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Report from
North America
US government shutdown continues
Crrently, the US federal government is providing only
“essential” services until a budget deal is finalised. To-
date, little progress has been made toward forging a
bipartisan agreement since the shutdown began on 1
October. Trade and other economic data reports are not
being produced by US government agencies until the
shutdown is ended.
Home sales accelerated in September as mortgage
rates eased
Sales of previously occupied US homes accelerated in
September as declining mortgage rates and a pickup in
available properties on the market encouraged buyers.
Existing home sales rose 1.5% last month from August to
a seasonally adjusted annual rate of 4.06 million units the
National Association of Realtors reported. That’s the
fastest sales pace since February. Sales jumped 4.1%
compared with September last year. The latest sales figure
came in slightly below the roughly 4.07 million pace
economists were expecting.
The US housing market has been in a sales slump since
2022, when mortgage rates began climbing from historic
lows. Sales of previously occupied US homes sank last
year to their lowest level in nearly 30 years. Mortgage
rates started declining in July in the lead-up to the Federal
Reserve’s decision last month to cut its main interest rate
for the first time in a year amid growing concern over the
US job market.
"As anticipated, falling mortgage rates are lifting home
sales," said NAR Chief Economist Dr. Lawrence Yun.
"Improving housing affordability is also contributing to
the increase in sales."
"Inventory is matching a five-year high, though it remains
below pre-COVID levels," Yun added. "Many
homeowners are financially comfortable, resulting in very
few distressed properties and forced sales. Home prices
continue to rise in most parts of the country, further
contributing to overall household wealth."
Regionally, the Northeast saw a 2.1% increase in sales
month-over-month to an annual rate of 490,000, up 4.3%
year-over-year. In the Midwest, there was a 2.1% decrease
in sales month-over-month to an annual rate of 940,000,
up 2.2% year-over-year.
The South gained 1.6% in sales month-over-month to an
annual rate of 1.86 million, up 6.9% year-over-year. And
in the West, sales increased 5.5% month-over-month to an
annual rate of 770,000, with no change year-over-year.
See: https://www.nar.realtor/newsroom/nar-existing-home-sales-
report-shows-1-5-increase-in-september
and
https://www.msn.com/en-us/news/other/us-home-sales-
accelerated-in-september-to-their-fastest-pace-since-february-as-
mortgage-rates-eased/ar-AA1P2WM1?ocid=BingNewsVerp
Builder confidence rose in October
Builder confidence index in the US for newly built single-
family homes was 37 in October, up five points from
September and the highest reading since April according
to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
Even as builders continue to grapple with market and
macroeconomic uncertainty, sentiment levels posted a
solid gain in October as future sales expectations
surpassed the 50-point breakeven mark for the first time
since last January.
“While recent declines in mortgage rates are an
encouraging sign for affordability conditions, the market
remains challenging,” said NAHB chairman Buddy
Hughes. “The housing market has some areas with firm
demand, including smaller builders shifting to remodeling
and ongoing solid conditions for the luxury market.
However, most home buyers are still on the sidelines,
waiting for mortgage rates to move lower.”
“The HMI gain in October is a positive signal for 2026 as
our forecast is for single-family housing starts to gain
ground next year,” said NAHB chief economist Robert
Dietz.
See: https://www.nahb.org/news-and-economics/housing-
economics/indices/housing-market-index
and
https://www.nahb.org/
Canadian housing starts jumped 14% in September
Canadian housing starts jumped in September driven by a
surge in construction kicking off in Toronto and Montreal
despite softness in the broader housing market.
Housing starts across Canada came in at a seasonally
adjusted annualised rate of 279,234 units, representing a
14% rise from the month before according to the Canada
Mortgage and Housing Corporation. The market was
expecting roughly 260,000 residential housing projects to
have started for the month.
The increase followed a pullback in starts in August and
helped lift the trend to a rise of 4.1% to 277,147 units last
month, Canada's national housing agency said.
In the country's three largest cities, starts in Montreal and
Toronto more than doubled year on year thanks to a rise in
multi-family units such as condominiums and row houses,
while Vancouver, British Columbia, recorded about a 1%
drop in starts for the month.
Used home sales dropped 1.7% from the month before,
snapping a string of rising sales that began in April, data
released Thursday by the Canadian Real Estate
Association showed. The association anticipates home
sales will slide 1.1% this year as weakness in British
Columbia, Alberta and Ontario markets offset gains
elsewhere in the country. However, it forecasts a rebound
next year, with an expected 7.7% rise in sales for what
would be the highest level of activity since 2021.
See: https://www.cmhc-schl.gc.ca/professionals/housing-
markets-data-and-research/housing-data/data-tables/housing-
market-data/monthly-housing-starts-construction-data-tables
US consumer sentiment steady in October but labour
market worries persist
US consumer sentiment held steady in October though
Americans' concerns about the labor market and inflation
persisted as the government shutdown began.
The University of Michigan's preliminary consumer
sentiment survey for October was little changed from last
month, coming in at 55 as economists polled by LSEG
estimated a more significant decline to 54.2, after the
index had a 55.1 reading for September.
