April 20, 2024

Spill in China Lays Bare Environmental Concerns

Then officials in this city got confirmation that a chemical spill had taken place at a fertilizer factory upstream. They shut off the tap water, which sent residents into a scramble for bottled water. In the countryside, officials also told farmers not to graze their livestock near the river.

The spill, which occurred on Dec. 31, affected at least 28 villages and a handful of cities of more than one million people, including Handan. Officials here were irate that their counterparts in Changzhi, where the polluting factory was located, had delayed reporting the spill for five days. For the past two months, Changzhi officials and executives at the company running the factory, Tianji Coal Chemical Industry Group, have generally stayed silent, exacerbating anxiety over water quality.

The conflict over the Changzhi spill has drawn attention to the growing problems with water use and pollution in northern China. The region, which has suffered from a drought for decades, is grappling with how industrial companies should operate along rivers. Local officials are shielding polluting companies and covering up environmental degradation, say environmentalists.

“Problems with water weren’t so serious before, but they have become much worse with industrial consumption,” said Yin Qingli, a lawyer in Handan who filed a lawsuit in January against Tianji, which uses water to convert coal to fertilizer at the factory in Changzhi.

Environmental degradation has led many Chinese to question the Communist Party’s management of the country’s economic growth. Addressing the problem is one the greatest challenges for the administration of Xi Jinping, the new chief of the Communist Party. Environmental issues will most likely be on the agenda at the annual meeting of the National People’s Congress, scheduled to begin on Tuesday.

The results of an official investigation into the Tianji spill were announced on Feb. 20 by Xinhua, the state news agency, which reported that a faulty hose had resulted in the leakage of about 39 tons of aniline, a potential carcinogen, from the fertilizer factory. Thirty tons were contained by a reservoir, but nearly nine tons leaked into the Zhuozhang River, which feeds into the Zhang River that runs to Hebei Province, where Handan is, and Henan Province. The Xinhua report said 39 people had been punished, including Zhang Bao, the mayor of Changzhi, who was removed from his post. But the party chief, Tian Xirong, the city’s top authority, was recently promoted to deputy director of the provincial Parliament.

Some critics say officials may be slow to divulge information because the acting governor of Shanxi Province, where Changzhi is, is Li Xiaopeng, the “princeling” son of Li Peng, a powerful Communist Party elder. At a news conference in January after news of the spill had emerged, the younger Mr. Li urged officials to make safety a top priority.

Handan officials first got a tip about a potential spill on Jan. 4 from a water management agency upstream. But when they tried contacting Changzhi officials, there was no response. “After more than 30 calls, we still weren’t able to reach them,” a Handan environmental official told Xinhua. Only the next day did Changzhi officials agree to meet with Handan officials.

At least two managers of Tianji have been fired, but the company, which is the foundation of Changzhi’s economy, appears to have suffered no other significant consequences. It is one of many companies in China’s booming coal-to-chemicals industry, in which a water-intensive gasification process is used to convert coal to chemicals that are critical for a wide range of products. The process results in large amounts of wastewater that is supposed to be treated and then contained.

After sending a team to Handan in January, Greenpeace East Asia issued a report on the spill. It said that there were about 100 coal-to-chemical factories on the upper reaches of the Zhuozhang River. “There is a history of clashes between heavily water-consuming coal-to-chemical factories and citizens downstream who are trying to compete for water to drink,” the report said. Larger factories like those of Tianji use 2,000 to 3,000 tons of water per hour, equivalent to the amount of water that more than 300,000 people use in a year.

The factory in Changzhi dumps more than six million tons of wastewater per year, about 30 percent of the water taken from the river, according to Greenpeace. The wastewater is supposed to drain into a receptacle.

Amy Qin and Patrick Zuo contributed research from Handan and Beijing.

Article source: http://www.nytimes.com/2013/03/03/world/asia/spill-in-china-lays-bare-environmental-concerns.html?partner=rss&emc=rss

Chinese Manufacturing Data Suggest Muted Recovery

HONG KONG — A survey of manufacturing activity in China on Thursday provided more reassurance that the Chinese economy, buoyed by somewhat improved global trade and a string of government stimulus measures last year, has settled into a muted recovery.

