Economic Nuggets – May 31, 2012
Economic nuggets from the past two weeks headlines and industry publications.
Here are some economic nuggets from the past two week’s news headlines and industry publications.
- The second estimate of the first quarter real (adjusted for inflation) gross domestic product (GDP) growth was revised down to 1.9% growth at a seasonally adjusted annual rate (SAAR) from 2.2% in April’s preliminary report. Investment in nonresidential structures fell 3.3%, but that was better than the originally estimated drop of 12.0%. As a result of this decline, nonresidential structures subtracted 0.1% from real GDP growth.
- Signs are accumulating that single-family housing is finally on a modest upward trajectory. Single-family housing starts rose in April, up 2.3% to 492,000 (SAAR) from March’s 481,000, which was revised up from the previously reported 462,000. Single-family building permits also increased, up 1.9% to 475,000 from March’s 466,000.
- April new single-family home sales rose 3.3% to 343,000 from March’s 332,000.
- The April inventory of new homes for sale at 146,000 remained near the previous month’s record low of 144,000. As a result, any uptick in demand will quickly translate into more construction activity.
- The May NAHB/Well Fargo Housing Market Index (HMI) increased to 29, its highest reading since May 2007, from March’s 24.
- Multifamily construction starts rose 3.2% to 225,000 (SAAR) from 218,000 in March. Given the notorious volatility of the measure, the 3-month moving average provides a better picture of new activity. The average was up 2.4% in April to 230,000, its highest reading since November 2008.
- March’s 3-month moving average of multifamily building permits of 257,000 was their highest reading since October 2008.
- One troubling sign is that the April AIA Billings Index fell below 50 to 48.4 from March’s 50.4 and its second consecutive monthly decline. A reading below 50 indicates decreased billings.
- The April Producer Price Index (PPI) for building materials prices (does not include labor costs) rose 0.3% after increasing 0.2% in March and was up 2.9% from April 2011. Meanwhile, an index of prices for inputs to nonresidential construction was flat after jumping 1.6% in March. On a year-over-year basis, the index was up 2.4% for April.
- General inflation as measured by the Consumer Price Index (CPI) was up 2.3% in April on a year-over-year basis and core inflation (the CPI minus energy and food prices) was also up 2.3% for the same period. With energy prices dropping, CPI inflation should moderate over the next few months.
- Industrial production was up 1.1% in April after dropping 0.6% in March, and increased 5.1% from April 2011.
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