Picture: 123RF/Darryl Brooks
The jump in homebuilding activity last month added to strong retail sales data in suggesting the economy continues to grow moderately and is probably not flirting with a recession as has been flagged by financial markets. A year-long trade war between the US and China has dimmed the economic outlook.MARTIN WOLF: The rise of rentier capitalism is partly why the economy...
Economists had forecast housing starts would advance to a pace of 1.250-million units in August. Building permits increased 7.7% to 1.419-million units in August, the highest level since May 2007. Housing starts rose 6.6% on a year-on-year basis in August. The 30-year fixed mortgage rate has dropped more than 130 basis points to an average of 3.56%, according to data from mortgage finance agency Freddie Mac.
Stocks on Wall Street were trading lower after package delivery company FedEx warned that full-year earnings would miss analysts' estimates because of the US-China trade war and the fallout from its split with customer-turned-competitor Amazon.com.August's robust homebuilding performance raised hopes that residential investment would rebound in the third quarter after contracting for six straight quarters, the longest such stretch since the 2007-2009 recession.