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| Version 0 | Version 1 |
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| Fall in home building in the US | Fall in home building in the US |
| (20 minutes later) | |
| US construction spending fell sharply in October, led by a large fall in private home building as the US housing downturn appeared to be intensifying. | US construction spending fell sharply in October, led by a large fall in private home building as the US housing downturn appeared to be intensifying. |
| Overall construction expenditure declined 0.8% in October compared with September, a bigger contraction than most analysts had expected. | Overall construction expenditure declined 0.8% in October compared with September, a bigger contraction than most analysts had expected. |
| Private home building fell 2% to $503.7bn (£244m), a two-year low. | Private home building fell 2% to $503.7bn (£244m), a two-year low. |
| Further Commerce Department data showed that consumer spending was also weaker than expected in October, down 0.2%. | Further Commerce Department data showed that consumer spending was also weaker than expected in October, down 0.2%. |
| Sub-prime woes | |
| October's fall in overall construction spending was much worse than the 0.2% dip predicted by analysts. | |
| The drop in private home construction was the 20th straight monthly decline for the troubled sector. | |
| This sharp downturn in the US housing market has been sparked by higher mortgage rates over the past year. | |
| Centred on the sub-prime mortgage sector, it has led to record loan defaults and house repossessions. | |
| The knock-on effect has been multi-billion dollar bad mortgage debt loses for many of America's banks. | |
| These banks are now much less willing to lend to prospective homeowners, who are in turn less keen to join the housing market. | |
| The downturn is showing increasing signs of spreading to the wider US economy, hence October's decline in consumer spending. | |
| A majority of analysts now expect the Federal Reserve to cut interest rates next month. | |
| The Fed last lowered rates on 1 November, reducing them to 4.5% from 4.75%. | |
| That followed a bigger cut from 5.25% to 4.75% in October, which was the Fed's first reduction in rates for four years. |