Housing Starts Still at Decent Pace
The likely pace of U.S. home construction in May could suggest that housing has resisted a slowing economy.
A Commerce Department report to be released Tuesday will show that builders started work on 1.597 million homes last month, analysts are predicting. Although that’s down 0.7% from April, the expected pace still shows starts in excess of the 1.592 million recorded in 2000.
The rate on a 30-year mortgage has averaged less than 7.1% this year, a point lower than the average in 2000, helping buoy sales. Consumer optimism about affordability has outweighed the effect of an eight-month slump in industrial production on employment and confidence, analysts said.
The spotlight will fall on Federal Reserve Chairman Alan Greenspan on Wednesday when he testifies on the state of the U.S. financial system at a hearing of the Senate Banking Committee. Greenspan also is scheduled to speak Wednesday on “The Growing Need for Skills in the 21st Century” before the Labor Department’s 21st Century Workforce meeting..
Other economic data coming this week:
Wednesday, the Conference Board will issue its May index of leading economic indicators, a gauge of economic growth over the next six to nine months.
Thursday, the Federal Reserve Bank of Philadelphia will issue its factory survey for June, a gauge of manufacturing in eastern Pennsylvania, southern New Jersey and Delaware.
Thursday, the Commerce Department will report on the nation’s trade deficit in April. It stood at $31.2 billion in March as growth in imports and exports slowed.
