Housing starts have unexpected gain
WASHINGTON - Housing starts jumped more than forecast in May while industrial production tumbled, offering a picture of an American economy still struggling to emerge from the deepest recession in half a century.
Builders broke ground on 532,000 dwellings at an annual rate, with single-family starts posting a third straight gain, Commerce Department figures showed yesterday.
Output at factories, mines, and utilities dropped 1.1 percent, and the share of industrial capacity in use slid to a record low, the Federal Reserve said.
“The paralysis and the panic phase of this downturn is behind us’’ and “the rate of decline has slowed, but there are lots of problems that have yet to be cleaned up,’’ said Joshua Shapiro, chief US economist at Maria Fiorini Ramirez Inc.
Homebuilders’ shares advanced for the first time in five days after the housing report reinforced evidence that the industry’s decline, now in its fourth year, will end in the second half.
But rising unemployment may prevent any boom after the bust, and stunt a manufacturing recovery.
Wholesale prices dropped 5 percent in the 12 months to May, the biggest slump in half a century, the Labor Department also reported yesterday.