The reading of the purchasing managers’ index, published by the British bank HSBC, rose to 51.9 in January from 51.5 in December. It was the fifth consecutive improvement in the monthly index, and took the number to its highest level in two years.

The early version of the HSBC index, which is based on about 90 percent of the survey results, provides one of the earliest insights into the world’s second-largest economy each month, and is thus closely watched by analysts and investors.

“The upbeat manufacturing PMI reading heralds a good start to China’s economic growth into the New Year,” commented Qu Hongbin, chief China economist for HSBC, in a note accompanying the data release. While export growth was likely to remain tepid, he added, infrastructure construction was regaining momentum, and companies had started to step up hiring and manufacturing again.

The reading underlined a picture that has been crystallizing since last year: That the years of double-digit growth are a thing of the past, and that China’s economy has, for now, settled into a more modest pace of expansion.

Data released last week showed that the Chinese economy expanded just 7.8 percent last year — from 9.3 percent in 2011 and 10.4 percent in 2010.

The last few months have shown an improvement as government-mandated measures aimed at propping up growth filtered through to the economy.

But that recovery has been modest. The January HSBC index released Thursday, for example, was just 4.3 points higher than its last trough in August, Mr. Qu noted. By comparison, the rebound of 2009 saw the index jump more than 9 points in just five months.

End

Article source: http://www.nytimes.com/2013/01/25/business/global/chinese-manufacturing-data-suggest-muted-recovery.html?partner=rss&emc=rss

Consumer Confidence and Spending Rise, Reports Show

WASHINGTON (AP) — A flurry of reports on Thursday showed that American consumers were growing more confident and spending more, strengthening a still-weak economy just five days before the presidential election.

Consumer confidence surged in October to its highest level in nearly five years. Americans were encouraged by recent declines in the unemployment rate. And they responded by spending more on cars and trucks, at retail businesses and on goods produced in the nation’s factories.

Still, businesses remain nervous about where the economy is headed and that could affect hiring. The October jobs report, to be released Friday, is expected to show another month of tepid job growth. Hurricane Sandy could also slow economic growth slightly in the final months of 2012.

On Thursday the stock market welcomed the signs of improved economic health. The Dow Jones industrial average closed up 136.16 points, or 1.04 percent, at 13232.62, and broader indexes also increased.

“U.S. economic data are at least all moving in the right direction,” Robert Kavcic, an economist at BMO Capital Markets, said in a note to clients.

Reports released Thursday showed:

¶ The Conference Board’s consumer confidence index rose to 72.2 last month, its highest reading since February 2008. While the index is still below the 90 reading consistent with a healthy economy, it has risen from 40.9 a year ago. That is the biggest one-year increase since 1994, Mr. Kavcic said.

¶ Sales in retail stores open at least one year rose 5 percent in October, according to a tally from 21 retail chains by the International Council of Shopping Centers. That exceeded analysts’ predictions. Some of the increase may reflect higher spending for generators, batteries, water and other supplies in preparation for Hurricane Sandy.

¶ Manufacturing expanded for the second straight month, largely because of higher consumer demand. The Institute for Supply Management, a private trade group, said its index of factory activity edged up to 51.7 in October, from 51.5 in September. A reading higher than 50 indicates expansion. Factory activity is growing again after contracting from June through August. The October reading was still slightly below the average for the last year of 52.2.

¶ Weekly unemployment applications fell 9,000 to 363,000 last week, according to the Department of Labor. That suggests hiring is unlikely to pick up much from its current pace of about 150,000 new jobs a month.

¶ A report by the payroll provider ADP showed that businesses added 158,000 jobs in the last month, up from 114,000 in the previous month. ADP updated its method for the October report. It has frequently diverged sharply from the government’s figures.

¶ Auto sales also rose in October, even though the storm caused dealers on the East Coast to lose three days of business. Toyota sales rose almost 16 percent, Chrysler’s 10 percent and General Motors was up 5 percent. Ford sales increased only slightly, 0.4 percent.

¶ Construction spending rose 0.6 percent in September, the Commerce Department said. A healthy gain in spending on home construction and renovation outpaced declines in commercial and government building.

