Single-family housing starts decline further in August
Single-family homebuilding fell for a second straight
month in August as builders continued to struggle with
shortages of materials and labor, suggesting the housing
market could remain a drag on economic growth in the
The report from the U.S. Department of Commerce also
showed the number of houses authorized for construction
but not yet started raced to a record high last month, a sign
of reluctance by builders to take on new projects.
Builders¡¯ inability to ramp up the production of singlefamily
homes amid a massive housing shortage is driving
up prices and keeping some first-time buyers from the
market. Building costs remain an issue even though
lumber futures have tumbled from a record high of $1,711
per thousand board feet in May to about $604 on
Single-family starts, which account for the largest share of
the housing market, dropped 2.8% to a seasonally-adjusted
annual rate (SAAR) of 1.076 million units last month. The
decline was, however, offset by a surge in starts for the
volatile multi-family segment. Starts for buildings with
five units or more soared 21.6% to a rate of 530,000 units
last month. The multi-family housing segment is being
boosted by demand for rentals as COVID-19 vaccinations
allow companies to recall workers to offices in city
As a result, overall housing starts advanced 3.9% to a rate
of 1.615 million units in August. Data for July was revised
up to a rate of 1.554 million units from the previously
reported 1.534 million units.
Economists polled by Reuters had forecast starts would
rebound to a rate of 1.555 million units. Housing starts
jumped 17.4% compared to August 2020.
Single-family starts dropped in the West and Midwest.
They rose in the Northeast and the densely populated
South. Single-family homebuilding has struggled to gain
traction since surging to a rate of 1.255 million units in
March, which was the highest level since November 2006.
In Canada, housing starts continued to cool from highs
earlier this year. The standalone monthly SAAR of
housing starts for all areas in Canada was 260,239 units in
August, a decrease of 3.9% from July. However, on a
trend and monthly SAAR basis, the level of starts activity
remains elevated by historical standards.
Existing home sales fell in August
Existing-home sales retreated in August, breaking two
straight months of increases, according to the National
Association of Realtors. Total existing-home sales fell
2.0% from July to a seasonally-adjusted annual rate of
5.88 million in August. Year-over-year, sales dropped
1.5% from a year ago (5.97 million in August 2020).
"Sales slipped a bit in August as prices rose nationwide,"
said Lawrence Yun, NAR's chief economist. "Although
there was a decline in home purchases, potential buyers
are out and about searching, but much more measured
about their financial limits, and simply waiting for more
Each of the four major U.S. regions experienced declines
on both a month-over-month and a year-over-year
perspective. Existing-home sales in the Northeast slid
1.4% in August, recording an annual rate of 730,000, a
2.7% decline from August 2020. Existing-home sales in
the Midwest fell 1.4% to an annual rate of 1,370,000 in
August, a 2.1% decline from a year ago.
Existing-home sales in the South slipped 3.0% in August,
registering an annual rate of 2,550,000, down 0.8% from
the same time one year ago. And existing-home sales in
the West decreased 0.8%, posting an annual rate of
1,230,000 in August, down 1.6% from one year ago.
Employment report disappoints
Job creation for August was a huge disappointment, with
the U.S. economy adding just 235,000 positions, the U.S.
Department of Labor reported. Economists surveyed by
Dow Jones had been looking for 720,000 new hires. The
unemployment rate dropped to 5.2% from 5.4%, in line
August¡¯s total ¡ª the worst since January ¡ª comes with
heightened fears of the pandemic and the impact that
rising Covid cases could have on what has been a mostly
The weak report could cloud policy for the Federal
Reserve, which is weighing whether to pull back on some
of the massive stimulus it has been adding since the
outbreak in early 2020.
Leisure and hospitality jobs, which had been the primary
driver of overall gains at 350,000 per month for the past
six months, stalled in August. Instead, professional and
business services led with 74,000 new positions, while
manufacturing gained 37,000.
The report comes with the U.S. seeing about 150,000 new
Covid cases a day, spurring worries that the recovery
could stall heading into the final part of the year.
