Washington, DC, Dec. 16--Housing starts rose 4.5% to a seasonally adjusted annual rate of 2.070 million homes in November, the Commerce Department said Tuesday. The last time home-building activity eclipsed the two million mark was in February 1984. Starts rose a revised 2.5% in October to a 1.980 million rate.
Economists had expected a 3.1% drop to a 1.90 million annual rate. But building permits, an indicator of future building activity, dropped by 5.4% to a 1.874 million annual rate.
"This is the strongest reading on housing starts in almost 20 years," wrote John Ryding, chief market economist at Bear Stearns, in a note to clients. He added that "housing will add solidly to growth in the fourth quarter even if housing starts slip somewhat in December as the permits data suggest."
The Commerce Department also reported that the trade gap, the broadest gauge of the nation's global trade, narrowed to $135.04 billion in the third quarter, from a revised $139.39 billion in the second quarter.
Economists had expected a shortfall of $136.2 billion.
The trade report showed the bulk of the current account deficit was accounted for by a $121.3 billion shortfall in the goods and services trade during the third quarter, down from $124.2 billion in the second.
