Economic Update - Re-Cap in Plain English ~ 09/21/2009

Last Week in the News

The Commerce Department reported that the combined construction of new single-family homes and apartments in August increased 1.5% to a seasonally adjusted annual rate of 598,000 units. This follows a 1% decline in July and a 6.5% increase in June.

According to the ICSC-Goldman Sachs index, retail sales were flat in the week ending September 12. However on a year-over-year basis, retailers saw sales increase by 1.6%, the best showing in a year.

The producer price index, which tracks wholesale prices, rose 1.7% in August, following a 0.9% decrease in July. The increase in August was largely due to a 23% surge in gasoline prices.

Retail sales increased 2.7% in August following a revised 0.2% decrease in July. It was the largest gain since January 2006. Economists had expected retail sales to rise 2% in August.

Industrial production at the nation’s factories, mines and utilities rose 0.8% in August following an upwardly revised 1% increase in July. It was the biggest back-to-back gain since 2005. The overall factory-operating rate rose to 69.6% of capacity in August, the highest level since February.

The Labor Department reported consumer prices rose 0.4% in August. For the year, consumer prices are down 1.5%.

The National Association of Home Builders / Wells Fargo housing market index rose one point in September to 19. It was the highest level since May 2008. An index reading below 50 indicates negative sentiment about the housing market.

Initial claims for unemployment benefits fell by 12,000 to 545,000 in the week ending September 12. The figure was lower than the 557,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending September 5 rose by 129,000 to 6.23 million.

Upcoming on the economic calendar are reports on the index of leading economic indicators on September 21, existing home sales on September 24 and new home sales on September 25.