Housing starts in the US increased more than forecast in May, led by a jump in the West as other parts of the country languished.
Work began on 560,000 houses at an annual pace, up 3.5% from the prior month and exceeding the 545,000 median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Building permits, a sign of future construction, also increased.
Falling real estate values and the threat that foreclosures will push prices even lower mean the construction industry will continue to lag behind other parts of the economy. Joblessness exceeding 9% indicates that a rebound in housing will take years to develop.
Mr Patrick Newport an economist at IHS Global Insight in Lexington, Massachusetts said that “Builders just aren’t making profits and so they aren’t putting out homes. “There’s just general uncertainty about the economy and housing prices and that’s what’s keeping housing from improving.”
Another Commerce Department report today showed the current- account deficit in the U.S. increased less than forecast in the first quarter as the country’s income surplus climbed to a record. The gap, the broadest measure of international trade because it includes income payments and government transfers, widened to USD 119.3 billion from a USD 112.2 billion shortfall in the fourth quarter.
Fewer Americans than forecast filed applications for unemployment benefits last week, indicating the pickup in firings that began in April is abating, figures from the Labor Department also showed. Jobless claims declined by 16,000 to 414,000 in the week ended June 11.
The Commerce Department revised April’s total to a 541,000 pace, up from a previously estimated 523,000.
Building permits climbed 8.7% to a 612,000 annual pace in May, the most this year. The increase was led by a 23% jump in applications for work on multifamily units. They were projected to drop 1.1% to a 557,000 level, according to the survey median.
Construction of single-family houses increased 3.7% to a 419,000 rate in May from the prior month. Work on multifamily homes, such as townhouses and apartments, rose 2.9% to an annual rate of 141,000.
(Sourced from Bloomberg)
