April 19, 2024

You are here: Home / Archives for spike

Housing Starts Fall to 10-Month Low

July 17, 2013 by Leave a Comment

The Commerce Department said on Wednesday housing starts dropped 9.9 percent to a seasonally adjusted annual rate of 836,000 units. That was the lowest level since August last year.

Economists, who had expected groundbreaking to rise to a 959,000-unit rate, shrugged off the decline and said wet weather in many parts of the country had dampened activity. They noted that much of the drop was in the volatile multifamily segment.

“It looks like it’s weather-related,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “On the surface it doesn’t look good, but we are confident that starts activity is still going to climb higher in the months to come.”

Permits to build homes fell 7.5 percent last month to a 911,000-unit pace. Economist had expected permits to rise to a 1-million unit pace.

Though it was the second straight month of declines in permits, they remained ahead of starts. Economists said this, together with upbeat homebuilder confidence, suggested groundbreaking activity will bounce back in July and through the remainder of this year.

Sentiment among single-family home builders hit a 7-1/2 year high in July, a report showed on Monday, amid optimism over current and future home sales.

MORTGAGE RATES STILL LOW

There was little to suggest that a recent spike in mortgage rates was restraining home building activity, economists said, pointing to the improving builder confidence.

“New home supply and housing completions remain low, home prices are rising and, despite the recent rise, mortgage rates remain low,” said John Ryding, chief economist at RDQ Economics in New York. “To us, this all points to housing activity adding to growth in the second half of the year.”

Housing’s recovery is being aided by still-low mortgage rates engineered by the Federal Reserve’s accommodative monetary policy and steady employment gains.

Mortgage rates increased in recent weeks after the Fed expressed its desire to start cutting back on its bond purchases later this year. The monthly $85 billion in bond purchases have been holding down interest rates.

Fed Chairman Ben Bernanke said on Wednesday the central bank still expected to start scaling back its massive asset purchase program later this year, but left open the option of changing that plan in either direction if the economic outlook shifted.

The U.S. stock market rose as Bernanke’s comments led markets to believe the central bank’s plans to pull its monetary stimulus were not set in stone. The U.S. dollar gained ground while Treasury securities prices slipped.

Bernanke offered an upbeat assessment of the housing market’s prospects.

“Housing activity and prices seem likely to continue to recover, notwithstanding the recent increases in mortgage rates, but it will be important to monitor developments in this sector carefully,” Bernanke told lawmakers.

Last month, groundbreaking for single-family homes, the largest segment of the market, slipped 0.8 percent to its lowest level since last November 2012. Starts for multi-family homes declined 26.2 percent to a 245,000-unit rate.

Starts were down in all four regions in June, with big declines in the Northeast, South and the Midwest.

Weak groundbreaking suggested a smaller boost to both second and third quarter gross domestic product from residential construction. Second-quarter GDP estimates are ranging between 0.5 percent and 1 percent.

The economy grew at a 1.8 percent annual pace in the first three months of the year.

Permits for multi-family homes fell 21.4 percent last month. But permits for single-family homes rose 0.6 percent to a their highest since May 2008.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Chizu Nomiyama)

Article source: http://www.nytimes.com/reuters/2013/07/17/business/17reuters-usa-economy.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Bits Blog: The China-U.S. Smartphone Gap Grows Larger

August 31, 2012 by Leave a Comment

Smartphones are so popular here that it’s difficult to avoid seeing one, and in China, these devices are poised to become even more widespread.

This year, China will account for 26.5 percent of all smartphone shipments, compared to 17.8 percent in the United States, according to a forecast by the International Data Corporation, a research firm.

China has surpassed the United States in smartphone sales in the past. However, only in the first quarter of this year did it become clear that the smartphone gap between China and the United States would become a “long-lasting gulf that won’t be bridged,” said Kevin Restivo, a senior research analyst with IDC.

What’s driving the spike in China? Cheaper Android smartphones priced below $200, like those made by Huawei, according to IDC. Apple’s iPhone has also been a big hit among Chinese customers — during Apple’s fiscal second quarter, sales of the iPhone there accounted for 20 percent of the company’s revenue. However, over all, Android phones are outselling the iPhone by about eight times in China, according to Mr. Restivo, which you would expect because Google’s operating system is available on a wider array of products at lower prices.

China’s overtaking of the United States in smartphones doesn’t mean sales here are grinding to a halt, says Ramon Llamas, a senior research analyst at IDC, in a statement. Smartphones already account for the majority of phone sales in the United States, so a slowdown was expected, he said.

Article source: http://bits.blogs.nytimes.com/2012/08/30/china-smartphone-sales/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Japan Moves to Weaken the Yen

August 4, 2011 by Leave a Comment

TOKYO — Japan took steps Thursday to reverse a punishing spike in the value of its currency, intervening in the foreign exchange market and preparing to pump fresh funds into the country’s financial system.

The authorities delivered a one-two punch to markets. First, the government said it had begun selling yen and buying dollars to push down the value of the Japanese currency. Then, the Bank of Japan announced that it had further expanded its program to purchase government and corporate bonds, a form of monetary easing.

Japan has been desperate to bulwark its fragile recovery from the March earthquake and tsunami. But even as companies have raced to repair damaged factories and resume production, they have been hit by a surge in the yen that threatens their business overseas.

A strong yen hurts Japan’s export-led economy by making its cars and electronics more expensive overseas, and by eroding the value of overseas earnings when converted into yen.

But the Japanese currency, long considered a safe haven, rose as investors wary of the debt impasse in the United States fled to other currencies. Against the dollar, the yen has surged about 11 percent in the last year, and 4 percent in the last month.

The rise has accelerated an upward trend in the yen that was already squeezing Japanese exporters’ profits. Toyota, Honda and Nissan all recently blamed their sharply lower earnings in the latest quarter in part on the strong yen.

The efforts by the Japanese authorities to counter that trend appeared to be having an effect Thursday. The dollar rose to above 79 yen in afternoon trading in Tokyo. Before the government’s announcement, it had been trading around 77 yen.

Still, the effect of moves to manipulate foreign exchange markets, especially by a single country, has often been short-lived. Japan acted alone in the intervention, though Tokyo is in touch with other countries over the maneuver, Yoshihiko Noda, its finance minister, told reporters. He also said he hoped that the Bank of Japan would take steps to support the government’s move.

The central bank followed with its announcement that it would increase its asset purchase program, including Japanese government and corporate bonds, to 15 trillion yen, from 10 trillion yen previously. It said it would also expand its credit facility to 35 trillion yen, from 30 trillion yen. Those moves were aimed at increasing liquidity and helping to dilute the value of the yen.

The Bank of Japan also kept its benchmark interest rate near zero.

“Concerted action between the Ministry of Finance and the Bank of Japan should be taken as a clear sign that both the government and the Bank of Japan do not want to break the current economic recovery due to the unacceptable yen appreciation,” Masaaki Kanno, economist at JPMorgan Securities, said in a note to clients.

Jethro Mullen contributed reporting from Hong Kong.

Article source: http://www.nytimes.com/2011/08/05/business/global/japan-moves-to-weaken-the-yen.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,