Economy Watch: Housing Starts Slid in June
- Jul 18, 2014
U.S. housing starts in June came in at an annualized rate of 893,000 units, according to the Census Bureau on Thursday. That’s a drop of 9.3 percent compared with the May rate of 985,000 units, but is 7.5 percent above the June 2013 rate. A number of factors might account for the relative weakness of housing starts thus far in 2014, such as bad weather this winter, upwardly creeping mortgage rates and higher prices in some markets.
Single-family housing starts in June were the main drag on the overall figure, posting a rate of 575,000 units, which is 9.3 percent below the May figure of 632,000 units. Single-family starts are still up 7.5 percent for the year. Multifamily starts, which tend to swing around, dropped 11.3 percent for the month, but are up 39.3 percent since the same time last year.
Residential permits, which are a forward-looking indicator, came in at 963,000 units in June. That too is a drop month-over-month: down 4.2 percent compared with May, but up 2.7 percent compared with a year ago.
Unemployment claims drop, so does Wall Street
In the week ending July 12, initial U.S. unemployment claims came in 302,000, a decrease of 3,000 from the previous week. The four-week moving average was 309,000, also a drop of 3,000 from the week before. This is the lowest four-week average since well before the recession, on June 2, 2007.
Despite that, Wall Street took a dive on Thursday, supposedly on investor jitters about eruptions of violence in various parts of the world, or maybe because housing starts disappointed, but in any case the Dow Jones Industrial Average lost 161.39 points, or 0.94 percent, its sharpest drop since April. The S&P 500 was off 1.18 percent and the Nasdaq declined 1.41 percent.
While various equities markets were falling, some commodities rose on Thursday on international markets. Gold for August delivery rose more than $17 to $1,316.90 per troy ounce, a 1.3 percent increase, while silver for September delivery rose 36 cents, or 1.7 percent, to $21.34 per troy ounce. Oil prices were also up. As word of the apparent shooting down of a Malaysian Air jet over Ukraine broke on Thursday evening in the U.S., Asian markets, which were open for Friday trading, started to fall.