Fresh MetalCrawler news today on the US housing market, China’s attempt to restructure its economy, and a short-term fix to fund the Highway Trust Fund.
US Housing Starts Disappoint
The economy stumbled at the start of the year under the weight of a harsh winter and a resurgent dollar. US housing starts rose far less than expected in March and factory activity in the mid-Atlantic region grew modestly this month, suggesting the economy could struggle to rebound from a soft patch hit in the first quarter.
There are expectations growth will rebound in the second quarter, but Thursday’s lukewarm data suggest the momentum will probably not be strong enough for the Federal Reserve to start raising interest rates before September.
Controlling The Chinese Slowdown
Beijing’s efforts to wrestle China’s growth model from its investment and credit-fueled addiction to a more sustainable long-term footing, as well as to clean up the environmental damage wrought by decades of industrial pollution, is predictably slowing growth there. The difficult task for Chinese leaders will be to control the slowdown of the world’s second-largest economy among calls for stimulus and government help.
In an economy squeezed by a housing slump and industrial overcapacity, consensus is building that Chinese steel production has peaked, and will decline steadily over the next decade.
Paul, Boxer Propose Repatriation Tax to Fund Construction
Sen. Rand Paul (R – Ky.), a Republican presidential candidate, is teaming up with Democratic Sen. Barbara Boxer (D – Calif.) on legislation to tax up to $2 trillion in corporate revenue currently stored in foreign banks to pay for domestic infrastructure projects.
The measure would offer companies a 6.5% tax rate on profits they return voluntarily to the US, known as repatriation, to boost federal transportation funding. The Highway Trust Fund is currently scheduled to run out of funding in May.