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US Housing Starts Rise

  • VOA News

A new home is constructed in Pepper Pike, Ohio, Dec. 6, 2012.

A new home is constructed in Pepper Pike, Ohio, Dec. 6, 2012.

U.S. builders started construction on more homes in August than the previous month. But a survey of the leaders of major companies across the nation shows they are a little less optimistic now than they were earlier this year.

Wednesday's report from the Commerce Department shows that while housing starts rose nine-10ths of one percent in August, that is less than some economists had predicted.

The Business Roundtable's survey of chief executive officers shows 71 percent of them expect sales to grow in the next six months. That is down seven percentage points over the past three months.

Wednesday's reports come as top officials at the U.S. central bank are meeting to decide when and how much to cut back on efforts to stimulate the U.S. economy.

Top officials of the U.S. Federal Reserve are scheduled to publish their decision Wednesday afternoon , and Fed chairman Ben Bernanke is expected to meet with journalists to explain the Fed's actions.

Many U.S. economists said the Fed would trim or "taper" the economic stimulus they have been using to boost the American economy from the worst recession in decades.

A key part of the stimulus is an $85 billion-a-month program to buy securities, which is intended to cut long-term interest rates and encourage companies to buy new equipment and families to purchase homes.

Economist Jim O'Sullivan of High Frequency Economics said he expected the Fed to cut the asset purchases by $10 billion a month.

If officials cut back too soon, the world's largest economy could fall back into recession. If they over-stimulate the economy, they raise the risk that inflation could cause serious problems.

Even though the U.S. economy has been improving, job growth has been sluggish in recent months, and some workers have given up their search for employment. The country's jobless rate has dipped to 7.3 percent, the lowest since late 2008, but still well above the historical norm of less than 6 percent.

But the country's stock markets have recovered from the recession, with major indexes near all-time highs. Major corporations have been reporting strong profits.

Some information for this report was provided by Reuters.