Economic Nuggets – August 31, 2012
Economic nuggets from the past two weeks/' news headlines and industry publications.
Here are some economic nuggets from the past two weeks’ news headlines and industry publications.
- July total commercial construction spending: $834.4 billion at a seasonally adjusted annual rate (SAAR), down 0.9% from June; but up 9.3% year-to-date compared to the same period last year. Major categories include:
- Nonresidential construction spending: $298.8 billion, down 0.7% from June; year-to-date up 8.4% from the same period last year
- Heavy engineering construction spending: $264.3 billion, down 0.6% from June; year-to-date up 10.7% from the same period last year
- New residential construction spending: $155.4 billion, up 1.5% from June; year-to-date up 13.9% from the same period last year
- The Bureau of Economic Analysis (BEA) revised second quarter real (inflation-adjusted) gross domestic product (GDP) growth from the previously reported 1.5% (SAAR) to 1.7%. After the revision, growth was still down from first quarter’s 2.0% rate
The revisions include an increase in the rate of growth of the following:
- Investment in structures - 0.9% (SAAR) to 2.8%
- Personal consumption expenditures - 1.5% to 1.7% (the consumer is still with us, but is cautious)
- Exports - 5.3% to 6.0% (the rest of the world continues to grow and demand U.S. products)
- Single-family housing starts fell in July to 502,000 (SAAR) from 537,000 in June. That marked the fourth consecutive month of 500,000+ single-family starts. On the positive side, single-family housing permits rose 4.1% in July, their fourth consecutive monthly increase.
- New single-family home sales rebounded 3.6% in July to 372,000 (SAAR) from June’s 359,000 (revised up from 350,000). Also, July sales were 25.9% higher than last year.
- The inventory of new single-family homes for sale was at a record low 142,000. Any increase in demand for new homes will have to be met with additional new construction.
- The 10-city and 20-city June S&P/Case-Shiller® Home Price indexes advanced for the fifth consecutive month, up 1.0% and 0.9%, respectively, on a seasonally adjusted (SA) basis. Also, both were up on a year-over-year basis, 0.1% and 0.5%, respectively. The quarterly national index rose 2.2% (SA) for the second quarter in a row and was up 1.2% from second quarter 2011. Rising home prices should give potential buyers more confidence to make a home purchase and lenders a greater willingness to extend loans to both buyers and builders.
- The August NAHB/Wells Fargo Housing Market Index (HMI) was up 2 points to 37 after jumping 6 points in July. The August reading is the highest the index has been since February 2007, indicating that homebuilders are increasingly confident that the single-family housing market is improving. Typically, within one to two months after the HMI rises, single-family housing starts increase.
- Multifamily housing starts increased 12.4% for the second month in a row to 244,000 (SAAR) from 217,000 in June. Given the volatility of the measure, the 3-month moving average provides a better picture of new activity. The average rose slightly from June, up 0.2% to 218,000.
- July’s 3-month moving average of 287,000 multifamily building permits, a 6.3% rebound from June’s 4.0% decline, was its highest average since September 2008.
- The AIA Billings Index leapt up almost 3 points to 48.7 from 45.9 in June, its second monthly improvement. Nonetheless, this leaves the index below 50, indicating decreased billings.
- The July Producer Price Index (PPI) for finished goods rose 0.3% (SA) following a 0.1% increase in June and was up a modest 0.5% from July 2011.
- An index that measures inputs used in nonresidential construction (excluding capital equipment) fell 0.9% on a not seasonally adjusted (NSA) basis, its third consecutive monthly decline. On a year-over-year basis, the index was down 1.2%. This is likely to be a temporary respite in building materials costs as energy prices have moved up and steel prices have jumped in recent weeks.
- The July Consumer Price Index (CPI) was flat for the second month in a row and was up 1.4% from July 2011. The core CPI, which excludes food and energy prices, was up 0.1% for the month and 2.1% from a year earlier.
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