¶ Manufacturing in China also improved in October, although the two surveys released Thursday show factory activity in the region was still struggling to grow. The reports are rare good news for the world economy, which has weakened because of Europe’s debt crisis and slower growth in emerging markets such as China, India and Brazil.

The United States economy expanded at a 2 percent annual pace in the July-September quarter, up from 1.3 percent in the second quarter.

Many economists predict slightly slower growth in the fourth quarter, partly because of disruptions from the storm. Still, the economy is not growing fast enough to bring relief to the roughly 12 million jobless Americans soon. With the unemployment rate still high, steady growth of more than 3 percent is generally needed to create enough jobs.

Article source: http://www.nytimes.com/2012/11/02/business/economy/claims-for-us-jobless-benefits-drop.html?partner=rss&emc=rss

Stocks & Bonds: Shares Hesitate After Growth Disappoints

The stock market closed mixed Friday, after the government reported that economic growth was slower at the end of last year than economists expected.

The Dow Jones industrial average had its first losing week of 2012, and spent all of Friday in the red. It ended down 74.17 points, or 0.58 percent, at 12,660.46. The loss snapped a three-week winning streak for the Dow, which fell 60 points for the week, but is still up 3.63 percent for the year.

The Standard Poor’s 500-stock index declined 2.10 points, or 0.16 percent, to 1,316.33 and finished the week up just slightly — 0.95 point. It is up 4.67 percent for the year.

The Nasdaq composite index rose 11.27 points, or 0.4 percent, to 2,816.55. It rose 29.85 points this week and is up 8.11 percent for the year.

The Treasury’s 10-year note rose 14/32, to 100 31/32. The yield fell to 1.89 percent, from 1.94 percent late Thursday.

Economic growth for October through December came in at an annual rate of 2.8 percent. That was the fastest of 2011, but lower than the 3 percent that economists were expecting.

Utility companies led the way down with a fall of 1.3 percent. Most of the other nine industries in the S. P. also declined, but only slightly, continuing a curious trading pattern this year: Trading has been calm in the last four weeks, a big change from the violent moves up and down during much of 2011.

Friday was the 17th day in a row of moves of less than 100 points up or down for the Dow. The last time the index had a longer period of such small moves was a 34-day stretch that started Dec. 3, 2010.

Despite the drift lower, investors displayed some bullishness.

The Russell 2000 index of smaller stocks rose 1.8 percent for the week. Investors tend to sell stocks in the Russell when they are worried, because smaller companies often do not have much cash and other resources when times get tough.

“Risk-taking is picking up,” says Jeffrey A. Schwarte, a portfolio manager at Principal Global Equities. He says his firm has been buying small companies since late last year. “We’re still finding attractive stocks.”

Earlier in the week investors had plenty of reason to hope the indexes would keep moving higher. On Wednesday, the Federal Reserve announced it would most likely keep benchmark interest rates near zero through late 2014, more than a year longer than it previously indicated. That helped send the Dow to its highest close since May.

Also lifting spirits: Apple had its best quarter for profits, trouncing expectations.

On Thursday, the Dow kept rising, briefly passing its highest close since the financial crisis three years ago. But the rally faded after news that new-home sales in December had dropped.

Chevron fell 2.47 percent, or $2.63, to $103.96, the most of the 30 stocks in the Dow average, after its quarterly profit and revenue came in well below what analysts were expecting. Oil and natural gas production declined.

Ford fell 4.16 percent, or 53 cents, to $12.21, after reporting disappointing earnings because of weak sales in Europe. The company said its results were also hurt by problems at parts suppliers in Thailand because of flooding there.

Procter Gamble, which makes Tide, Crest and other consumer products, fell 0.77 percent, or 50 cents, to $64.30, after cutting its earnings outlook.

The investment management company Legg Mason lost 4.76 percent, to $26.02, after its earnings fell by half because clients withdrew money. Legg Mason posted earnings of 20 cents a share. Analysts had expected 25 cents, according to FactSet.

Article source: http://feeds.nytimes.com/click.phdo?i=3083d1d915497ffc1e60e10595af5bbc

Europe Wins Modest Respite From Debt Crisis

LISBON — Europe won some further modest respite from its debt crisis Wednesday as Germany and Portugal became the latest countries to borrow with relative ease ahead of a hazard-filled few weeks for the 17-nation euro zone.

