U.S. housing and factories grim in February
The severe U.S. factory slump appeared to be getting even worse this month while sentiment among home builders shows few signs of recovering after the bursting of the housing bubble, data showed on Tuesday.
U.S. homebuilder sentiment held near all-time lows in February, suggesting sales of new single-family homes would be meager as long as mortgage foreclosures flood the market, the National Association of Home Builders said.
Factory activity in New York State fell to a record low in February, the New York Federal Reserve said, with new orders and employment falling sharply as the U.S. recession deepened.
The New York survey suggested that January’s minor halt in the worsening of factory data was an aberration rather than a signal of recovery that would also bring about a rebound in the economy.
“The data reaffirms other data we’re getting, which shows that economic activity continues to be weak,” said Jim Awad, managing director at Zephyr Management in New York.
“It’s possible that all four quarters will be negative this year. The data continues a pattern of bad data that will weigh on the markets for the foreseeable future.”
U.S. stocks slumped and U.S. Treasury bonds, which generally benefit during tough economic times, rose sharply in price as investors moved into safer havens.
EMPIRE STATE
The New York Federal Reserve’s Empire State factory index fell to minus 34.65, the lowest in the history of the index, which dates back to July 2001 payday loans guaranteed no fax. It was down from January’s already contractionary reading of minus 22.20.
Economists had expected a reading of minus 24, according to the median of their 46 forecasts, which ranged from minus 36.5 to negative 17.50.
The NAHB/Wells Fargo Housing Market Index eked out a one-point gain to 9 from the record low set in January, the group said in a statement. Economists polled by Reuters had predicted the index would stay at 8, the lowest reading since this measure started in January 1985.
Readings below 50 mean more builders view market conditions as poor than favorable. It was the fourth straight month the builder sentiment gauge clung to single digits, and was less than half of the reading of 20 posted a year ago.
The weakness of the day’s reports highlighted the magnitude of the problems facing world leaders, who are desperately trying to stem a global economic slump.
The finance ministers and central bankers of the G7 industrial powers, fearing a 1930s-style resurgence of protectionism, ended crisis talks in Rome on Saturday with a pledge to do all they could to combat recession without distorting free trade.
With the United States already more than a year into what may yet be the worst recession since the Great Depression, clouds also appeared to be darkening over its trading partners in Europe and Asia by the day.