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| U.S. housing starts unexpectedly rose 0.6
percent in August to their highest level in five months as low mortgage
rates encouraged construction, but permits fell more than anticipated, a government
report showed on September 21, 2004.
(Reuters) |
U.S. housing starts unexpectedly rose 0.6 percent in August to their highest level
in five months as low mortgage rates encouraged construction, but
permits fell more than anticipated, a government report showed on Tuesday.
Housing starts climbed to a seasonally adjusted annual rate of 2.000
million units from an upwardly revised 1.988 million in July, the Commerce
Department said. Analysts polled by Reuters had expected starts to ease to
a 1.935 million pace.
"It suggests that the housing market is still quite healthy despite the
increase in mortgage rates earlier this year," said Gary Thayer, chief
economist at A.G. Edwards & Sons.
Separately, reports showed U.S. chain store sales in early September
rose from a year ago.
Analysts said the housing starts increase was a pleasant surprise
because it counts a period just before recent destructive hurricanes in
the South, which are likely to boost housing construction.
The dollar rose modestly against other currencies
on the data, which could be indicative of a stronger economy and may portend
higher interest
rates. Market watchers were waiting for further cues from a Federal
Reserve statement on the economy due later in the day.
U.S. stocks were nearly unchanged by midday, with the Dow Jones
industrial average up 7 points at 10,212.
U.S. Treasuries prices slipped as traders turned cautious ahead of what
is expected to be the Federal Reserve's third interest rate boost of the
year.
The benchmark 10-year note price eased 5/32 on the housing data, while
yields edged up to 4.08 percent after registering a five-month closing low
of 4.06 percent on Monday.
Single-family housing starts rose to a 1.667 million unit rate, the
strongest showing since November 2003.
All housing starts in the Northeast rose to 196,000
units, their highest level in more than 14 years, when builders
broker ground at a 216,000 annual pace in February 1990.
(Agencies) | 
Updated: 2004-09-22 11:27