US home building falls, unemployment rises

Figures from the US Commerce Department have revealed that homebuilders commenced work on the least number of homes in December.

Housing starts fell 15.5%, to an annually-adjusted 550,000, well below analysts expectations of 605,000, and the lowest figure since records began in 1959.

As is the case with the UK housing market, the US has been hit by the credit crisis, which has resulted in a lack of mortgage finance and is dragging the housing market down.

According to David Resler, chief economist at Nomura Securities International, the recession is likely to result in a further lack of activity in the housing market.

In the meantime, figures released from the US Government showed that new claims for unemployment benefits rose by 62,000 to 589,000 in the week to January 17.

Last year, around 2.6 million Americans lost their jobs. The figures show what a task President Obama has ahead of him. He recently announced a stimulus package which will save 4 million jobs.

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