Buffett Says American Business Improving

Omaha, NE, May 3, 2010--Berkshire-Hathaway CEO Warren Buffett said Sunday that he's seeing more manufacturing activity, but no big pick-up in the U.S. housing market yet.

Berkshire owns more than 70 companies, including Shaw Industries, that operate in many sectors.

"American business is improving from everything I see now," Buffett said Sunday, speaking at Berkshire's annual shareholders' meeting.

Unemployment has stayed stubbornly high so far this year, but Buffett said that this should change as U.S. businesses begin hiring again.

"Unemployment is going to come down," he said.

Buffett was less optimistic about the U.S. housing market, especially in the short term.

"There hasn't been any big pick-up in the housing market," Buffett said during a press conference.

Some of the stabilization in the housing market lately has been driven by the government's homebuyer credit, he said.

A sluggish housing market has benefits, however. If demand remains weak, fewer houses may be built, reducing the supply and giving time for household formation to catch up.

"You want quit making houses, and the number of households to grow again," Buffett said.

"The worst thing in the world now would be some crazy, artificial program to go to 1 million or 1.2 million residential starts," he said. "Then we'd have this overhang for longer."

If that doesn't happen, there could be a "pretty decent balance" between housing supply and demand from household formation within a year, he predicted.

Related Topics:Shaw Industries Group, Inc.