US housing figures up... by 0.5%

Construction figures still not rising fast enough

Despite edging up by 0.5 percent, the latest housing figures in the US are far less than was anticipated, leading people to question how strong the US recovery is.

According to figures from the Commerce Department, the number of houses totalled 590,00 compared with 587,000 in August. However, it was still far below the number of homes built during the same time period last year - 822,000, a drop of 28.2 percent. It was hoped that the number of houses built would exceed 600,000.

Speaking to the BBC, Dan Cook at IG Markets said, "It doesn't bode too well. We really want to see an uptick here, as obviously housing is so important,"

"If we can get more starts, we're putting more people to work and that would be very positive, and unfortunately we just didn't see that today."

The fall in housing construction has been coupled with a reduction in the number of building permits awarded. The total number of building permit applications allegedly fell by 1.2 percent last month.

Trouble building nationwide

Despite a stimulus package in March for $120 billion in US infrastructure projects, the construction industry has still been suffering in the wake of the recession. As a result (and from the drop in fuel costs), producer prices have also fallen, although only by 0.6 percent. This was still contrary to analyst's expectations though.

While some sectors appear to be recovering and governments have been quick to say the world is emerging from the global economic downturn, it appears that some are slower than others and unfortunately, America is one of them.

"We keep waiting for some sort of inflationary pressures to reflect the better-than-expected [third quarter] earnings we're seeing in corporate America, [but] surprisingly enough we're just not seeing it," said David Dietze at Point View Financial Services.

Any sort of recovery would see prices soar, but currently, they are still falling.

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