Maybe the U.S. economy’s strength this winter wasn’t just weather-related after all.
Home construction is near a three-year high. And factory output has risen in three of the year’s first four months.
The data released Wednesday suggest growth in the April-June quarter is off to a good start, helped by falling gas prices and solid hiring gains. Fears of a spring slump are easing.
“It’s all very encouraging,” said Paul Ashworth, chief U.S. economist at Capital Economics. “Things look good at the moment.”
Builders broke ground in April at a seasonally adjusted annual pace of 717,000 homes, the Commerce Department said. That nearly matches January’s pace, the best since October 2008.
Construction rose for both single-family homes and apartments.
Some economists have noted that a warm winter led companies to move up some hiring and accelerate other activity _ including homebuilding _ that normally wouldn’t occur until spring. That gave the appearance that the economy had strengthened in January and February and weakened in March.
But Ashworth noted that the overall trend in housing starts has been running at roughly the same annual pace _ approximately 700,000 _ over the past six months. That’s 100,000 more on average than the pace for the previous six months.
Ashworth said the higher level suggests demand is increasing and the mild winter had less effect than some economists had thought.
“We expect starts to strengthen further this year,” Ashworth wrote in a note to clients.
Even with the gains, the rate of construction for all homes is only about half the 1.5 million annual pace that most economists consider healthy. But the increase, along with rising builder confidence and stronger job growth, is a sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.
Single-family home construction is now 39 percent higher than its recession low. And developers are also anticipating more sales. Permits for single-family home construction rose 2 percent last month.
The growth in single-family home construction is important because those homes make up roughly 70 percent of the market. Since the recession, homeownership has declined while demand for apartments has surged.
Economists say continued job gains could quickly reverse that trend.
“Homebuilders are reporting stronger demand,” Ian Shepherdson, an economist at High Frequency Economics, said in a note to clients. “And while rental demand means the multi-family sector is much stronger than single family, that will change as the labor market improves further.”
U.S. manufacturing, one of the strongest areas of the economy since the recession ended nearly three years ago, also rebounded in April after a March lull.
Factory output is now 18.3 percent higher than its low hit in June 2009, the month the recession ended. It’s only 6.1 percent below its pre-recession peak.
Factories are busier in part because automakers are selling more cars and trucks. Half of April increase in factory output reflected a 3.9 percent jump in the production of motor vehicles and parts. That was the fifth straight gain at auto plants.
Production also rose at a wide range of companies in April, from makers of computers and electronics to aerospace and furniture factories.
The modest gain shows that U.S. manufacturers aren’t cutting back in the face of Europe’s financial crisis and slower growth in China.
Faster output at U.S. factories has been a key reason employers have added 1 million jobs over the past five months. It’s also helped lower the unemployment rate from 9.1 percent in August to 8.1 percent last month.
Manufacturing companies have added 167,000 jobs in that stretch. That’s roughly 17 percent of the job gains, even though manufacturing represents less than 10 percent of the economy.
More jobs, along with record-low mortgage rates and low home prices, are making home buying more attractive to some Americans.
And gas prices have dropped in the past month after surging earlier this year. So consumers have more money for other purchases. The average price of a gallon of gas was $3.73 on Wednesday, according to AAA. That’s 18 cents less than a month ago.
Some hurdles to a smooth recovery remain: Builders are struggling to compete with deeply discounted foreclosures and short sales. (Short sales occur when a lender accepts less than what’s owed on a mortgage.)
And many would-be buyers are struggling to qualify for home loans or can’t afford larger down payments that banks require.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
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The $2 billion trading loss at JPMorgan (JPM) Chase & Co. has revived concern that its regulator, the Federal Reserve Bank of New York, is too cozy with Wall Street.
