of Business for Shared Prosperity, a network of business owners supporting minimum wages.

Wages have not kept pace with inflation.
Taking into account higher prices paid for food, healthcare, housing and a range of other necessary expenditures, wages are equal to those paid 40 years ago.

"It really comes down to what sort of economy are we running here," said John Arensmeyer, founder and Chief Executive Officer of the Small Business Majority, a national organization of business entrepreneurs.

"It's a moral issue, but it's much more than that, it's an economic issue. I don't think we should be trying to compete with third world countries on slave wages," said Arensmeyer.

A year ago, the first of three increases was mandated. Next summer the wage will rise to $7.25, but these increases come as more than half of U.S. state governments have raised minimum wages on their own above the federal standard, with a handful tying increases to annual inflation, an important criterion as higher energy, food and healthcare costs have cut into earnings.

HIGHER WAGES COULD MEAN JOB CUTS

But mandating a federal increase in minimum wage has its critics. Many argue that this will hurt small business, reduce jobs, and add more of a tax on this economy that is already limping through the worst housing slump since the Great Depression.

"In terms of timing, this couldn't come at a worse time," said Richard Vedder, Ohio University Professor and American Enterprise Institute Scholar, a conservative think tank here.

Already the economy has shed 438,000 jobs this year and will likely lose more as businesses cut back amid a credit crisis brought on by the worst housing collapse since the Great Depression.

Vedder warns that weakest segment of the workforce, teenagers, unskilled workers and minorities stand to suffer the most from the hike.

"When the minimum wage goes up, some of these workers tend to be disproportionately minorities and they are younger people who naturally don't have the skills. These are the people that are most impacted," he said.

Not only will the increase reduce jobs but employers will "game the system" by cutting back on benefits such as healthcare. "You could see a cut in some of these alternative benefits," he warns.

Other critics agree and caution that the imposed increases do nothing to reduce poverty.

"These decisions end up hurting the very employees that wage increases are meant to help," the National Restaurant Association said in a policy statement.

NO EVIDENCE OF JOB LOSSES

Experts on the other side of the fence say there is no evidence that minimum wage increases lead to job losses and they emphasize that more wages earned translates into more money spent, helping local economies and small businesses.

"We already have a lot of variation (in minimum wages) and there is no evidence of job losses," said Arindrajit Dube, labor economist with UC Berkeley Institute for Research on Labor and Employment.

He and others note that the sporadic increases are less effective and that regular increases, indexed to rates of inflation, would be a better approach.

"We went from 1997 to 2007, 10 years of complete stagnation of the minimum wage and a decline in the minimum wage in real terms and that just seems not a good way of doing policy," Dube said.

AFL-CIO President John Sweeney, the nation's largest labor federation, applauded the latest increase but called it a modest step.

"To truly aid working families, we need to build an economy that works for all, not just the top 10 percent," he said. "Rising inflation -- especially in gas prices -- continues to eat away at the value of the minimum wage and all of wages."

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