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Economic Nuggets – May 31, 2012

Here are some economic nuggets from the past two week’s news headlines and industry publications.

     
  1. 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.
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  3. 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.
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  5. April new single-family home sales rose 3.3% to 343,000 from March’s 332,000.
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  7. 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.
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  9. The May NAHB/Well Fargo Housing Market Index (HMI) increased to 29, its highest reading since May 2007, from March’s 24.
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  11. 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.
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  13. March’s 3-month moving average of multifamily building permits of 257,000 was their highest reading since October 2008.
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  15. 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.
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  17. 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.
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  19. 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.
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  21. 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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