"Interest rates are going up a little bit, that never helps. But we still have the background of what looks like a still-improving housing market"
- Paul Ashworth, chief U.S. economist at Capital Economics
A series of mixed economic reports from the world's largest economy came out on Friday, reinforcing a view it is too early for the Federal Reserve to start tapering its stimulus programme. The bright spot came from the property market, where new-home construction climbed in July, reflecting a pickup in multifamily projects. Figures from the Commerce Department showed that housing starts advanced 5.9% to an 896,000 annualized rate last month, up from 846,000 a month earlier that was higher than initially reported. The majority of analysts, however, expected a figure of 900,000. Moreover, multifamily construction soared 26%, while construction work began on 2.2% fewer single-family homes.
While housing starts rose, even below analysts' projections, confidence among American consumers unexpectedly fell in August, as consumers are facing rising interest rates. A survey conducted by the Thomson Reuters/University of Michigan unveiled that the preliminary gauge of consumer sentiment for this month ticked down to 80, compared with 85.1 in July, which was the highest since July 2007. An increase in mortgage rates in threatening to crimp momentum in the closely-watched housing market, which is contributing to economic growth, while job growth and increased personal wealth are helping to offset the effects of sequester.
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