JPMorgan Chief Executive Officer Jamie Dimon is one of three bankers sitting on the board of the New York Fed, as required by law. While directors play no part in bank supervision, Elizabeth Warren, a Democrat running for U.S. Senate from Massachusetts, called for Dimon
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Record Chinese oil imports are emptying the Atlantic Ocean of very large crude carriers and their 2 million-barrel cargoes, driving a rebound in rates for the smaller vessels left to supply the U.S. from West Africa.
Suezmaxes, each holding 1 million barrels, will earn an average of $18,750 a day this quarter, 45 percent more than now, according to the median of six analysts surveyed by Bloomberg. That
U.S. government programs designed to stem the financial crisis starting in 2008 will probably break even in the long term, Treasury Department officials said.
So-called financial stability programs include excess earnings from the Federal Reserve and don
Employers in the U.S. boosted payrolls more than forecast in February, capping the best six- month streak of job growth since 2006 and sending stocks higher.
The 227,000 increase followed a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed today in Washington. The median projection of economists in a Bloomberg News survey called for a 210,000 rise. The jobless rate held at 8.3 percent, even as 476,000 more workers sought employment.
More jobs are helping fuel the wage gains that drive consumer spending, which accounts for about 70 percent of the economy. The latest pickup in employment bolsters President Barack Obama
Millions of borrowers who suffered financial losses because their mortgage lenders played fast and loose while processing their foreclosures now have two ways of getting a payback.
They can tap the $26 billion settlement between the state attorneys general and the nation’s five biggest banks that was inked two weeks ago.
Foreclosure Fiasco
The other foreclosure settlement: Millions of homeowners eligible Foreclosures climbed in January What the foreclosure settlement means for you Mortgage deal could bring billions in relief Foreclosure deal has 40 states, but others balk
But there is also an earlier settlement that has been nearly forgotten — and that could lead to an even bigger payoff, in some cases.
As part of an enforcement action by federal authorities last April, 14 mortgage servicers, including Bank of America (, Fortune 500), Chase (, Fortune 500), Citibank (, Fortune 500), HSBC (), MetLife Bank (, Fortune 500), PNC Mortgage (, Fortune 500) and Wells Fargo (, Fortune 500), agreed to hire independent consultants to investigate foreclosure abuses and compensate those who suffered financial harm.
As a result of the program, up to 4.3 million mortgage borrowers who were foreclosed on in 2009 and 2010 will have a chance to request an independent review of how their foreclosure was handled.
So far, only 90,000 eligible homeowners have submitted claims, prompting the feds to extend the deadline for applications by three months to July 31.
The exact amount of money borrowers will receive has yet to be determined. But if a review finds that "financial injury" occurred — say a bank charged inappropriate fees or it went forward with a foreclosure without a valid claim to the property — a homeowner could be repaid in full for their losses.
Borrowers who were improperly charged even just a single fee could be repaid for it, according to Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency, one of the federal regulatory agencies that negotiated the agreement.
And borrowers who suffered much larger losses could be in line for much bigger repayments than promised by the AG’s settlement, which will pay up to $2,000 to the estimated 750,000 who lost their homes to foreclosure between 2008 and 2011.
The compensation could even repay the cost of regaining a wrongfully lost home if warranted by the facts of the case, according to Hubbard.
The Independent Foreclosure Review was sparked by the robo-signing scandal that exposed the bank’s treatment of borrowers in the foreclosure process. The lenders lost documents and recreated them, had low-level employees with no knowledge of what they were attesting to sign legal papers and bent the rules requiring them to halt foreclosures if borrowers sought mortgage modifications.
What the $26B foreclosure settlement means for you
Unlike the $26 billion settlement with the state attorneys general, borrowers didn’t have to lose their homes in order to receive compensation, according to Hubbard.
"It could be anyone who suffered financial loss because of errors made in the foreclosure process," he said.
Since the settlements are completely independent of one another, claimants can double-dip, filing for compensation under both settlements. (To seek compensation under the state attorneys general settlement, contact your lender or servicer and ask them to review your case).
