Economy Watch: Homebuilders Still Optimistic, But Less So
After four consecutive monthly gains, builder confidence in the market for newly built single-family homes fell five points to 54 on the National Association of Home Builders/Wells Fargo Housing Market Index.
By Dees Stribling, Contributing Editor
After four consecutive monthly gains, builder confidence in the market for newly built single-family homes fell five points to 54 on the National Association of Home Builders/Wells Fargo Housing Market Index, which the organization released on Thursday. That’s still in optimistic territory–anything over 50 is–but not quite as optimistic as earlier.
All three-index components declined in October. The index gauging current sales conditions decreased six points to 57, while the index measuring expectations for future sales slipped three points to 64. The index tracking traffic of prospective buyers dropped six points to 41.
“While there was a dip this month, builders are still positive about the housing market,” NAHB Chief Economist David Crowe notes. “After the [index] posted a nine-year high in September, it’s not surprising to see the number drop in October. However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.”
Industrial production edges up in September
U.S. industrial production increased 1 percent in September and advanced at an annualized rate of 3.2 percent in the third quarter of 2014, roughly its average quarterly increase since the end of 2010, according to the Federal Reserve on Thursday. In September, manufacturing output moved up 0.5 percent, while the indexes for mining and for utilities climbed 1.8 percent and 3.9 percent, respectively.
For the Q3 2014 as a whole, manufacturing production rose at an annualized rate of 3.5 percent and mining output increased at an annualized 8.7 percent. By contrast, the output of utilities fell at an annual rate of 8.5 percent for a second consecutive quarterly decline.
At 105.1 percent of its 2007 average, total industrial production in September was 4.3 percent above its level of a year earlier. The capacity utilization rate for total U.S. industry moved up 0.6 percentage points in September to 79.3 percent, a rate that’s 1 percentage point above its level of 12 months earlier, but 0.8 percentage points below its long-run (1972–2013) average.
Unemployment claims lowest in 14 years
During the week ending October 11, initial unemployment claims were 264,000, a decrease of 23,000 from the previous week, according to the U.S. Department of Labor on Thursday. That’s the lowest level for initial claims since April 15, 2000, when the total was 259,000. The four-week moving average was 283,500, a decrease of 4,250 from the previous week, and the lowest level for that metric since June 10, 2000.
Wall Street took another breather from its downward slide on Thursday, with the markets ending mixed. The Dow Jones Industrial Average was off only 24.5 points, or 0.15 percent. The S&P 500 and Nasdaq gained a scant 0.01 percent and 0.05 percent, respectively.