Both countries saw their borrowing costs dip at the auctions, in a further sign that investors may have temporarily put some of their concerns over Europe’s debt crisis to one side at the start of the new year. Italy and the Netherlands have also managed to sell their debt over the past week or so in a fairly trouble-free manner.

Germany, the biggest contributor in Europe’s bailouts, managed to sell €4.06 billion, or $5.3 billion, in its benchmark ten-year bonds at an average yield of 1.93 percent, down on the previous 1.98 percent it had to pay. But demand barely covered the bonds on offer.

And Portugal, which was bailed out last April after being locked out of international markets, paid a markedly lower interest rate to borrow €1 billion in three-month treasury bills.

The German and Portuguese auctions come ahead of severe tests for euro zone leaders as they try to navigate their way out of their crisis over too much debt in some countries.

Euro zone governments are struggling to convince financial markets that indebted governments will not default and should be able to borrow at affordable rates to repay debts as they come due. Greece, Ireland and Portugal have needed bailouts, while much larger Italy and Spain have also seen their borrowing costs rise ominously.

Italy, the recent focus of the crisis, must borrow to cover €53 billion in expiring debt in the first quarter alone in a series of debt auctions beginning Jan. 13. The auctions will test of whether the government of new Prime Minister Mario Monti is making progress in regaining market confidence through budget cuts and efforts to improve weak economic growth.

Greece must also win final approval of a second, €130 billion bailout, without which it can’t pay its debts. As part of that the government must strike a deal with creditors for a 50 percent reduction in their holdings of Greek debt to try to put the country back on its feet. Many in the markets think a bigger writedown will be needed.

At the Portuguese auction, the rate fell to an eight-month low of 4.346 percent and was sharply down from the 4.873 percent rate it had to pay in a similar auction last month. Though Portugal cannot tap long-term bond markets at a reasonable price, it has sought to maintain a market presence by issuing shorter-term debt.

Analysts said the improvement may represent a sign that Portugal is regaining the markets’ confidence as it carries out spending cuts and revenue increases in return for its €78 billion bailout.

“There’s been an improvement in the risk perception of Portuguese debt, which has driven rates down” said Filipe Silva, debt manager at Portuguese financial group Banco Carregosa. “Now we just need to see whether it holds.”

Germany’s auction was better than one in November which raised fears that Europe’s debt crisis was spiraling out of control when the government sold only 65 percent of debt on offer.

Still, there was some concern voiced over the amount of German bunds investors actually wanted Wednesday.

Bids for €5.14 billion worth of bonds exceeded the full amount on offer of €5 billion, but only barely, counting the €943 million the government kept back for secondary market operations.

“Yes, it was covered, so that’s a relief,” said Marc Ostwald, a markets strategist at Monument Securities. “On the other hand, the coverage was poor.”

Mr. Ostwald said the low interest rate offered little attraction to typical buyers such as annuity and insurance companies, as it was too small to cover their obligations. Meanwhile, investors seeking only a safe haven were more likely to want much shorter-term issues.

“Clearly, it wasn’t the best cover, but you wouldn’t expect it to be,” he said.

Germany can borrow cheaply and for longer because its finances are among the strongest in the euro zone but concerns about the costs of bailing out other countries have raised questions about its finances too.

On Tuesday, the Netherlands saw its borrowing rates fell to near zero percent in a pair of short-term auctions, in a sign that investors are searching out what they consider to be Europe’s safer assets at a time of concern over the level of debts in a number of countries.

Italy, the euro zone’s third-largest economy, also sold large chunks of debt last week.

Analysts say the run of smooth auctions may be largely due to a massive €489 billion infusion of cheap, 3-year credit to euro zone banks by the European Central Bank.

Some of that cheap money may be being used by some banks to buy higher-yielding short-term debt, though Italy’s longer-term borrowing rate in the markets remain at dangerously elevated levels near 7 percent.

Article source: http://www.nytimes.com/2012/01/05/business/global/europe-wins-modest-respite-from-debt-crisis.html?partner=rss&emc=rss

U.S. Trade Deficit Narrows, as Imports Fall

 

The United States trade deficit narrowed in October to its lowest point of the year as Americans bought fewer foreign cars and imported less oil. Exports of American-made autos also fell.

