Housing Starts in August Fell, GDP is poised to accelerate, Premium gasoline not worth cost
September 20, 2016
Tuesday – September 20
The Commerce Department reported that August Housing Starts fell 5.8% from July to an annual rate of 1.142 million units, below the 1.186 million expected. The South, the biggest region for building, saw a decline of 15%, offsetting gains in the Northeast, Midwest and West. Building Permits, a sign of future construction, fell 0.4% to 1.14 million units, below the 1.160 million expected. Single-family starts fell 6%, while multi-family dwellings decreased by 5.4%. Housing Starts were up 0.9% from August 2015. Despite the weakness last month, the housing sector remains a bright spot in a somewhat slowing economy.
Fannie Mae released its September 2016 Economic and Housing Outlook on Monday showing that economic growth, Gross Domestic Product, is poised to accelerate to 2.6% in the second half of the year. The 2.6% would be up from the anemic 1% growth for the first six months of 2016. The uptick in Gross Domestic Product is expected from consumer and government spending. In housing, the share of new home sales that are under construction or not started has climbed to nearly 70%, improving the outlook for single-family home building.
A new report from motor club AAA shows that U.S. drivers wasted billions of dollars last year in filling their gas tanks with premium gasoline when regular gas would do just as well. AAA reports that due to low gas prices and a growing economy, drivers were more enticed to purchase the higher-paying premium gas products rather than the cheaper regular product. The AAA study revealed that premium provides little or no benefit to cars designed to run on lower octane, regular gasoline.