Consumer sentiment steadies in September after
Consumer sentiment steadied in early September after
plunging the month before to its lowest level in nearly a
decade, but consumers continue to have a bleak view of
the outlook amid a stiff bout of inflation, a University of
Michigan survey showed.
The University of Michigan said its consumer sentiment
index edged up to 71 in the first half of September from
70.3 in August - the lowest since December 2011.
Economists polled by Reuters had forecast a reading of 72.
¡°The steep August falloff in consumer sentiment ended in
early September, but the small gain still meant that
consumers expected the least favorable economic
prospects in more than a decade," the survey's director,
Richard Curtin, said in a statement.
Manufacturing growth slowed in July
Economic activity in the manufacturing sector grew in
August, with the overall economy notching a 15th
consecutive month of growth, say the nation¡¯s supply
executives in the latest Manufacturing ISM Report on
The report¡¯s key metric increased by 0.4% to from July¡¯s
59.9 reading, with 50 or higher denoting overall growth.
ISM reported that 15 of the 18 manufacturing sectors saw
gains in August, including the Wood Products sector,
while the Furniture & Related Products made the strongest
A survey respondent from the Furniture & Related
Products sector noted that bookings and sales continue to
be strong, while persistent supply issues ¡ª including
availability of materials, freight/logistics/containers, and
allocation of key commodities¡ªcontinue to hamper
production¡¯s ability to meet demand.
Customs finds importers evaded duties by transshipping
through third country
U.S. Customs and Border Protection has found that a
group of cabinet importers is evading anti-dumping and
countervailing duty orders on Chinese products by transshipping
them through a SE Asian country.
In April 2020, the Kitchen Cabinet Manufacturers
Association won one of the largest anti-dumping cases
ever brought against China. The ITC unanimously found
injury to the U.S. cabinet industry, and Commerce
imposed duties of 70% on Chinese imports of cabinets and
But some importers appear to be trying to skirt these
duties. After noticing that cabinet imports from countries
like Vietnam, Malaysia, and Indonesia were rising out of
all proportion to production. MasterBrand Cabinets filed
11 EAPAs (requests for investigations under the Enforce
and Protect Act). Five of them the CBP vowed to
investigate. CPB said it has found ¡°substantial evidence¡±
that four companies circumvented AD/CVD duties by
CPB said two of the importers - Pacific Building Material
and GreenTree Trading - never answered its requests for
information. The other two - Deco Kitchen and Skyview
Cabinet - failed to show that their cabinets were made in
Malaysia and contained other "discrepancies and
Furniture maker MCS wins lawsuit against shipper
American home furniture manufacturer and supplier MCS
Industries has prevailed in federal court in its lawsuit
against Cosco Shipping. MCS filed the lawsuit in early
August against both Cosco and Mediterranean Shipping
Co. for $600,000. Mediterranean has not yet settled, but
Cosco has agreed to do so for an undisclosed sum.
MCS, which produces home decor, and architectural
moldings, claimed that since the pandemic, shippers have
colluded to manipulate the market. The collusion is made
possible by the fact that three shipping alliances now
control more than 90% of the primary east-west shipping
routes. Both Cosco and MCS hope the settlement will
rekindle their relationship. Mediterranean initially said it
was "shocked" by the suit and rejected claims of collusion.
It's unclear if it will opt to settle.
Shipping costs continue to rise. MCS says a container
shipped from China to the U.S. West Coast in 2019 would
have costUS $2,700. Now that same voyage would cost
more than US$15,000.
China extends hardwood tariff exemptions
According to the American Hardwood Export Council and
the National Hardwood Lumber Association NHLA,
Chinese tariff exemptions that were set to expire on
September 17 have been extended until April 16, 2022.
The tariffs apply to hardwood logs and lumber products
exported to China from the U.S.
China implemented these tariffs in May 2019 as a
retaliatory measure to the tariffs placed on it by the Trump
Administration. In February 2020, China first announced
exclusions. Of the 65 initial exclusions, seven were wood
products, including hardwood logs; jointed and nonjointed-
end lumber; "other" oak logs; and cherry, ash, and
other lumber with thickness over six millimeters.