Monthly Archives: July 2018

U.S. Housing Starts Pull Back Sharply To Nine-Month Low In June

After reporting a sharp increase in new residential construction in the U.S. in the previous month, the Commerce Department released a report on Wednesday showing a much steeper than expected pullback in housing starts in the month of June.

The Commerce Department said housing starts plunged by 12.3 percent to an annual rate of 1.173 million in June after jumping by 4.8 percent to a revised rate of 1.337 million in May.

Economists had expected housing starts to drop by 2.2 percent to a rate of 1.320 million from the 1.350 million originally reported for the previous month.

With the much bigger than expected decrease, housing starts fell to their lowest annual rate since hitting 1.158 million last September.

The steep drop reflected notable declines in both single-family and multi-family starts, which plummeted by 9.1 percent and 19.8 percent, respectively.

Building permits, an indicator of future housing demand, also fell by 2.2 percent to an annual rate of 1.273 million in June after tumbling by 4.6 percent to a rate of 1.301 million in May.

The continued decrease came as a surprise to economists, who had expected building permits to climb to an annual rate of 1.330 million.

The unexpected drop came as a 7.6 percent slump in multi-family permits more than offset a 0.8 percent uptick in single-family permits.

On Tuesday, the National Association of Home Builders released a separate report showing homebuilder confidence in the U.S. has held steady in the month of July.

The report said the NAHB/Wells Fargo Housing Market Index remained unchanged in July after dipping to 68 in June. The unchanged reading matched economist estimates.

“Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country,” said NAHB Chairman Randy Noel.

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Steady UK Inflation, Falling Core Figure Dull Outlook For August Rate Hike

UK headline inflation held steady for a second straight month and the core measure eased, complicating the picture for the Bank of England that is widely expected to hike interest rates in August.

Consumer prices climbed 2.4 percent year-over-year in June, the same rate of increase as in the previous two months. Economists had expected inflation to accelerate to 2.6 percent.

On a monthly basis, consumer prices remained flat in June versus the expected increase of 0.2 percent.

“Consumers have been feeling the benefit of the summer clothing sales, and computer game prices have also fallen,” ONS Head of Inflation Mike Hardie said.

“However, gas and electricity, and petrol prices all rose, with consumers seeing the highest price at the pump for nearly four years, with inflation remaining steady overall.”

Core inflation that excludes energy, food, alcoholic beverages and tobacco, eased to 1.9 percent in June from 2.1 percent in May. The rate was expected to remain unchanged.

Economists said the latest easing in core inflation is unlikely to deter the Bank of England from hiking interest rates in August.

“If core inflation were to continue falling faster than the Bank expects, then we think this would make a second rate hike in 2018 even more unlikely,” ING Bank economist James Smith said.

“Once the Bank has hiked rates in August, we think heightened Brexit uncertainty could make it very complicated for policymakers to raise rates again before May 2019.”

Another report from the ONS showed that input price inflation quickened to 10.2 percent in June from 9.6 percent a month ago. Prices were expected to grow by 10.1 percent.

This was the highest input price inflation since May 2017, driven by higher crude oil costs, despite falling on the month.

Meanwhile, monthly input price inflation eased notably to 0.2 percent from 3.3 percent in May. The expected increase was 0.4 percent.

Output price inflation edged up to 3.1 percent in June from 3.0 percent in the prior month. Month-on-month, output prices gained 0.1 percent from May, when it rose by 0.5 percent.

“If oil prices continue to fall back over the rest of the year, as we expect, then input price inflation is unlikely to remain this high for long,” Capital Economics economist Ruth Gregory said.

“And with few signs of “second-round” effects on wage settlements or inflation expectations, CPI inflation still seems likely to reach the 2 percent target by this time next year.”

Separate data from the ONS showed that average house prices in the UK in May grew at the slowest annual rate since August 2013.

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U.S. Housing Starts Pull Back Much More Than Expected In June

After reporting a sharp increase in new residential construction in the U.S. in the previous month, the Commerce Department released a report on Wednesday showing a much steeper than expected pullback in housing starts in the month of June.

The Commerce Department said housing starts plunged by 12.3 percent to an annual rate of 1.173 million in June after jumping by 4.8 percent to a revised rate of 1.337 million in May.

Economists had expected housing starts to drop by 2.2 percent to a rate of 1.320 million from the 1.350 million originally reported for the previous month.

The report also said building permits fell by 2.2 percent to an annual rate of 1.273 million in June after tumbling by 4.6 percent to a rate of 1.301 million in May.

Building permits, an indicator of future housing demand, had been expected to climb by 2.2 percent to a rate of 1.330 million.

The material has been provided by InstaForex Company – www.instaforex.com

Malta’s HICP Inflation Accelerates Further

Malta’s EU measure of inflation accelerated for the third straight month in June, figures from the National Statistical Office showed Wednesday.

The harmonized index of consumer prices, or HICP, rose at a faster rate of 2.0 percent annually in June, following a 1.7 percent increase in May.

Prices of food and non-alcoholic beverages grew 1.9 percent annually in June and utility costs went up by 1.3 percent. Meanwhile, clothing and footwear prices dropped 1.6 percent.

The material has been provided by InstaForex Company – www.instaforex.com

UK May House Price Growth Slowest Since 2013

UK house prices rose at their slowest pace in nearly five years during May, latest data from the Office for National Statistics showed Wednesday.

Average house prices rose 3 percent year-on-year after a 3.5 percent increase in April.

House price growth has been slowing after the Brexit vote in mid-2016 and remained under 5 percent for most of 2017 and into 2018, the ONS said.

The slowdown was led by south and east of England and prices fell 0.4 percent in London, marking the fourth consecutive decline in a row.

Compared to the previous month, house prices decreased 0.2 percent between April and May.

The average UK house price was GBP 226,000 in May, unchanged from the previous month.

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South Africa Retail Sales Growth Improves In May

South Africa’s retail sales growth accelerated at a faster-than-expected pace in May, figures from Statistics South Africa showed Wednesday.

Retail sales climbed 1.9 percent year-over-year in May, faster than the 0.5 percent rise in April. That was above the 0.8 percent increase economists had forecast.

Sales of household furniture, appliances and equipment grew 14.4 percent annually in May and those of textiles, clothing, footwear and leather goods rose by 4.1 percent.

On a monthly basis, retail sales increased 1.1 percent from April, when it dropped by 1.1 percent.

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