November 22, 2017

U.S. Housing Starts and Permits Rise Less Than Expected

The Commerce Department said on Friday that housing starts increased 5.9 percent to a seasonally adjusted annual rate of 896,000 units. June’s starts were revised up to show a 846,000-unit pace instead of the previously reported 836,000 units.

Economists polled by Reuters had expected groundbreaking to rise to a 900,000-unit rate last month.

Permits to build homes rose 2.7 percent in July to a 943,000-unit pace. Economists had expected permits to rise to a 945,000-unit pace.

“It’s not a surprise given the recent rise in mortgage rates. I think we are looking at a situation that some air is coming out of the housing recovery given the higher mortgage rates,” said Michael Hanson, senior economist with Bank of America Merrill Lynch in New York.

“At this point, affordability has not changed that much on a historical basis. Housing affordability remains high, but fundamentals are less favorable for new buyers than they were a couple of months ago.”

Mortgage rates have spiked in anticipation of the Federal Reserve tapering the $85 billion in bond purchases it is making monthly to keep interest rates low and stimulate the economy.

Economists expect the U.S. central bank to make an announcement on tapering at its policy meeting next month.

U.S. stocks were poised to open slightly higher after the data. The dollar pared gains against the yen and fell to a session low against the euro.

The residential construction figures last month could also be a reflection of supply constraints. Builders have been complaining about a shortage of labor and materials.

Still, residential construction remains on a firmer footing and should again contribute to economic growth this year.

A report on Thursday showed confidence among single-family homebuilders neared an eight-year high in August, with builders fairly upbeat about sales prospects over the next six months.

Though residential construction only accounts for about 3.1 percent of gross domestic product, housing has a wider reach in the economy. Analysts estimate that for every single-family home built, at least three jobs lasting for a year are created.

Economists expect average monthly housing starts for the whole of 2013 to top 1 million.

Last month, groundbreaking for single-family homes, the largest segment of the market, fell 2.2 percent to a 591,000-unit pace, the lowest level since November last year.

Starts for multi-family homes jumped 26 percent to a 305,000-unit rate, reversing the prior month’s decline.

Permits for multi-family homes rose 12.6 percent to a 330,000-unit rate. Permits for single-family homes fell 1.9 percent to a 613,000-unit pace.

A separate report from the Labor Department showed nonfarm productivity increased at an annual rate of 0.9 percent in the second quarter.

Productivity dropped at a rate of 1.7 percent in the first quarter. Unit labor costs – a gauge of labor-related costs for any given unit of output – rose at a rate of 1.4 percent in the second quarter after dropping in the first quarter at a rate of 4.2 percent.

(Reporting by Lucia Mutikani, additional reporting by Richard Leong in New York; Editing by Paul Simao)

Article source: http://www.nytimes.com/reuters/2013/08/16/business/16reuters-usa-economy.html?partner=rss&emc=rss

With Energy Costs Lower, Producer Prices Were Flat in July, Evidence of Little Inflation

The Labor Department reported on Wednesday that a drop in natural gas and gasoline costs left its seasonally adjusted producer price index unchanged for the month. Analysts polled by Reuters had expected a 0.3 percent increase.

But the very slight increase in the producer price index outside of the volatile energy and food sector components is likely to attract attention at the Federal Reserve, which has recently noted the risks to the economy from inflation that is too low.

The so-called core producer prices, which are seen as indicators of trends in inflation, rose just 0.1 percent during the month, below the 0.2 percent gain expected by analysts.

Inflation has been trending lower for much of the last year despite signs of growing strength in the economy and the Fed warned last month that low inflation could hurt the economy.

The data on Wednesday showed that the core index was up 1.2 percent in the 12 months through July, the lowest reading since November 2010. Analysts had expected a 1.4 percent annualized increase, down from 1.7 percent in June.

The Fed is concerned about low inflation because it can encourage businesses and consumers to put off purchases in anticipation of lower prices. This undermines the Fed’s efforts to increase consumption by lowering borrowing costs.

Policy makers are also concerned about extremely low inflation because it raises the risk that a major shock to the economy could send prices and wages into a downward spiral known as deflation. Ben S. Bernanke, the Fed chairman, pointed out this risk in July.

But Mr. Bernanke has argued that temporary factors could be behind some of the low inflation and many private sector economists agree.

A steady decline in the unemployment rate appears to have the Fed nearly ready to begin winding down its economic stimulus program, which has kept interest rates historically low. The Fed has been buying $85 billion in Treasury and mortgage-backed securities each month.

A number of economists expect the Fed to begin reducing its monthly bond purchases in September. This has led to an increase in interest rates for home mortgages.