The Commerce Department said Friday that the trade deficit shrank 1.6 percent, to $43.5 billion. That’s down from September’s revised figure of $44.2 billion.

American exports slipped 0.8 percent, to $179.2 billion, the first drop after three months of gains. Shipments of industrial supplies, like natural gas, copper and chemicals, fell. Exports of autos and agricultural goods also dropped.

Imports fell 1 percent to $222.6 billion, reflecting a 5 percent decline in oil imports. The average price of imported oil fell for the fifth consecutive month to $98.84, the lowest since March.

A lower deficit can boost economic growth because it typically means foreign nations are buying more American goods. That can lead to more jobs and higher consumer spending, which fuels 70 percent of economic activity.

The deficit shrank every month in the July-September quarter, as exports grew. That contributed almost a half-point to the economy’s 2 percent annual growth rate in the quarter.

Rising consumer demand in the United States could push imports higher, particularly as the holiday shopping season gets under way. Retailers reported that shoppers got off to a robust start over the Thanksgiving holiday weekend. And consumer confidence rose sharply last month, though it is still below levels that are consistent with a healthy economy.

There are also signs hiring is picking up. The number of people seeking unemployment benefits last week fell to its lowest level in nine months. That suggests companies are more confident about the economy’s growth and are laying off fewer workers.

In October, Congress approved free-trade agreements with South Korea, Colombia and Panama, after four years without any new trade deals. The Obama administration says the three deals will boost United States exports by $13 billion a year.

The politically sensitive trade deficit with China narrowed in September after setting an all-time high in August. So far, it is on track to set a record as the highest imbalance the United States has ever recorded with a single country.

 

Article source: http://feeds.nytimes.com/click.phdo?i=bf416c8458956040146bb534fbdcd29d

U.S. Unemployment Claims Dip to 9-Month Low

 

New claims for unemployment benefits dropped to a nine-month low in the United States last week, a government report showed on Thursday, suggesting the labor market recovery was gaining momentum.

Initial claims for state unemployment benefits fell 23,000 to a seasonally adjusted 381,000, the Labor Department said, the lowest since late February. The previous week’s data was revised up to 404,000, from the previously reported 402,000.

Economists polled by Reuters had forecast that claims would slip to 395,000 last week.

The report, coming on the heels of data last week showing a rise in hiring and a sharp drop in the unemployment rate to 8.6 percent in November, pointed to some healing in a sector that has been the Achilles’ heel of the economy’s recovery.

The drop in claims last week more than unwound the prior two weeks’ increase, and pulled them back below the 400,000 level usually associated with improving labor market conditions.

Claims were the latest data to suggest an acceleration in economic growth in the current quarter after output expanded at a 2 percent annual rate in the July-September period.

The four-week moving average of claims, considered a better measure of labor market trends, fell 3,000 to 393,250, the lowest since early April.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 174,000 to 3.58 million in the week ended Nov. 26, the lowest since mid-September 2008.

Economists had forecast that so-called continuing claims would fall to 3.70 million from a previously reported 3.74 million.

The number of Americans on emergency unemployment benefits declined 178,610 to 2.79 million in the week ended Nov. 19, the latest week for which data is available.

A total of 6.57 million people were claiming unemployment benefits during that period under all programs, down 431,397 from the prior week.

 

Article source: http://feeds.nytimes.com/click.phdo?i=f465e630bd03058e4820cecd7afcb6c7

China, in Surprising Shift, Takes Steps to Spur Bank Lending

The central bank said that commercial banks would be allowed to keep a slightly lower percentage of their deposits as reserves at the central bank. The change, which will take effect on Monday, means that commercial banks will have more money to lend, which could help to rekindle economic growth and a slumping real estate market.

Real estate developers, small businesses and other borrowers have been complaining strenuously in recent weeks of weakening sales and scarce credit. Prices have dropped as much as up to 28 percent for new apartments in some Chinese cities this autumn, real estate brokers have been laying off thousands of agents as transactions have dried up, and export orders have slumped.

