NEW YORK, NY--(Marketwire - Mar 7, 2013) - The U.S. housing market has continued to rebound. The recovery in the housing market is being driven by record low mortgage rates and huge pent-up demand. As the housing market continues to recover, appliances companies makers such as Whirlpool Corporation (
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The housing market has been rebounding since last year. The housing market has benefited from the Federal Reserve's aggressive bond buying program, which was launched in September last year. Under the program, called QE3, the Fed has been buying $40 billion in mortgage backed securities every month and will continue to do so until there is a sustained recovery in the housing market.
The Fed's aggressive monetary measures have helped in bringing down mortgage rates, which are now at record low levels. With mortgage rates expected to remain at record low levels and huge pent-up demand, the recovery in the housing market is expected to continue in 2013. For appliances makers, this is excellent news as they will directly benefit from this trend.
The Dow Jones, on Wednesday, finished at yet another record high. All three benchmark indexes in the U.S. are up sharply for the year. Rising stock market is likely to boost confidence among U.S. consumers. Consumer confidence has also been boosted by ongoing improvement in the labor market. A report released by Automatic Data Processing yesterday showed that the private sector in the U.S. added 198,000 jobs last month. As consumer confidence continues to rise, it should boost spending, benefiting companies such as Whirlpool Corporation and iRobot Corporation.
While the U.S. economy is continuing to recover, the outlook for the global economy has also improved significantly, thanks mainly to China. Growth in the world's second largest economy is picking up pace. In addition, China is shifting focus from exports and investments to consumer spending to drive growth. This shift is likely to boost demand for consumer goods in the world's fastest growing major economy.
Whirlpool Corp. reported its financial results for the fourth quarter of 2012 in January. The company reported GAAP net earnings of $122 million, or $1.52 per share for the quarter on revenue of $4.8 billion.
Jeff M. Fettig, Chairman and CEO of Whirlpool Corporation, said that the company's actions have clearly produced the expected improvement in operating margins, resulting in strong earnings per share and underlying cash flow. Fettig noted that the initiatives taken by the company, combined with improving trends in U.S. housing and growth opportunities in emerging markets, create positive momentum going into 2013.
iRobot Corp. last month reported fourth quarter revenue of $100.7 million. The company's revenue for the full year 2012 was $436.2 million.
Colin Angle, Chairman and CEO of iRobot Corporation, said that the company's Home Robot business had a phenomenal year with revenue increasing 28% over 2011, however, as expected, the decline in Defense & Security revenue resulted in lower total company revenue and profit for the year.
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