Construction of new homes in the US fell in October to their lowest level in six months amid continued uncertainty among homebuyers over the sustainability of the rebound in the housing market.
The housing starts figures from the Commerce Department show that the number of new homes started in October dropped by 10.6% from September, to 529000. This was significantly worse than economists’ expectations of a 1.7% fall.
For single-family homes, the figures show a 6.8% fall in October to 467000. Applications for bulding permits, a gauge of future activity, fell 4% to an annual rate of 552000 units, also below economists’ expectations.
Prior to October, housing starts have been flat for four straight months after a big rebound earlier in the year from historic lows.

Standard & Poor’s has given warning that nearly all of the world’s big banks lack sufficient capital to cover trading and investment exposure, risking further downgrades over the next 18 months unless they move swiftly to beef up their defenses.
Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P’s list of 45 global lenders fails the 8pc safety level under the agency’s risk-adjusted capital ratio. Most fall woefully short.
The most vulnerable are Mizuho Financial, Citi-group, UBS, Sumtomo Mitsui, Mitsubishi, Allied Irish, DZ Deutsche Zxentral, Danske Bank, BBVA, Bank of Ireland, Bank of America, Deutsche Bank, Caja de Ahorros Barcelona, and UniCredit.
While some banks may look healthy under normal Tier 1 and leverage targets, critics claim that these measures can be highly misleading as they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.

Mervyn King, Governor of the Bank of England, told the Committee there were signs that the UK economy was growing again, implying that the recession was over, but he warned that the strength and sustainability of the recovery were still highly uncertain.
Chairman of the Federal Reserve, Ben Bernanke, has also called the end of America’s recession.

A full-blown trade row erupted between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.
Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35% on Chinese tyre imports on top of an existing 4% tariff.
In his first big test on world trade ever since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres ad caused 7000 job losses among US factory workers.
Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades. China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies.
The US warned Beijing against taking retaliatory action. an official from the Office of the United States Trade Representative said that the retaliation would be inappropriate, as the US acted entirely within the bounds of trade laws and within the safeguard provision that China itself agreed to upon accession to the WTO. The official said that enforcing trade agreements and laws was “critical” to maintaining free markets. Another official said the US had “negotiated” to the end with the Chinese to come up with something we could all agree to.
US officials said that they were scrutinizing the export of poultry and vehicles, but said any action in reliation by China could result in a complaint by the US to the WTO.

US consumers hit the shops in August in higher-than-expected numbers, raising optimism among retailers planning for the holiday season. Economists already knew that the US government’s $3bn “cash for clunkers” scheme had boosted car sales last month, but retail sales were strong across the board.
Buyers for major department stores say privately that they are planning for a bumper holiday shopping season, and Toys “R” Us, the children’s retailer, said that it would open temporary stores at 350 locations across the US. In an unusual move for a retailer, these “pop up” stores will open in vacant properties at 80 malls or high streets, and inside its sister chain, Babies “R” Us, only to disappear again in January.
Last year’s holiday season was the worst for retailers in 40 years by some measure, and consumer surveys have not so far predicted a strong rebound this year. But some chains have reported an upturn in spending in recent weeks, particularly over the Labour Day holiday.
Best Buy, the biggest consumer electronics chain in the US, missed its profit forecast for the second quarter of the year, but raised its outlook for the rest of 2009, saying that sales trends were improving , customer traffic was stabilising and it was also winning market share due to the bankruptcy of its main rival Circuit City earlier this year.
The August figure for retail sales caught Wall Street by surprise. Economists had expe ted a 2% jump, on an annualised basis, but the commerce department said that sales in fact grew 2.7%. Car sales were up by 10.6% due to the government scrappage scheme, but there were also gains of more than 1% in electronics, general merchandise and in the hobbies sector, which includes sporting goods, books and music.