Implications: The recovery in home building continues. The big news in today's report was that permits to build homes rose 6.8% in July to 812,000 units at an annual rate, the highest level since August 2008. The gain was due to increases in both single- and multi-family permits, which, as the chart to the right shows, are both trending upward. Although housing starts fell 1.1% in July to a 746,000 annual rate, they remain near the highest levels since late 2008 and are up 21.5% from a year ago. The upward trend in housing starts will soon reassert itself. The total number of homes under construction (started, but not yet finished) increased for the 11th straight month, the first time this has happened since back during the building boom in 2003-2004. Based on population growth and "scrappage," housing starts will eventually rise to about 1.5 million units per year (probably by 2016), which means the recovery in home building is still very young. In other news this morning, new claims for jobless benefits increased 2,000 last week to 366,000. Continuing claims for regular state benefits fell 31,000 to 3.31 million. These figures are consistent with continued moderate payroll growth in August. On the manufacturing front, the Philadelphia Fed Survey, which measures activity at factories in that region, rose to a still negative -7.1 in August from -12.9 in July. Surveys of manufacturers seem to have been held down recently by negative sentiment more than actual economic activity.
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Posted on Thursday, August 16, 2012 @ 10:29 AM
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