Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
New home construction showed indications that housing inventory is coming out of its late-summer doldrums, and initial jobless claims plummeted to a 14-year low, while retail sales shrank slightly.
Construction of new homes returned a solid performance in September and in many aspects outpaced the same period a year ago. Permits for the construction of private homes issued in September grew 1.5 percent over August to hit an annual rate of 1,018,000, the Census Bureau reported last week. Meanwhile, permits issued for construction of single-family homes ticked down 0.5 percent to hit an annual rate of 624,000.
Starts on construction of private housing enjoyed a 6.3 percent jump to an annual rate of 1,017,000, which was a solid 17.8 percent higher than September 2013’s rate of 863,000. Starts on single-family homes grew 1.1 percent to a rate of 646,000.
Completions of housing constructions popped up 8.6 percent to an annual rate of 999,000, which was a whopping 31.3 percent over September 2013’s rate. Completions on single-family homes notched up 1 percent to a rate of 624,000. This difference between overall housing construction performance and single-family homes in specific gave some real estate watchers reason to be guarded in their assessment of the Bureau’s report.
“In the wake of the considerable volatility seen in the financial markets this week, the immediate reaction to the September construction data was a large sigh of relief,” wrote Richard Moody, chief economist of Regions Financial. “The details of the construction data, however, don’t make us feel any more positive about the single-family segment of the housing market, which continues to plod along at a frustratingly slow pace.”
Initial Jobless Claims
Initial jobless claims cascaded to their lowest point in 14 years, with first-time claims for jobless benefits filed by the newly unemployed during the week ending Oct. 11, nose-diving to 264,000, a drop of 23,000 claims from the previous week’s total of 287,000, the Employment and Training Administration reported last week.
This marked the lowest point for initial jobless claims since April 15, 2000’s total of 259,000 claims. Even with a healthy dose of skepticism, the numbers were still solid, according to Pantheon Macroeconomics’ chief economist Ian Shepherdson.
“In one word: Spectacular,” Shepherdson wrote. “Whether claims can be sustained at such a low level — an all-time low, as a share of payroll employment — is debatable, given that the prior trend was about 295,000, but this is a clear signal of real strength in the labor market.”
The four-week moving average, considered a more dependable measure of new jobless claims, dropped to 283,500, a decrease of 4,250 claims from the previous week’s average of 287,750. This marked the lowest level for this average since June 10, 2000 when it was 283,500.
Retail sales for September were off, with retail and food services transactions ticking down 0.3 percent to $442.7 billion, according to last week’s report from the Census Bureau. That said, September’s performance was still 4.5 percent higher than September 2013’s showing,
Looking at retail categories, the one strong performer was electronics and appliances stores, which posted a 3.4 percent gain for September. Health and personal care stores also showed a slight gain of 0.3 percent; food services and drinking establishments notched up 0.6 percent; and general merchandise stores grew 0.2 percent.
Meanwhile, all other categories were down. Some of the largest drops were clothing and accessory store sales, which fell 1.2 percent; building material and garden stores, which dropped 1.1. percent; gas stations, which shrank 0.8 percent; and motor vehicle and parts dealers, which also fell 0.8 percent.
For anyone watching consumer spending, September’s numbers gave reason for guarded concern, but one month does not make a trend. The key for better cash register receipts in the future will be better paychecks, according to RBS Securities Inc. U.S. economist Omair Sharif.
“The fact that real wages and salaries haven’t picked up that dramatically, it puts a ceiling on how much spending can accelerate,” Sharif told Bloomberg. “It seems like relatively widespread softness in spending. The pickup in consumption that we’re all waiting for hasn’t quite taken off yet.”
This week, we can expect:
- Tuesday — Existing home sales for September from the National Association of Realtors
- Wednesday — The consumer price index for September from the Bureau of Labor Statistics.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; leading economic indicators for September from The Conference Board.
Friday — New home sales for September from the Census Bureau.
Economic News in Review Greenville SC
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