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Homes have been the sweet spot for the economic recovery- but as other sectors lag, the dependence on housing to drive the ...
broader recovery is a growing concern. Housing remains strong: new data shows groundbreaking for new U.S. homes at their highest level since 2008- at an annual rate of more than a million. But they were driven by a big jump in construction of multi-family homes- and that's a volatile part of the industry. Starts for single family homes actually fell.
Tags:reuters,american express,Ken Chenault
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Homes have been the sweet spot for the economic recovery- but as other sectors lag, the dependence on housing to drive the broader recovery is a growing concern. Housing remains strong: new data shows groundbreaking for new U.S. homes at their highest level since 2008- at an annual rate of more than a million. But they were driven by a big jump in construction of multi-family homes- and that's a volatile part of the industry. Starts for single family homes actually fell. But Moody's Analytics Celia Chen is not worried: SOUNDBITE: CELIA CHEN, SENIOR DIRECTOR, MOODY'S ANALYTICS (ENGLISH) SAYING: "I think there is a little bit of retrenchment in the last quarter say from the end of last year to the March numbers, and that retrenchment is probably due to uncertainties surrounding our fiscal state. That created uncertainties about the budget, created a little bit less confidence on the part of investors and on the part of home buyers and that does dampen enthusiasm a little bit for housing." The housing market is key to the broader economic recovery. Home building added to national economic growth last year for the first time since 2005- and is still expected to provide support this year. SOUNDBITE: CELIA CHEN, SENIOR DIRECTOR, MOODY'S ANALYTICS (ENGLISH) SAYING: "I think the housing aspect of the economy is a big generator of economic growth. For example for every single family home that is built the economy generates almost five jobs. That is two direct jobs and three indirect jobs through retailers, through the financial services industries, a stronger housing market can definitely help to push up the economy. " Housing often drives retail - moving into a new home often means shopping for things to go into that home. That's been good news for companies like Home Depot and its rival Lowe's- both stocks up in the past year. But U.S. retail sales fell in March, suggesting consumer spending was much weaker in the first quarter than analysts previously believed. And the most recent jobs report was much worse than forecasts. Those big picture worries are a concern for American Express CEO Ken Chenault: SOUNDBITE: KENNETH CHENAULT, CHAIRMAN AND CEO, AMERICAN EXPRESS (ENGLISH) SAYING: "The economic recovery as I look at it in the broad scale is going to be relatively slow and I don't have a great deal of confidence that there is going to be any turnaround in the near term and I think what we have got to hope for is that it will stay stable." Chenault adds that while he is not sure how long it will last- so far the consumer has been resilient in a challenging economy.