Improving Housing Market Gives Encouragment Despite Fiscal Challenges

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On Thursday a government report showed positive growth in the housing sector during the month of December, adding further momentum to the housing recovery in a typically slow winter month.

The Commerce Department announced that for the month of December 954,000 new housing starts were added throughout the U.S.

Briefing.com previously estimated 889,000 new housing starts for December.

Permits for future home construction moved higher to a 903,000, the highest level since July 2008.

Meanwhile, the government revised lower its November housing starts to 851,000 from  861,000.

The better than expected boost in housing is due to a tight supply of new and previously occupied homes along with historically low interest rates and an improving unemployment rate. On Thursday it was also announced that first-time claims for unemployment benefits dropped to a five-year low last week. 

Many housing analysts are expecting the positive housing trend to continue in 2013 and provide support to the U.S. economy at a time when U.S. fiscal policies are still being sorted out in Washington and many Americans are slowly feeling the impact of a 2% payroll tax hike from their first paychecks beginning in January.

On Thursday House Republicans indicated that they might support a short-term extension of the nation’s legal borrowing limit for just a few months, a move that could provide them with some extra time to negotiate with the White House and Democratic-controlled Senate over a plan to deal with the debt ceiling and federal spending cuts, including across the board sequester cuts.

China

China’s fourth quarter GDP data was better than expected, showing a 7.9 percent rise compared with estimates of  7.8 percent. Industrial production increased by 10.3% in December which is in line with estimates.

 

 

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