ECONOMIC NUGGETS – October 1, 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.
- The Bureau of Economic Analysis (BEA) revised down its estimate of second quarter real (inflation-adjusted) gross domestic product (GDP) growth to 1.3% at a seasonally adjusted annual rate (SAAR) from the previously reported 1.7%. Part of the downward revision was due to the effects of the drought on the economy, which should prove to be a temporary drag on growth. The downward revision in nonresidential construction spending was another factor in the slower growth estimate.
- August total commercial construction spending fell for the second month in a row, down 0.6% to $837.1 billion (SAAR), although year-to-date not seasonally adjusted (NSA) spending was still up 9.0% over last year. The August spending numbers include the following movements:
- Nonresidential construction spending declined 1.2% to $296.4 billion, but rose 7.3% year-to-date from last year
- Heavy engineering construction spending dropped 1.4% to $260.8 billion, but was 9.5% higher on a year-to-date from the same period in 2011
- New residential construction spending jumped 2.9% to $160.0 billion and increased 14.8% on a year-to-date basis from last year
- Single-family housing starts increased 5.5% in August to 535,000 (SAAR) from 507,000 in July. There have now been five consecutive months of single-family starts in excess of 500,000. Meanwhile, single-family housing permits were unchanged from July, but were up 20.3% from last year on a year-to-date (NSA) basis.
- New single-family home sales slipped a bit, down 0.3% to 373,000 (SAAR) after increasing 3.6% in July to 374,000, but were up 22.5% on a year-to-date (NSA) basis from last year.
- The inventory of new single-family homes for sale remained at their record low of 141,000 for the second month in a row. Given the low level, builders will respond to higher demand with new construction.
- The 10-city and 20-city July S&P/Case-Shiller® Home Price indexes increased for the sixth month in a row, both rising 0.4% on a seasonally adjusted (SA) basis. On a year-over-year (NSA) basis, the 10-city index rose 0.6% and the 20-city index 1.2%. The upward movement in home prices is a positive for home buyers, home sellers, builders, lenders—and the economy.
- The September NAHB/Wells Fargo Housing Market Index (HMI) increased 3 points to 40, its fifth consecutive monthly increase. The September index is the highest it has been since June 2006, a major sign that builders are more positive in their outlook for the new single-family home market. Higher HMI readings usually precede a rise in single-family housing starts by one or two months.
- August multifamily housing starts fell 4.9% to 215,000 (SAAR) after increasing 4.1% to 226,000 in July. The 3-month moving average, a better take on this volatile measure, rose 3.5% to 219,000. Year-to-date (NSA), starts were up 36.8%.
- The August 3-month moving average for multifamily building permits slipped 0.3% to 287,000 from July’s 288,000. Year-to-date (NSA), permits were up 41.6%.
- The AIA Billings Index continued its recent upward movement, rising to 50.2 from July’s 48.7, the first time the index has been above 50 since March. A reading above 50 indicates increased billings.
- The August Producer Price Index (PPI) for finished goods shot up 1.7% (SA) due to higher energy prices after increasing a more modest 0.3% in July and was 2.0% (NSA) higher than August 2011.
- A price index for inputs used in nonresidential construction (excluding capital equipment) increased 1.0% on a not seasonally adjusted (NSA) basis in August after falling 0.9% the previous month. On a year-over-year basis, the index was up a modest 0.7%. Higher energy prices will keep upward pressure on building materials prices in the near term.
- The August Consumer Price Index (CPI) rose 0.6% after no change the previous two months and was up 1.7% (NSA) from a year earlier. The core CPI (which excludes food and energy prices) inched up 0.1% for the second month in a row and was up 1.9% (NSA) from August 2011.
To comment, login here
Or register to be able to comment.