WNKU: Housing, Industrial Data Point to Steady Growth (2012-05-16)
Groundbreaking for U.S. homes rebounded in April and factory activity gained steam, suggesting a moderate pick up in economic growth early in the second quarter.
The reports on Wednesday were the latest in a series to dampen fears that the recovery in the world’s largest economy was stagnating after tepid job growth last month.
The Commerce Department said housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units.
In a separate report, the Federal Reserve said production at the nation’s mines, factories and utilities rose 1.1 percent - the largest gain since December 2010.
“The economy is grinding its way forward, but it’s not firing on all cylinders. There is plenty of reasons to be nervous; Europe is top on that list,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.
The reports came on the heels of data on Tuesday showing a strong rebound in factory activity in New York state and confidence among home builders hit a five-year high this month. Retail sales in April also showed underlying strength.
Stocks on Wall Street pushed higher on the housing and industrial production data. Sentiment was also buoyed by hopes that debt-stricken Greece would remain in the euro zone.
Prices for U.S. Treasury debt fell, while the dollar was marginally firmer against a basket of currencies.