Industry News

Housing further dims economic outlook

Construction downturn sends U.S. leading index lower

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Continued weakness in home construction contributed significantly to December's 0.2 percent decline in the U.S. leading index, a gauge of future economic activity, The Conference Board reported today. A report Thursday from the U.S. Commerce Department found that housing starts last month fell to their weakest level since 1991 as builders try to sell off the massive amount of inventory of new homes on the market amid readjusting home loans and subsequent foreclosures, tightened credit standards and souring earnings reports that have wreaked havoc on home builders in 2007. December's drop in the leading index is the third straight monthly decline, and the index now stands at 136.5, the lowest since mid-2005. Besides building permits, other components making a significant negative impact on the index last month were declines in manufacturing hours worked and orders for nondefense capital goods, and a rise in jobless claims, all of which outweighed gains in vendor performance, money supp...