Will signals of a failing economy cause the Fed to render even more monetary stimulus?
*
''Builders continued to suffer in June as the stalling US housing
market reduced new residential construction to its slowest rate in
eight months.
US housing starts fell by 5 per cent to an adjusted annual rate of
549,000 last month, commerce department figures showed on
Tuesday. That was a bigger fall than Wall Street analysts had
projected and left starts down 5.8 per cent from the same month a year
ago.
The June drop was an improvement from May, when housing starts plunged
by 14.9 per cent in the wake of the expiry of a government stimulus for
the sector. Driving the downturn last month was a plunge in new
construction for multi-family dwellings, while construction for
single-family homes slipped modestly.
'This report confirms last month's message of just how important
government manipulation efforts were to supporting housing activity in
the recent past,' said Joshua Shapiro, chief US economist at MFR, of
the expired first-time homebuyer tax credit. 'While we are unlikely to
return on a sustained basis to severely depressed activity levels seen
a year and more ago, neither are we likely to return any time soon to
the levels that were temporarily reached due to the tax credit
programme.'
New home construction has been hampered by a glut of housing already on
the market at reduced rates due to foreclosures and distressed
sales. Compared with their housing boom peak in 2006, starts are
off by 76 percent.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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