The Chinese move was a particular surprise because the central bank usually announces moves on Friday evenings, to allow banks and markets plenty of time to digest the news.

The Shanghai stock market slumped 3.3 percent on Wednesday before the announcement was made, its worst one-day loss in four months, on worries that the government might not act. Central bank officials in the United States said the change was not made in coordination with the action taken by the Federal Reserve and central banks in Canada, Britain, Europe and Japan to lower the cost of borrowing dollars for foreign banks.

The central bank increased the so-called reserve requirement ratio six times this year, and raised interest rates three times. The monetary policy moves earlier this year had been aimed at curbing inflation, which persists but appears to have been replaced by weakening economic growth as the top worry for policy makers.

Monetary policy changes in China are made not by the country’s central bank but by the State Council, the country’s cabinet. Shifts in the broad direction of policy are usually made only with the approval of the Standing Committee of the Politburo of the Chinese Communist Party — the nine men who really run China.

Analysts said that the central bank’s decision to announce a change in reserve requirements instead of quietly nudging state-controlled banks to make more loans showed that an important political decision had been made.

“The public nature of this move — a move that would have gone through the State Council — is a clear signal that Beijing has decided that the balance of risks now lies with growth, rather than inflation,” wrote Stephen Green, a China economist at Standard Chartered Bank, in a research note. “This is a big move, it signals China is now in loosening mode.”

The People’s Bank of China, the country’s central bank, cut the reserve requirement ratio by half a percentage point beginning Monday, to 21 percent for large banks and to 19 percent for smaller banks.

The Chinese move was such a surprise that one of the 15 members of the central bank’s monetary policy committee, Xia Bin, had just said at a seminar in Beijing Wednesday morning that China would only “fine tune” its monetary policy and would maintain an overall stance that he characterized as “prudent.”

Those remarks set off a slump in share prices during Wednesday’s trading in Shanghai; the stock market there had been closed for several hours by the time the central bank announced its policy reversal.

The People’s Bank of China is considerably more secretive than central banks in the West and particularly wary of foreign governments because of years of international pressure to allow faster appreciation of the renminbi, China’s currency.

The Chinese central bank provided no explanation for its move on Wednesday evening. The one-sentence statement only said: “The People’s Bank of China decided to cut financial institutions’ renminbi deposit reserve ratio by 0.5 percentage points.”

Easing domestic monetary policy makes it harder for China to maintain its policy of strictly limiting the appreciation of the renminbi against the dollar. The Chinese central bank has been taking most of the money that commercial banks deposit with it as reserves and then using it to buy dollars in international markets, so as to slow the renminbi’s appreciation.

But economists have seen signs in the past month that international investors are losing their appetite for speculative investments in China’s currency and have been buying fewer renminbi. That in turn has reduced the pressure from markets for the renminbi to appreciate and has meant that the central bank no longer needs to maintain its reserve requirements at record-high levels to raise the cash for its huge currency market intervention program.

Among the most widely watched economic indicators in China are the various monthly indexes of orders, backlogs and other details, gathered through surveys of companies’ purchasing managers. HSBC’s preliminary survey for November, released last week, showed an overall index of 48 points. A reading below 50 suggests a slowing economy, and 48 was the lowest reading since March 2009, when the world economy was struggling to recover from the Lehman Brothers bankruptcy and ensuing financial shocks.

The monthly release of the government’s survey is scheduled for Thursday morning in Beijing. It is widely expected to show a dip below 50 for the first time in more than two years.

The central bank’s move on reserve requirements comes as inflation in consumer prices has started to slow, from a peak of 6.5 percent in May down to 5.5 percent in October, according to official data. But private economists say that the true rate of consumer inflation is up to twice as fast, as the official data has a series of methodological shortcomings. China’s National Bureau of Statistics has acknowledged some of these shortcomings, although not the extent of their effect on inflation measurements, and is working on solutions.

Inflation in any case remains well above the government’s target of 4 percent. HSBC predicted in a research note on Wednesday evening that the government would not start reducing regulated interest rates for loans of various maturities until the official inflation rate fell below 3 percent.

