Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Retail sales for June and near-term employment activity offered encouraging news last week, but new homes construction disappointed real estate market watchers.
Retail Sales
Retail and food services sales for June grew by 0.2 percent to reach $439.9 billion, the Census Bureau reported last week. To give an annual comparison, this was 4.3 percent higher than June 2013.
Some key growth categories include general merchandise stores, which grew by 1.1 percent; health and personal care stores, which posed a 0.9 percent gain; clothing and accessory stores, which gained 0.8 percent; and sporting goods, hobby, book and music stores, which were up 0.6 percent.
June’s core retail sales figure, which strips out cars, gasoline, building materials and food services, grew by 0.6 percent last month. June’s core retail growth was noteworthy, because spending in the remaining retail categories is what helps fuel growth in the consumer sector.
“This is not a fragile economy,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ, told the Reuters news service. “The consumer continues to play their part in moving the economy forward.”
Housing Starts
Housing starts dropped to their lowest level in nine months. Construction permits issued for private housing in June dropped 4.2 percent to an annual rate of 963,000, according to last week’s report from the Census Bureau. Meanwhile, permits issue for single-family home constructions grew by 2.6 percent to reach a rate of 631,000.
Starts on construction of private homes for the month took a heavy drop of 9.3 percent to a rate of 893,000, and starts on single-family homes correspondingly dropped 9 percent to hit an annual rate of 575,000.
Completed constructions of private housing in June dropped a sizable 12 percent to an annual rate of 789,000. Completions of single-family homes fell 6.5 percent to an annual rate of 586,000.
Needless to say, for a real estate market that experts have been saying is in need of inventory in order to see volume growth, June’s weak housing starts are not an encouraging sign.
"This was a hugely disappointing report, especially in light of the substantial increase in new home sales during May, a pick-up in homebuilder confidence to a six-month high, and mortgage rates that have recently tracked lower," TD Economics senior economist Michael Dolega told USA Today. Dolega added he expects a turnaround in coming months as the jobs front continues to improve.
Initial Jobless Claims
First-time claims for unemployment benefits filed by the recently unemployed continued to drop, keeping new claims at their lowest level since 2007. Initial jobless claims filed during the week ending July 12 dropped to 302,000, a 3,000-claim drop from the previous week's revised level of 305,000, the Employment and Training Administration Reported.
Similarly, the four-week moving average, which is considered a more stable measure of recent jobless scores, dipped to 309,000, a decline of 3,000 claims from the previous week’s revised average of 312,000. This is the lowest level for the four-week moving average since June 2, 2007, when it dropped to 307,500.
“The declining trend in claims is very encouraging, and is further evidence that the strong payrolls number we saw for June is not a fluke,” Moody’s Analytics Inc. senior economist Ryan Sweet told the Bloomberg news service. “The labor market is gaining momentum. This is consistent with strong gains in consumer spending.”
This week, we can expect:
- Tuesday — Consumer price index for June from the Bureau of Labor Statistics; existing home sales for June from the National Association of Realtors.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; June new home sales from the Census Bureau.
Economic News in Review Greenville SC
Have a Big day,
Randy
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