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News > Economy
Housing starts drop
September 20, 2001: 11:09 a.m. ET

Ground-breaking for new U.S. homes much lower than expected in August
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NEW YORK (CNNfn) - Housing starts tumbled in the United States last month, the government reported Thursday, as what has been a pillar of strength in the world's largest economy showed some signs of weakness.

Starts on new homes and apartments fell 6.9 percent to a seasonally adjusted annual rate of 1.53 million units in August from July's revised rate of 1.64 million, the Commerce Department reported. Economists surveyed by Briefing.com expected housing starts at a rate of about 1.63 million.

Permits for new construction -- usually a better indicator of the market's future strength dipped to an annual rate of 1.56 million from July's rate of 1.57 million. Economists surveyed by Briefing.com expected new permits at a rate of 1.58 million.

The drop in housing starts was the steepest since March 2000 and left housing starts at their lowest level in 10 months.

Separately, new jobless claims tumbled to 387,000 last week, the Labor Department said, in a report that did not reflect the impact of last week's attacks on the World Trade Center and the Pentagon. The reading came in well below Wall Street forecasts of 420,000.

The housing market, supported by low mortgage rates, has been one of the few areas of strength during the year-long slowdown in the U.S. economy. The Federal Reserve has cut short-term interest rates eight times this year in a bid to prop up growth and ward off a recession.

But many economists think the Sept. 11 terror attacks could tip the economy into a downturn, impacting consumer confidence and the housing market. graphic


- from staff and wire reports

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