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Jan. 20, 2014

Economy Watch: Housing Starts Drop in December, Gain for ’13

By Dees Stribling, Contributing Editor

The Census Bureau reported on Friday that U.S. housing starts were at an annualized rate of 999,000 units, a drop of 9.8 percent from the November rate, which was 1.107 million units. The December 2013 rate was, however, 1.6 percent higher than in December 2012.

Single-family housing starts in December came in at an annualized rate of 667,000, which is 7 percent below the revised November figure of 717,000. Multifamily starts, which tend to bounce around more than single-family starts, were also down for the month (by 17.9 percent) and the year (by 9.6 percent).

For the entire year of 2013, housing starts gained 18.3 percent compared with starts in 2012, coming in at a grand total of 923,000 units. Even so last year was low, historically speaking, since starts averaged about 1.5 million units annually from 1959 — when the bureau started keeping track of new housing starts — to 2000, before the bubble market drove starts through the roof and then the recession drove them through the floor.

Number of Job Openings Edge Up

The Bureau of Labor Statistics, in its latest Job Openings and Labor Turnover Summary (JOLTS), said on Friday that there were a little more than 4 million job openings on the last business day of November, up from 3.931 million October. The number of job openings was up 5.6 percent year-over-year in November, which points to a mild strengthening in the labor market. Job openings are at their highest level since before the recession.

JOLTS also noted that the number of quits has also increased over the 12 months ending in November – from 1.751 million a year ago to 2.023 million — even though the number was down for the month. The number of quits rose year-over-year in retail trade, accommodation and food services. Quits are voluntary separations from jobs, and a rising number of them points to rising confidence among employees in the jobs market.

First Bank Failure of the Year

Over the weekend the FDIC closed DuPage National Bank in West Chicago, Ill., marking the first U.S. bank failure of 2014. All together, there were 24 bank failures in 2013, a considerable drop from 2012, which saw 51, and an even bigger drop from the most recent bank-failure peak in 2010, when 157 institutions went belly up.

Wall Street ended the day mixed, with the Dow Jones Industrial Average gaining 41.55 points, or 0.25 percent. The S&P 500 dropped 0.39 percent and the Nasdaq was down 0.5 percent.