OMAHA—Omaha billionaire Warren Buffett says the economy continues growing although the rate of improvement has slowed.

From inside Nebraska Furniture Mart, Buffett told CNBC that the reports he gets from Berkshire Hathaway’s assorted businesses haven’t suggested the economy flattening out.

But Buffett says the slow pace of home construction remains puzzling because he expected more renters would be buying their first homes by now – a decade after the recession.  Buffett says inflation is clearly increasing, but he hasn’t seen anything alarming at this stage.

Buffett says part of why his Berkshire Hathaway conglomerate didn’t buy many stocks in the fourth quarter is that he was considering a major acquisition that fell through.  Buffett said he was considering a deal late last year that didn’t happen.

Some investors questioned why Berkshire didn’t buy more stocks given that it is holding roughly $130 billion in cash and other short-term investments.

Berkshire Hathaway’s businesses have already seen some impact from the U.S. trade dispute with China.

Buffett said the tariffs have the effect of pushing up prices, but so far some of the 10 percent tariffs imposed on Chinese goods have been absorbed by businesses.

Buffett says if tariffs are increased to 25 percent, that would likely have a significant impact on prices and more businesses may decide to change suppliers.  He adds the best thing would be for the United States and China to reach a sensible agreement that both countries can live with.

China’s stock market surged Monday after President Donald Trump postponed a tariff hike on Chinese imports.