US housing starts surprisingly weak in July
Homebuilding in the States slowed down sharply in July with the details of a government report pointing to scant upside going forward, according to economists.
According to the Department of Commerce, housing starts grew by 0.9% month-on-month to reach an annualised pace of 1.168m, which was well short of economists' expectations for a reading of 1.273m.
Starts were weakest in the Northeast and West of activity, were the annualised pace fell by 4.0% and 19.6% versus June, respectively.
To take note of, Commerce also revised June's reading lower, from an annualised pace of 1.173m to 1.158m.
Starts for both single and multi-family homes increased last month, with the former rising by 0.9% to 862,000 and the latter by 3.1% to 303,000.
On the other hand, housing permits, which are considered to be a lead indicator of activity, rose by 1.5% month-on-month to 1.311m (consensus: 1.308m).
Nevertheless, Ian Shepherdson at Pantheon Macroeconomics expressed disappointment with the unexpectedly weak reading on starts, especially following a sharp surprise fall in June from May's level of 1.337m.
He also sounded a bleak note on the outlook for the sector.
Commenting on the 'in-line' reading on US housing permits for last month, he said that, "The bigger picture, though, is less encouraging.
"The trend in permits is flat, at best, and the downward trend in the NAHB index of homebuilder sentiment and activity suggests that no near-term recovery is likely. Housing is the sole weak spot in the economy right now, and that's probably not going to change."