Article source: http://www.nytimes.com/2013/08/15/business/economy/with-energy-costs-lower-producer-prices-were-flat-in-july-evidence-of-little-inflation.html?partner=rss&emc=rss

Guardian Reaps Benefits From N.S.A. Scoop

“I’ve got a little story to chat to you about,” she told the editor, Alan Rusbridger.

Last week’s revelations about the extent of N.S.A. surveillance both in the United States and abroad is a major coup for the British news organization, which established a beachhead here less than two years ago. Mr. Rusbridger, who flew to New York from London last Wednesday in anticipation of the scoop, credits the story to the fact that The Guardian continues to invest in journalism when many news organization have cut back.

“We’re internationally engaged,” Mr. Rusbridger said Monday as he sat with Ms. Gibson in The Guardian’s conference room in Manhattan after a nonstop weekend. Outside the conference room, television screens featured reports from a range of networks, all focused on The Guardian’s story.

The scoop may also owe a partial debt to The Guardian’s longstanding liberal and anti-establishment approach to journalism. The newspaper has in recent years aggressively covered, among other stories, the News Corporation hacking scandal, the accusations of sexual abuse against the BBC personality Jimmy Savile, and the WikiLeaks release of diplomatic cables.

In 2012, the paper hired Glenn Greenwald, a high-profile writer, activist and lawyer who Ms. Gibson said “embodies something that is really quite Guardian.” Mr. Greenwald has been a longtime critic the Patriot Act and other national security steps that the government has taken since 9/11.

For the N.S.A. story, the paper allowed him to cross over to the news pages and to cooperate with a source who leaked the N.S.A. documents. Mr. Greenwald said that his source, who on Sunday identified himself as Edward J. Snowden, “knew the views that I had” and “knew that in order for someone to do this story the way it had to be done” he had to be “in an adversarial posture vis-à-vis the U.S. government.”

Barton Gellman, an investigative reporter who had a long career at The Washington Post, said Mr. Snowden also discussed the documents with him. But he balked when Mr. Gellman and The Post would not agree to Mr. Snowden’s timetable for releasing the documents or his request that the paper print all the slides in a PowerPoint presentation about Prism, the government’s extensive online surveillance system.

Laura Poitras, a documentary filmmaker who shared a byline with Mr. Greenwald in The Guardian and Mr. Gellman in The Post in the coverage of the N.S.A. leaks, said in an interview with Salon that Mr. Snowden “had a suspicion of mainstream media.”

David Corn, the Washington bureau chief at Mother Jones magazine — who is probably best known for releasing the Mitt Romney “47 percent” video — said that leakers once sought out established news organizations like television networks and national newspapers but that “that oligopoly no longer exists.”

“If the leak is big enough, it doesn’t matter what platform you choose,” he said. “If it has merit and wow factor, you will get your story out.”

The N.S.A. story also came with benefits: The Guardian Web site recorded its highest day of traffic on Monday, a spokeswoman said.

The Guardian’s parent, Guardian Media Group, loses money, according to its most recent financial statements. According to the Audit Bureau of Circulation, the paper’s circulation in Britain is less than half what it was a decade ago — 192,376 compared with 396,508. While Mr. Rusbridger said he expected the company’s financial situation to improve, The Guardian is exploring new ways to make money, including inviting loyal readers to help financially.

“We are deeply interested in monetizing them,” Mr. Rusbridger said. Many have offered financial support, especially after the Snowden scoop.

Charlie Beckett, director of Polis, a media research group affiliated with the London School of Economics, said plans for growth internationally could help offset losses back home.

“The Guardian is desperately trying to become globally recognized. They do it because they care,” Mr. Beckett said. “But it’s also part of their global business strategy.”

The company has 57 employees in the United States in New York, Washington and Chicago. Its editors do not deny that their journalism walks much closer to the line of advocacy than most American newspapers. Mr. Beckett described The Guardian as serving a role in Britain similar to the one that MSNBC does in the United States.

“Because of the BBC and public service broadcasting, we always have a huge volume of objective and balanced journalism. The newspaper press have always had a tradition of being partisan from the beginning of the 20th century,” Mr. Beckett said.

Ms. Gibson said part of The Guardian’s approach to journalism came from its limited resources. Because it cannot afford to hire beat reporters to cover all topics, its reporters must be driven to write about their passions, like phone hacking or national security, she said.

“They’re not really going to pursue it unless they really, really care about it,” Ms. Gibson said.

Ms. Gibson described the growth of the Web site in the United States as steady and that it would integrate all types of experts into its coverage who it may reach through blogs, commenters and types of social media.

Mr. Rusbridger said, “You are just giving a better account of the world.”

