US: Production and business almost stagnant, housing market gloomy

Mortgage rates have been unchanged for months, combined with rising home prices, making affordability still a major challenge for US homebuyers.

Mortgage rates have been unchanged for months, combined with rising home prices, making affordability a major challenge for homebuyers - Illustration: Business Insider

According to survey data released by S&P Global on February 21, US manufacturing and business activities almost stagnated in February due to growing concerns about tariffs on imported goods and deep cuts in federal government spending.

According to a VNA correspondent in Washington, the S&P Global Composite Purchasing Managers' Index (PMI), which tracks manufacturing and services sectors, fell to 50.4 in February 2025, the lowest level since September 2023 and down from 52.7 in January.

The manufacturing PMI rose to 51.6 in February from 51.2 in January, but the services PMI fell to 49.7, its first contraction since January 2023, from 52.9 in the previous month.

Inflation concerns dominated the S&P Global survey. The index of input prices paid by businesses rose to 58.5 in February from 57.4 in January. The reading was driven by a rise in the producer input price index to 63.5.

The index of new orders received by private businesses also fell from 53.7 in January to 50.6 in February. The employment index fell from 54.0 to 49.4.

Manufacturing activity fell to a 17-month low as businesses and consumers grew increasingly concerned about the policies of President Donald Trump's administration, according to S&P Global.

Many businesses have reported growing concerns about the impact of federal government policies, from spending cuts to tariffs and geopolitical developments, said Chris Williamson, chief economist at S&P Global Market Intelligence.

The S&P Global survey was conducted from February 10 to 20.

On the same day, the National Association of Realtors (NAR) released data showing that sales of previously owned homes in the US, after three consecutive months of increase, unexpectedly fell sharply in January 2025, due to high mortgage rates and home prices holding back demand.

On a seasonally adjusted basis, existing home sales decreased 4.9% in January 2025 to a seasonally adjusted annual rate of 4.08 million units. However, compared to the same period last year, through January 2025, existing home sales increased 2.0%.

Mortgage rates have been flat for months, combined with rising home prices, making affordability a major challenge for U.S. homebuyers, according to NAR chief economist Lawrence Yun.

Economist Bradley Saunders at Capital Economics predicts that with borrowing costs remaining above 7%, the weak purchasing activity will continue in the coming months.

Meanwhile, many economists are increasingly concerned that policies of President Donald Trump's administration such as tariffs and deportations of illegal immigrants could cause inflation to rise.

Consumer confidence falls to 15-month low

A survey report by the University of Michigan released on February 21 showed that this month, US consumer confidence fell to its lowest level in 15 months, while inflation expectations increased as households worried that President Donald Trump's tariff policies would reduce purchasing power.

Source: https://tuoitre.vn/my-san-xuat-kinh-doanh-gan-nhu-dinh-tre-thi-truong-nha-o-am-dam-20250222170115489.htm