Sunday, September 17, 2006

Don't Worry

Be happy. Bloomberg (09.17.06):
"The housing industry is the leading edge of a U.S. economic slowdown that will prompt Federal Reserve policy makers to keep interest rates steady, reports this week are forecast to show.

Builders started work on homes at an annual rate of 1.75 million last month, the fewest since April 2003, according to the median estimate in a Bloomberg News survey of economists before a Sept. 19 report from the Commerce Department."

Home Building at 3-Year Low, Fed on Hold: U.S. Economy Preview

Oh and "(c)onstruction permits probably dropped to a four-year low" to boot. Still, Hank says it's OK. Bloomberg (09.17.06):
"U.S. Treasury Secretary Henry Paulson, making his debut at a meeting of Group of Seven economy chiefs, told his counterparts they needn't worry about a housing-led collapse of the world's largest economy."

"'U.S. economic growth is settling into ranges more in line with our long-term potential,' Paulson said in a statement after meeting G-7 finance ministers and central bank governors in Singapore today."

Paulson Tells G-7 Not to Fret Over U.S. Housing Slump

Without specifically mentioning what they were, Hank reassured the ministers that "growth in the U.S. economy is being supported by other components.'"

The International Monetary Fund is a bit more skeptical. A few days ago, it "branded the slowing U.S. housing market a 'key risk' to global expansion." Maybe it's right. Bloomberg (12.29.05):

"The housing industry accounts for only about 5 percent of the U.S. economy and yet generated half of the growth in [the] first six months [of 2005] and more than half of the private jobs added since 2001, Merrill Lynch & Co. said in an August report."

U.S. Economy: Home Resales Fall to Lowest in 8 Months


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