Michigan's Surveys of Consumers said that "wallet issues
like high prices and weakening job prospects remain at the
forefront of consumers' minds," adding that interviews
with respondents showed little evidence the shutdown "has
moved consumers' views of the economy thus far."
Consumers were pessimistic about future personal
finances and their views on current buying conditions for
long-lasting manufactured goods were unfavorable.
Consumers’ five-year outlooks for their household
finances fell to the lowest in over a decade in October.
“It is very clear consumers don’t feel like they’re
thriving,” said Joanne Hsu, the survey’s Director. While
consumers indicate that the prospect of a major financial
calamity remains low, “they expect to continue to not
thrive,” she said. Government funding lapsed on 30
September. Sentiment declined during previous
shutdowns, and economists expect the consumer sentiment
data to be downgraded when the final data is published.
See: https://www.sca.isr.umich.edu/
and
https://www.msn.com/en-us/money/markets/consumer-outlook-
for-household-finances-falls-to-lowest-in-over-a-decade-
survey/ar-AA1OeZxL?ocid=BingNewsVerp
Manufacturing contracts slow in September
Economic activity in the manufacturing sector contracted
in September for the seventh consecutive month following
a two-month expansion preceded by 26 straight months of
contraction, say the nation's supply executives in the latest
ISM® Manufacturing PMI® Report.
The Manufacturing PMI® registered 49.1 % in September,
a 0.4-percentage point increase compared to the reading in
August. A rating below 50% indicates contraction while a
rating over 50% indicates growth.
The five manufacturing industries reporting growth in
September are: Petroleum and Coal Products; Primary
Metals; Textile Mills; Fabricated Metal Products and
Miscellaneous Manufacturing.
The 11 industries reporting contraction in September -in
the following order -are: Wood Products; Apparel, Leather
and Allied Products; Plastics and Rubber Products; Paper
Products; Furniture and Related Products; Chemical
Products; Electrical Equipment, Appliances and
Components; Transportation Equipment; Nonmetallic
Mineral Products; Machinery and Computer and
Electronic Products.
Survey comments from most sectors continue to focus on
the costs, disruptions and uncertainty brought about by
tariffs over the past several months.
See: https://www.ismworld.org/supply-management-news-and-
reports/reports/ism-pmi-reports/
and
https://www.prnewswire.com/news-releases/manufacturing-pmi-
at-49-1-september-2025-ism-manufacturing-pmi-report-
302571530.html
Tariffs have domestic furniture industry on high alert
The government wants to revive the US furniture
manufacturing sector through a series of tariffs on imports
that took effect 14 October. There is now a 10% tariff on
softwood sawnwood and a 25% tariff on kitchen cabinets,
bathroom vanities and upholstered furniture. On 1 January
2026 the tariffs will increase to 50% on cabinets and 30%
on upholstered furniture.
As recently as 1999 North Carolina laid claim to about
80,000 furniture manufacturing jobs. But most of those
jobs have since vanished. North Carolina had just 28,000
furniture jobs as of August, the most recent month federal
data was available. Apart from the pandemic era, furniture
employment is at its lowest level since at least 1990.
North Carolina’s High Point Market, the largest home
furniture trade show in the world, brings together US and
global furniture designers twice a year. CNN and Inc.
Magazine interviewed trade show attendees about their
hopes and fears about the tariffs.
They found that furniture executives worry that this action
by the federal government will do more harm than good to
an industry grappling with notoriously thin profit margins,
a shortage of skilled workers and the impact of tariffs in
other sectors.
Alex Shuford, CEO of 78-year-old Rock House Farm
Furniture, would, in theory, benefit from these levies. But
like others in the industry, Shuford has mixed feelings
about the tariffs. He appreciates the “admirable” desire to
revitalise North Carolina manufacturing but warns of
collateral damage in the interconnected global furniture
ecosystem.
“We’ve got to be really careful that the effort to save us
doesn’t do more damage than good,” Shuford told CNN.
Rock House runs 11 factories that make furniture
domestically, but some of its brands also import furniture
from overseas. Roughly 80% of its sales are from furniture
made in North Carolina, with the rest imported. Shuford
says his company’s tariff bill in 2024 was US$300,000,
but that this year’s will be well over US$3 million. “Next
year, if this continues, we’ll be pushing US$6 or US$7
million,” he said.
John Hart, who runs Lewisville, Texas-based design
company Arteriors and imports 97% of the furniture he
sells has been looking to move his operations out of
Southeast Asia. The region has been hit hard by US
reciprocal tariffs and he says he’s looked at other regions
that have more favorable trade relationships with the US.
But navigating that switch to other countries means
dealing with a new set of rules and regulations.
Even among the furniture executives who believe US
tariffs could help restore some jobs, they’re skeptical
about a significantc revival.
“We’re not going back to the heyday of the 1990s. But we
will get more expensive furniture,” said David Johnston,
vice president of the Furniture Manufacturers Credit
Association.
See:https://edition.cnn.com/2025/10/14/business/jobs-furniture-
prices-north-carolina-trump
and
https://www.msn.com/en-us/money/smallbusiness/furniture-
tariffs-why-business-owners-in-north-carolina-are-bracing-for-a-
rough-ride/ar-AA1OFcIM?ocid=BingNewsVerp
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