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U.S. NEWS A7
Tuesday 1 March 2016
US Financial Front:
Buffett says US economy weaker than he expected but growing
JOSH FUNK who are paying a lot less Berkshire Hathaway Chairman and CEO Warren Buffett smiles at a shareholders meeting in Oma-
AP Business Writer for the crude they turn ha, Neb. Buffett says the U.S. economy appears weaker than he expected last fall, but that doesn’t
OMAHA, Neb. (AP) — Bil- into gasoline and other fu- change his optimistic long-term view. Buffett appeared on CNBC Monday, Feb. 29, 2016 after re-
lionaire Warren Buffett said els, can turn a huge profit leasing his letter to Berkshire Hathaway shareholders over the weekend.
the U.S. economy appears when oil prices fall.
weaker than he thought But one of Berkshire Hatha- (AP Photo/Nati Harnik)
it would be as recently as way’s operations has been
last fall, but that doesn’t damaged by those plung- cans are seeing at the gas dict how the current era of more borrowing.
change his optimistic long- ing prices. pump. low interest rates will affect He said Berkshire has to
term view of the country’s Because gas prices are Auto insurance rates, Buf- the economy because it keep billions of euros in
prospects. so low, people are driving fett said, are going up this has never happened be- banks in Europe, and the
Buffett appeared on CNBC more, and the number of year. fore, but they could dis- low rates could have a
Monday and addressed a vehicle accidents spiked. Buffett said he can’t pre- tort prices and encourage negative effect there.
variety of topics after re- The National Safety Coun-
leasing his annual letter to cil recently estimated the
Berkshire Hathaway share- number of traffic deaths
holders over the weekend. in the United States rose 8
The more than 90 compa- percent from 2014 to 2015,
nies owned by Berkshire the largest year-to-year
give Buffett a complex and percentage increase in a
detailed view of how the half-century.
economy is affecting dif- Underwriting profits at
ferent U.S. sectors. auto insurer Geico, which
“Business is a little softer in is owned by the conglom-
many places than I antici- erate, plunged from $1.16
pated four or five months billion in 2014, to just $460
ago. That doesn’t mean million last year.
it’s in reverse,” said Buffett, In addition to the millions of
who is Berkshire’s chairman additional road miles that
and CEO. The economy are being logged, Buffett
continues growing slowly, said distracted drivers are
and Buffett is confident the as serious problem.
U.S. economy will improve And that could offset
over time, but plunging oil some of the savings Ameri-
prices have had a signifi-
cant impact. US pending home sales decline in January
Thousands of jobs have
been lost in the oil indus- WASHINGTON (AP) — West. Prospective sales im- the inventory of homes The Standard & Poor’s/
try, the budgets and local Fewer Americans signed proved slightly in the South. would be exhausted in Case-Shiller 20-city home
economies of producing contracts to buy homes in But a shortage of listings four months. A balanced price index advanced 5.7
states have come under January, as the recent hot has weighed down the po- market usually contains six percent in December from
severe pressure and en- streak appears to have tential for sales increases months’ supply. a year earlier. Average
ergy companies have had been curbed by a short- akin to last year’s increase. The slowdown in the num- hourly earnings increased
billions shaved from their age of properties for sale Steady job growth and low ber of signed contracts just 2.5 percent from a year
market value. Yet Buffett and colder weather. mortgage rates have bol- indicates that the limited ago to $25.39, the govern-
said that the benefit for the The National Association stered demand for hous- selection may be push- ment reported in early Feb-
vast majority of Americans of Realtors said that its sea- ing from the recent lows ing more would-be buyers ruary.
trickles in slowly every time sonally adjusted pending caused by the Great Re- onto the sidelines. Pending Offsetting some of the price
they fill up their gas tanks. home sales index fell 2.5 cession. Yet the greater de- sales are a barometer of fu- pressures are mortgage
“The country will grow in percent to 106 in January. mand largely failed to bring ture purchases. A lag of a rates near historic lows.
value over time,” he said. The decline comes after more properties onto the month or two usually exists Mortgage buyer Freddie
Over the past six months, the sales index averaged market. The number of list- between a contract and a Mac said the average rate
Berkshire has built up a 14 108.9 in 2015, its highest lev- ings on the market in Janu- completed sale. on a 30-year, fixed-rate
percent stake in oil refiner el since 2006. ary fell 2.2 percent from a The tight inventories have mortgage was 3.62 per-
Phillips 66. Buffett said it’s The number of signed con- year ago, the Realtors said fueled price growth that cent last week, below its
wrong to think of that in- tracts decreased in the in a report last week. has tended to be more 3.80 percent mark a year
vestment as a bet on oil Northeast, Midwest and At the current sales rate, than double wage gains. ago.
prices because refiners,
