Economy Watch: Home Buildings More Cheerful (or Less Glum)
The National Association of Home Builders reported that its housing market index increased three points in May to 44.
By Dees Stribling, Contributing Editor
The National Association of Home Builders reported on Wednesday that its housing market index increased three points in May to 44. That’s still below the threshold for optimism, which is 50, but even at levels in the 40s, homebuilders are feeling better about their industry’s prospects than they have in years.
All three of the index’s components posted gains in May. The component gauging current sales conditions increased four points to 48, while the one measuring expectations for future sales edged up a single point to 53, which is nevertheless its highest level since February 2007. The component tracking traffic of prospective buyers gained three points to 33.
“While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved,” NAHB chief economist David Crowe noted in a press statement. “[Also], expectations for the future remain quite strong as consumers head back to the market in force.”
EU still mired in recession
Eurostat, the EU agency that compiles economic statistics, reported on Wednesday that recession continues to dog the 17-nation euro zone. Counting the first quarter of 2013, the economic bloc has been shrinking now for six quarters; growth was off 0.2 percent in 1Q13 compared with the previous quarter, and 1 percent compared with 1Q12.
For the 27 countries that are members of the EU (10 of whom have their own currencies), the first quarter contraction was slightly less: 0.1 percent. The largest non-euro-using EU member, the UK, actually posted a small measure of growth during 1Q 13, expanding 0.3 percent, and 0.6 percent compared with the first quarter of 2012.
Nine euro-zone states saw their economies contract during the first quarter. Germany, however, which the economic engine for the zone, managed to post a modest quarterly gain of 0.1 percent, while France shrank 0.2 percent. Cyprus, unsurprisingly, turned in the worst quarterly performance in the zone, contracting 1.3 percent for the quarter and 4.7 percent since last year.
Wholesale prices drop in April
The Bureau of Labor Statistics reported on Wednesday that the U.S. Producer Price Index for finished goods decreased 0.7 percent in April. Take food and energy out of the equation, and the index for inched up 0.1 percent in April. Energy prices, especially for gas, have been declining in recent months in most of the country.
Wall Street posted another moderate up day on Wednesday, with the Dow Jones Industrial Average advancing 60.44 points or 0.4 percent. The S&P 500 and the Nasdaq were up 0.51 percent and 0.26 percent, respectively.