Disappointing economic reports heightened concerns Wednesday about the strength of a U.S. recovery.

New-home sales tumbled to a record low in May after a popular homebuyer tax credit expired, the government said, further dampening hopes of a housing recovery.

The Federal Reserve also downgraded its economic assessment, noting "developments abroad," a veiled reference to Europe's debt crisis, are hurting the U.S.

New-home sales sank 32.7% to an annual rate of 300,000, much less than the 430,000 expected, and the lowest since records began in 1963, the Commerce Department said. Sales were down 18.3% vs. a year ago. [Read the full article]

Consumer spending rose 0.2% last month after no change in April, the Commerce Department said Monday.

Incomes rose 0.4%, the sixth gain in seven months, boosting household finances and potentially providing fuel for greater future spending.

The increase came from spending on services — much of that likely the result of Americans using more electricity as the weather warmed up. Money spent on goods declined.

Consumers "are still not setting this economic recovery alight, but nor are they rolling over in the face of ... high unemployment and lower (stock) prices," Paul Dales, an economist at Capital Economics, wrote in a note to clients. [Read the full article]