Economy Watch: Homebuilders a Little Less Glum

Builder confidence in the market for new single-family homes rose one point in March to 47 on the National Association of Home Builders/Wells Fargo Housing Market Index.

By Dees Stribling, Contributing Editor

Builder confidence in the market for new single-family homes rose one point in March to 47 on the National Association of Home Builders/Wells Fargo Housing Market Index, which the organization released on Monday. The index’s components were mixed. The component gauging current sales conditions rose one point to 52, while the component measuring buyer traffic increased two points to 33. The component reflecting sales expectations in the next six months fell one point to 53.

The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Any number over 50 indicates that more builders view conditions as good than poor, so the latest index is still in negative territory, though not all of the components are.

“A number of factors are raising builder concerns over meeting demand for the spring buying season,” NAHB chief economist David Crowe noted in a press statement. “These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale.”

Industrial production recovers from winter blahs

The Federal Reserve reported on Monday that U.S. industrial production increased 0.6 percent in February after having declined 0.2 percent in January. In February, the manufacturing subcategory of industrial output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which had resulted, in part, from extreme weather. The gain in factory production in February was the largest since last August.

The production of durable goods rose 0.9 percent month-over-month in February and was 2.7 percent above a year ago, according to the Fed. Large increases in February for several kinds of durables more than offset large decreases in other kinds. The biggest gain was in the output of motor vehicles and parts, which advanced 4.8 percent; the indexes for machinery and fabricated metal products each moved up around 1.5 percent.

The other industrial subcategories were mixed. The output of utilities edged down 0.2 percent following a jump of 3.8 percent in January, while mine production moved up 0.3 percent. At 101.6 percent of its 2007 average, total industrial production in February was 2.8 percent above what it was a year earlier. The capacity utilization rate for total industry increased in February to 78.8 percent, which is 1.3 percentage points below its long-run (1972–2013) average.

Rhode Island tops BLS jobless rankings

The Bureau of Labor Statistics said on Monday that Rhode Island had the highest unemployment rate among the states in January, at 9.2 percent. Energy-booming North Dakota again had the lowest jobless rate, at 2.6 percent. In total, 18 states had jobless rates significantly lower than the U.S. figure of 6.6 percent, six states had measurably higher rates and 26 states and D.C. had rates not much different from that of the nation.

Wall Street had an exuberant day on Monday, with the Dow Jones Industrial Average gaining 181.55 points, or 1.13 percent. The S&P 500 advanced 0.96 percent and the Nasdaq was up 0.81 percent.

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