Article source: http://www.nytimes.com/2013/06/11/business/guardian-reaps-benefits-from-nsa-scoop.html?partner=rss&emc=rss

Economix: Wall Street’s Ideal Jobs Gain: Middling

For most Americans, the hopes for Friday’s employment report are simple: the more jobs the economy created last month, the better.

On Wall Street, the anticipation is decidedly more complicated, and there is the possibility that the economy could have created too many jobs.

How could a lot of new jobs be a bad thing? As is frequently the case in the markets these days, the answer goes back to the Federal Reserve. Many investors assume that if Friday’s employment report shows an unexpected spike in new jobs, the Federal Reserve will feel more pressure to step back from its stimulus programs – or, as traders put it, to taper quantitative easing.

Investors have been worried since mid-May that the Fed may be preparing to step back from its bond-buying programs sooner than many had anticipated. That is based on the statement by the Fed chairman, Ben S. Bernanke, that the central bank could look at slowing down its bond purchases “in the next few meetings.”

But Fed officials have said they will make changes only if the economy is showing improvement. Given the market’s dependence on Fed stimulus, many on Wall Street have been left hoping that the economy does not show too many signs of improvement.

“It’s perverse,” said Ed Yardeni, the president of Yardeni Research. He said that if Friday’s jobs report showed a net gain of more than 200,000 jobs in May, it could end up hurting stock markets, at least in the short term.

Mr. Yardeni said that a very low number – anything under 100,000 — would also likely be a bad thing for markets, as it would indicate that the Fed’s stimulus was not working, leaving few options for fostering economic growth.

The right number, à la Goldilocks, is probably somewhere right in between. Analysts are expecting a number around 165,000. If it is close to that, investors are likely to conclude that economic growth is happening, but not at a rate that would lead the Fed to slow down its stimulus.

“The market will conclude it’s just more of the same,” Mr. Yardeni said.

Article source: http://economix.blogs.nytimes.com/2013/06/07/wall-streets-ideal-jobs-gain-middling/?partner=rss&emc=rss

Italy’s Borrowing Costs Plummet, Easing Pressure

The sale of 9 billion euros ($11.8 billion) of six-month Treasury bills was seen as the first postholiday indication of the condition of the beleaguered euro zone, the 17 members of the European Union that use the euro.

The bills were sold at a yield of 3.251 percent, down from 6.504 percent at a previous auction in late November. Demand was 1.7 times the amount offered, compared with 1.47 times previously.

In an auction of two-year bonds, which raised 1.7 billion euros, the yield fell to 4.853 percent from 7.814 percent last month. The auctions raised a total 10.7 billion euros.

The lower borrowing costs appeared to reflect the adoption of a new austerity package in Italy, as well as a huge infusion of low-cost, long-term liquidity into euro zone banks by the European Central Bank last week.

With the central bank now charging only 1 percent interest on three-year loans, banks can take the cash, buy short-term securities and earn a quick profit.

In anticipation of the loans, Spain’s borrowing costs fell drastically at an auction on Dec. 20. And the central bank will offer the three-year loans again in late February.

On Thursday, Italy plans a sale of 8.5 billion euros ($11 billion) in long-term debt, which analysts said would be a more significant indicator of market sentiment.

The brighter outlook for Italy was reflected elsewhere in the debt markets, where Spain’s long-term borrowing costs fell to almost 5 percent. German bonds, a benchmark for the euro zone, edged lower to 1.89 percent.

“The target size of the auction was in line with the intended amount,” analysts at IFR Markets wrote in a note after the Italian debt sale, “so over all a smooth auction.”

The sale of long-term debt on Thursday probably will “go the same way,” they added, “as domestic players come in to support” the bonds.

Nevertheless, there was evidence that the financial system remained stressed. The central bank reported that banks in the euro zone had deposited a record amount of overnight funds for the second day in a row. Banks parked 452.03 billion euros ($584 billion) for 24 hours, beating a previous record of 411.8 billion euros set on Tuesday.

The heavy use of the deposit facility indicates that banks in the euro zone remain wary of lending to one another, although analysts note that market activity has been muted because of the year-end holidays, and there is more cash in the system after the central bank’s action.

Italy has been in the spotlight as a result of slow growth combined with escalating borrowing costs and a debt equal to 120 percent of gross domestic product. It needs to raise 450 billion euros ($582 million) in 2012.

Italy suffered its biggest decline in Christmas retail sales in 10 years, according to data released this week by the consumer group Codacons.

Article source: http://www.nytimes.com/2011/12/29/business/global/italys-borrowing-costs-drop-sharply-at-auction.html?partner=rss&emc=rss