To make a claim for the Independent Foreclosure Review, borrowers have to fill out a five-page form that identifies some examples of situations that may have led to financial injury. Borrowers do not have to provide documentation. That will be handled by an independent agency.
No reviews have been completed yet, according to Hubbard. And individual cases may take months to come to decision.
For more information on the forms, go to the website set up by the servicers. And for a full list of the mortgage services involved in the Independent Foreclosure Review, go to the Federal Reserve website
Firefighters doused smoldering buildings and cleanup crews swept rubble from the streets of central Athens on Monday following a night of rioting during which lawmakers approved harsh new austerity measures demanded by bailout creditors to save the nation from bankruptcy.
Police said rioters destroyed or damaged more than 110 buildings, of which 50 were burned. They included nine listed as national heritage buildings, mostly in the neoclassical style, while 30 stores were looted.
Smoke still rose from the remains of a landmark 1870 building which had housed one of the capital’s most loved cinemas, the Attikon, since 1916. About 100 people held a candle-light protest outside the gutted structure late Monday.
“Criminals targeted all that was best in the city of Athens, its neoclassical monuments,” said Thanassis Davakis, cultural policy chief of the conservative New Democracy party, a coalition government partner. “The damage must be swiftly redressed and the city’s memory restored.”
The stench of tear gas still hung in the air on Monday, choking passers-by, while traffic lights at many major intersections were out after being smashed. The Athens municipality said cleanup crews had gathered an estimated 40 tons of broken marble and rocks from the streets of the center, while railings, drainage covers and paving stones from sidewalks also suffered extensive damage.
More than 170 people were hurt in the rioting which also broke out in other Greek cities. Authorities said 109 police needed medical care after being injured by gasoline bombs, rocks and other objects hurled at them, while at least 70 protesters were hospitalized.
Police arrested 79 people _ including a 14-year-old _ and detained a further 92, while in several cases they had to escort fire crews to burning buildings after hooded and masked protesters prevented access, injuring four firefighters. Police also said they were investigating a complaint from a businessman that rioters demanded money to leave his establishment intact.
A police statement said the suspects would be charged with offenses ranging from attempted murder and possession of explosives to looting.
“(The rioters) intentionally picked traditional buildings to burn,” New Democracy leader Antonis Samaras said. “These scum must know that when the time comes I will rip off their hoods.”
Athens Traders’ Association head Panaghis Karellas demanded the dismissal of Public Order Minister Christos Papoutsis, and said afflicted shopowners should receive state compensation.
“Once again, those in positions of responsibility, even though they should have been prepared, were unable to fulfill their duty and secure the well-being of citizens and visitors, cultural landmarks and historic buildings, public and private property and our country’s international image,” the association said in a statement.
The ESEE national commerce confederation said most of the badly damaged shops will very likely never open again. “The center of the capital looks as if it has been bombed,” an ESEE statement said.
The rioting began Sunday afternoon after more than 100,000 protesters marched to the parliament ahead of a vote on drastic austerity measures that include axing one in five civil service jobs over the next three years and slashing the minimum wage by more than a fifth no fax cash advance.
Lawmakers approved the bill in a 199-74 vote, to the relief of investors who pushed the Athens stock index up 4.7 percent.
The vote was crucial for the country to secure euro130 billion ($172 billion) in new rescue loans and avoid a potentially catastrophic default next month _ bankruptcy could push Greece out of Europe’s euro currency union, drag down other troubled eurozone countries and further roil global markets.
The new bailout deal, which has not yet been finalized, will be combined with a massive bond swap deal to write off half the country’s privately held debt, reducing Greece’s debt load by about euro100 billion.
However, it could take time before the country receives any of the cash. For both deals to materialize, Greece has to persuade deeply skeptical creditors it has the will to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.
Eurozone finance ministers meet on Wednesday to discuss the issue, after refusing to approve the plan during a meeting last week, saying Athens had to first approve the new austerity measures.
