US housing starts and producer prices up
The US economy received a boost today after the Commerce Department revealed a rise in housing starts for the month of October, recovering from the slump in September.
According to the Commerce Department, construction of new US homes surged 8.9% during the month to a seasonally adjusted annual rate of 574,000 properties.
The figure was in line with market expectations and suggests the US housing market is on the road to recovery – an area which is crucial to the recovery of the world’s largest economy.
Meanwhile, applications for building permits, a barometer of future home construction, also jumped by 6% to a seasonally adjusted annual rate of 584,000.
Commenting on the figures, Patrick Newport at IHS Global Insight said: “Because weather plays tricks on the numbers, we recommend looking at housing permits to pin down underlying trends.”
“This was a good report, not because of the jump in starts, but because of November’s solid increase in permits,” he added.
In other news, the US Labor Department reported a rise in producer prices of 1.8% in October – beating analysts expectations.
The rise was due to higher petrol costs on the back of higher crude oil prices.
Separately, the US dollar fell today on speculation that the Federal Reserve will keep interest rates at their historically low level of between 0% and 0.25%, where they have been since December 2008.
The dollar has been falling after the Fed recently said interest rates will remain low for some time to come, which makes the US currency less attractive to investors.
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