Iin: P o r u
a n i )
O bserver » A
ugust
14, 1996
P age A 5
anh
bseruer
Slow U.S. growth causes housing decline
B\
R[( II
M i l I EK
A senior Federal Reserve policy
maker said Tuesday he saw signs the
economy may be slowing from its
hectic second quarter pace, but add
ed that the central bank needed to be
vigilant because risks remained.
“We have to be on our guard," Fed
Gov. Edward Kelley said in an inter
view. “The upside risks are certainly
there, coming o ff a stiong second
quarter."
The central bank is hoping that the
economy will slow to a more sustain
able rate o f growth in the months
ahead in order to keep inflation in
check and thus extend the expansion.
The economy grew at a 4.2 per
cent annualized pace in the second
quarter — its fastest rate in two years.
“W e’re obviously coming out o f
the second quarter with very strong
momentum,” Kelley said. “ It may,
repeat, may be that we are seeing a
slowing that could relieve some o f
that upside pressure,” he added.
Housing sales slipped in June.
Automobile sales were down in July.
Retail sales have a “soft tone" and
construction seems to be slow ing after
an Olympics-driven surge, Kelley
said.
Stock and bond markets raced
ahead last week as investors bet that
a spate o f statistics showing slowing
growth would convince the Fed not
to raise interest rates at its next pol
icy-making meeting on Aug. 20.
But Kelley's remarks suggest that
he has yet to make up his mind about
whether a rate increase will be need
ed.
“I’m workingon it," he said, when
asked if short-term interest rates were
at an appropriate level given the state
o f the economy.
After cutting rates by a quarter
percentage point in January. the cen
tral bank has held monetary policy
steady as growth first waned, then
waxed.
The Fed has not raised the federal
funds rate
the rate that commer
cial banks charge each other for over-
night loans
since February 1995.
Ihe rate now stands at 5.25 percent.
Kelley said that the performance
o f inflation to-date had been “very
favourable," and added that he did
not see any signs it was about to
break out higher.
After stripping out volatile food
and energy prices, consumer prices
rose at a year-on-year rate o f 2.7
percent in June.
I he Fed governor said the central
bank will closely scrutinise upcom
ing producerand consumerprice data
for July for any signs that inflation
ary pressures are building up.
“We do see pressures in things
like labour markets,” he said. "In
other areas, there has not yet been an
emergence o f pressures. Commodity
markets generally have been benign.”
Kelley called the labour market
"the most obvious area o f potential
concern” about inflation.
I f companies start bidding up wag
es in order to attract employees, that
could lead to higher inflation if it is
not matched by increased worker
Thinking of
Buying A House?
We Offer
Free Prequallflcatlon
Purchases/Reflnances/2nds
Humanity housing project goes international
Honeywell employees will volun
teer their time, talent and energy to
build a Honeywell-sponsored house
during the first ever Jimmy Carter
Work Week to be held in Europe.
The Habitat for Humanity project
takes place the week o f August 12
when 20 Honeywell employees come
together from around the world to
work on one o f 10 single-family
homes being built in Vac, Hungary,
near Budapest.
“ We are proud to be associated
with the Habitat for Humanity orga
nization and its important mission to
provide housing in partnership with
people in need all over the world,”
sa id M ich ael R. B o n sig n o re ,
Honeywell chairman and chief exec
utive officer. “ We are especially ex
cited about being a major participant
this year in the first Habitat Jimmy
Carter Work Week to be held in
Europe. Honeywell’s involvement in
this event is a great opportunity to
demonstrate our commitment to com
munity service, to showcase one o f
Honeywell’s finest products, and to
emphasize Honeywell’s internation-
al leadership.”
The homes in the Vac build have
been designed by Hungarian archi
tects working with the local Habitat
for Humanity affiliate.
The houses will combine H abi
ta t’s philosophy o f simple, decent
houses with design elements that
make them distinctly Hungarian.
They will contain energy-saving
programmable Honeywell thermo
stats that can help the homeowners
save energy and lower their utility
bills.
The employees participating in the
build have w orked on previous
Honeywell Habitat projects and have
a history o f volunteering. An interna
tional effort, the build team consists
o f fifteen employees from through
out North America and five Europe
an-based employees.
Honeywell has a long-standing
relationship with Habitat, being the
first and only corporate sponsor to
provide product for every new Hab
itat-built home in North America and
Europe last year. In 1996, Honeywell
has continued to expand its partner-
LISCENSED IN OREGON SINCE 1975
Singles & Seniors, I can help you!
‘‘1st Class Guarantee”
A-ZEBRA
IB RM
LS ©
Realty Inc.
300 NE Multnomah, Suite #27
Portland, Oregon 97232
George A. Hendrix
MBA, GRI, Broker
(503) 230-1390 • (Res.) 287-6837
Northwest Color
Construction & Painting Company
John McVeety 282-9233
□ Quality Home
Remodeling
□ No Project Too Small
□ Finish Carpentry &
Woodworking
□ Senior Discounts
□ Storm Windows &
Doors Installed
□ Interior & Exterior
Painting
□ Pressure Washing
□ FREE Written estimates
Warm your home now with an
efficient gas furnace from Rheem ™
“ I f it works like a dream
it works like a Rheem. ”™
"iOT Cal! today for free consultation.
License # CCB-81322
B onded & Insured
PURHA^J
C O N S T R U C T IO N
DEVELOPM ENT
EDWARD T. DURHAM. JR.
(503) 319-0821
FAX 283-2977
317 B. N.E. KILLINGSWORTH PORTLAND, OREGON 9721 I
ship with Habitat for Humanity. I he
company has fully sponsored and
Honeywell employees have teamed
up with homeowners to build indi
vidual homes in Atlanta, Phoenix,
Albuquerque and Vac, Hungary, and
cooperatively sponsored homes in
Minneapolis.
I he Habitat sponsorship reflects
Honeywell’s commitment to be a
good corporate citizen and support
non-profit organizations in commu
nities where it has major operations.
In 1995, Honeywell contributions
totaled more than $9 million.
Habitat for I lumanity Internation
al is a non-profit organization dedi
cated to building affordable housing
with people in need throughout the
world. Funds, building materials and
labor are donated by individuals,
churches, corporations and other or
ganizations who share Habitat’s goal
o f eliminating substandard housing
in the world.
Honeywell Inc. is a global con
trols company focused on creating
value through control technology that
enhances comfort, improves produc
tivity, saves energy, protects the en
vironment and increases safety.
The company serves customers
worldwide in the homes and build
ings, industrial, and aviation and
space markets.
Honeywell employs 53,000 peo
ple in 95 countries and had 1995
sales o f $6.7 billion.
productivity
Non-farm payrolls expanded by
193,000 last month Although that
growth was somewhat slower than
the previous month’s 220,000, it still
was what Kelley termed a “strong
number.”
“It is clear that the labor market is
becoming tighter and tighter,” he said.
Conventlonal/FHA/VA Loans
Debt Consolldatlon/Credlt Lines
203(k) Rehab Loans
New Construction Loans
In-House Processing
Mark Tomlin
In-Housing Underwriting
ÌM ortgage O ne
The Largest Mortgage Broker In Oregon
and Southwest Washington
CALL MARK AT
1 -800-746-4184