US housing starts rise, producer prices fall
The recovery in the US was thrown into doubt today after the Commerce Department revealed housing start figures for the month of September.
While construction of new US homes rose during the month, it was below economists’ expectations.
According to the Commerce Department, construction of new US homes rose 0.5% during the month to a seasonally adjusted annual rate of 590,000 properties – compared with the revised 587,000 units the previous month.
Analysts had expected the rate to exceed the 600,000 mark.
In addition, the rate was still down by 28% on the 822,000 homes started in September last year, the figures showed.
Meanwhile, applications for building permits, a barometer of future home construction, fell by 1.2% – the biggest fall since the 2.5% reported in April.
Dan Cook at IG Markets comments: “It doesn’t bode too well. We really want to see an uptick here, as obviously housing is so important,”
“If we can get more starts, we’re putting more people to work and that would be very positive, and unfortunately we just didn’t see that today,” added Mr Cook.
In the meantime, the US Labor Department reported an unexpected fall in producer prices of 0.6% in September – analysts had expected prices to remain unchanged after growing 1.7% in the previous month.