But German Finance Ministry spokeswoman Marianne Kothe said the ministers will not make a final decision on the second aid package Wednesday. She said the bond swap agreement must be finalized first, and the ministers will focus on measures “necessary for the second Greek package.”
Before signing off on the bailout, the eurozone ministers also want Greek political leaders to commit in writing to uphold the austerity plan even after the general election in April. Government spokesman Pantelis Kapsis said the written guarantees are needed by Wednesday.
Although the bill passed the Parliamentary vote, there was strong dissent among the majority Socialists and rival Conservatives who make up Greece’s interim coalition government. The Socialists and Conservatives expelled the 22 and 21 lawmakers respectively, reducing their majority in the 300-member parliament from 236 to 193.
Germany gave the vote result a cautious welcome, with Foreign Minister Guido Westerwelle describing it as “a first significant step along the right road.”
“However, the actual difficult work with implementing the reforms that have been agreed on is only just starting now,” he said. “That is the decisive precondition for Germany and the other euro partners being able to stand by Greece with a further rescue package.”
The new austerity comes after two years of deep spending cuts and repeated tax hikes that have sent unemployment soaring to more than 20 percent and left the country struggling through a fifth year of recession.
Those measures were taken in return for a first, euro110 billion ($145 billion) package of rescue loans, but despite the cutbacks, Greece repeatedly failed to meet its targets in reducing its debt and deficit and increasing economic competitiveness.
____
Geir Moulson and Juergen Baetz in Berlin and Nicholas Paphitis in Athens contributed to this report.
Shares of Whirlpool spiked more than 17% Wednesday after the appliance maker issued a strong outlook for 2012, despite a soft fourth quarter.
The company is forecasting earnings per share of $7.30 to $8 — well above analysts’ expectations of $5.85, according to Thomson Reuters estimates.
Whirlpool (, Fortune 500) executives said demand has started to improve and it hopes to build on that momentum. "We do expect 2012 to be a strong year," said CEO Jeff Fettig said during an earnings call Wednesday.
The company instituted a number of cost cutting measures in 2011, including cutting 5,000 jobs, and closing a refrigerator factory in Arkansas. And it expects to continue cost cutting in 2012, although executives didn’t offer any details during Wednesday’s call.
For today, at least, investors were firmly focused on the earnings outlook and analysts say Whirlpool’s price increases and cost cutting efforts will be the biggest drivers in 2012. The stock was the biggest gainer in the S&P 500 Wednesday.
Before breaking out the champagne, it’s worth noting that Whirlpool has been here before and the company faces some serious headwinds, not the least being its roster of competitors creditreport. That includes ElectroluxAB (), which reports earnings Thursday, LG, Samsung and General Electric (, Fortune 500).
Whirlpool cutting jobs
"It’s a pretty ambitious outlook," said Longbow Research analyst David MacGregor. "I think this excitement is going to be short lived."
MacGregor said a big chunk of the volume in Whirlpool Wednesday was likely short covering — reversing bets that the stock will fall. "There were a lot of people short going into the [conference] call," he said.
Still, Whirlpool ended 2011 with a solid balance sheet: $1.1 billion of cash is nothing to sneeze at.
"While we view 2012 guidance as a potential positive for the stock, we believe further detail is needed," said JPMorgan analyst Michael Rehaut in a research note.
Whirlpool’s biggest customers include Sears Holdings Corp. (, Fortune 500). Lowe’s (, Fortune 500), Home Depot (, Fortune 500) and Best Buy (, Fortune 500).
Valuations for U.S. equities have been stuck below the five-decade average for the longest period since Richard Nixon
The U.K. economy shrank more than economists forecast in the fourth quarter as manufacturers cut output and services stagnated, leaving Britain on the brink of another recession.
Gross domestic product fell 0.2 percent from the third quarter, when it increased 0.6 percent, the Office for National Statistics said in London today. The median forecast of 33 forecasts in a Bloomberg survey was for a drop of 0.1 percent. Public-sector strikes over pensions on Nov. 30 had
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