Correction: November 30, 2011

An earlier version of this article incorrectly referred to the timing of the Chinese central bank statement, which was issued Wednesday evening, not Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=1d9e622f4e4f6d8f979cfc40bdc759b0

New-Home Sales Decline To a 6-Month Low Rate

A stagnant job market and a big overhang of unsold existing homes have combined to keep new-home sales low even as mortgage rates returned to lows not seen since at least the early 1970s.

New-home sales slipped 2.3 percent last month to a 295,000 annual rate, a six-month low, the Commerce Department said on Monday. That was in line with analysts’ forecasts and did little to allay fears that the United States could slip back into recession.

The median sales price also moved lower from the previous month and was 7.7 percent below year-ago levels.

“There’s no sign yet that low mortgage rates are helping the housing sector,” said Gary Thayer, a strategist at Wells Fargo Advisors in St. Louis.

The Federal Reserve last week announced new measures to ease credit further for home buyers, but analysts cautioned that the level of mortgage rates was not the main hurdle to buying.

Heavy debts taken on during the housing boom in the previous decade are also making consumers cautious to spend.

In its monthly report on single-family home sales, the government raised its estimate for July’s sales pace slightly to 302,000 units. Also, the supply of homes available on the market in August dropped to a record low.

Data last week showed new construction of homes fell in August, dragging on economic growth.

“The housing sector can’t get any worse,” said Michael Englund, an economist at Action Economics in Boulder, Colo.

Article source: http://feeds.nytimes.com/click.phdo?i=99940ef2acff4659c3bc52ab62742f0a

U.S. Exports Rise to Record as Trade Deficit Shrinks

WASHINGTON — American manufacturers sold more cars, airplanes and industrial machinery in foreign markets in July, sending exports to a record high and pushing the trade deficit down to its lowest level in three months, the Commerce Department reported Thursday.

The trade deficit narrowed to $44.8 billion in July, down 13.1 percent from June, an improvement that reflected a 3.6 percent rise in exports to the record level of $178 billion. Imports dipped 0.2 percent to $126.9 billion as the bill for imported oil dropped 6 percent to $35.5 billion as crude oil prices fell.

The big jump in exports should provide critically needed support for growth at a time when the United States economy has been in danger of toppling into a recession.

Also Thursday, the Labor Department said the number of people seeking state unemployment benefits in the United States ticked up slightly last week, rising 2,000 to a seasonally adjusted 414,000.

The report suggested that companies were not significantly increasing layoffs, despite weak economic growth. But it also signals that little hiring was taking place. Applications need to fall below 375,000 to indicate sustainable job growth, economists say. They have not been below that level since February.

The four-week average, a less volatile measure, increased for the third straight week to 414,750, the government said.

Overall, the American economy grew at a meager 0.7 percent in the first six months of this year, the slowest growth since the recession ended two years ago. Economists are hoping for a modest rebound in growth in the second half of the year, some of it coming from stronger export sales, like those in July.

A narrowing trade deficit adds to economic growth because it means more products are being produced in the United States and less money is flowing into the hands of foreign producers to buy imports.

The United States trade deficit through July was running at an annual rate of $565.3 billion, 13.1 percent higher than last year’s imbalance of $500 billion.

For July, the American trade deficit with China rose 1.1 percent to $27 billion, the largest imbalance since September 2010. Through the first seven month of this year, the deficit with China is 10 percent higher than the same period in 2010, a year when the trade gap between the two nation’s hit a record high. The Obama administration has been applying pressure to China to allow its currency to rise more quickly in value against the dollar as a way of increasing U.S. exports to China and lowering Chinese imports to this country.

The deficit with Japan jumped by 30 percent in July to $5.3 billion, reflecting a sharp rebound in imports from Japan as that country’s factories resumed more normal production following the March 11 natural disasters. The curtailment of Japanese shipments to the United States restricted U.S. production in such areas as autos where American factories are dependent on getting component parts from Japan.

Oil imports declined because the volume of shipments fell along with the price. The average price of a barrel of imported crude oil dropped to $104.27 in July, down from $106 in June. Because oil prices have declined further since then, economists are expecting oil imports to continue to fall in coming months.

Article source: http://www.nytimes.com/2011/09/09/business/economy/us-exports-rise-to-record-as-trade-deficit-shrinks.html?partner=rss&emc=rss