US Housing Construction Slows Down Sharply, Inflation Spikes Up

A new data from the US government showed that the housing construction has significantly slowed down in October, suggesting a painfully slow and uneven economic recovery in the coming months.

Aside from this, inflation remains a threat to the economic growth, forcing the Federal Reserve to keep interest rate low for an extended period.

A Chicago-based research firm on Friday said that new home constructions in the United States have hit a six-month low in October, suggesting a slow and uneven economic recovery in the coming months.

Nick Kalivas, vice president of financial research at MF Global, said that the economy is barely making surges in October with housing market production remained low. The official also said that the recent surge in the cost of the new and used vehicles has led to the increase in consumer prices in the past couple of months.

MF Global has released the data a day after reports from government officials that the industrial output in the US has barely moved in October, saying that the recovery process will be painfully slow despite strong outcome in the third quarter.

According to experts, the US Federal Reserve will be forced to implement a near zero interest rate for an extended period due to the threat of inflation after slow healing process in the housing market.However, Kalivas assured the public that the economic recovery has already passed the crucial stage, saying that a double-dip recession is unlike.

Earlier, the Commerce Department has reported of a 10.6 percent (529, 000 units) drop in the annual rate of the housing market. It was the lowest record since April this year and biggest drop in home construction in 10 months.


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