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Housing Construction Down For 8th Month

The Commerce Department reports that construction activity saw further weakening in November, with home building down for a record eighth straight month.

The 0.2 percent decline took construction down to a seasonally-adjusted annual level of $1.18 trillion. That followed declines of 0.3 percent in October and 0.8 percent in September.

Analysts believe that home building could remain weak for several more months as builders work to reduce their backlog of unsold homes.

Housing has been in a slump after a boom fueled by the lowest mortgage rates in more than four decades.

Spending on nonresidential projects showed strength last month, rising to an all-time high.

Sharper-Than-Expected Housing Slump Gave Federal Reserve Jitters

Heightened concern about the harsher-than-expected housing slump was a key factor in the most recent decision by Federal Reserve policymakers to leave interest rates untouched.

Minutes of the Fed's deliberations last month show that policymakers revealed increased concern over the real estate bust — even as they were reiterating that their No. 1 aim was to see inflation, which has been calming down, continue to recede.

The Fed held interest rates steady at the December session. But it also left the door open to a possible rate increase, if needed, to thwart inflation.

However, one Fed member — who was not identified in the minutes of the meeting — thought the central bank should have held out the possibility of a rate cut as well.

That member thought the Fed's statement issued last month "should emphasize that policy could be adjusted in either direction, depending on the evolution of the outlook for inflation and economic growth."