Weak home building holding down recovery
WASHINGTON — The budding economic recovery isn't getting much help from the home-building industry, which normally creates jobs and drives growth when a recession ends.
Uncertainty over whether a homebuyer tax credit would be extended weighed down construction last month — a sign of how much the fledgling recovery depends on government support.
Home building unexpectedly plunged to its lowest point since April, the Commerce Department said today. The figures show that builders fear there aren't enough buyers to soak up the glut of unsold homes already on the market — a supply magnified by record-high foreclosures.
Congress renewed the homebuyer tax credit earlier this month and broadened its reach. But even with government aid, the weakness of the housing sector is dragging on the economy.
The tepid recovery is also holding down inflation. While consumer prices edged up faster than expected in October, they remain lower than they were a year ago. And inflation is expected to stay subdued.
