Labor Dept. Reports Biggest Decline Since 1949

Construction of new homes and apartments jumped 17.2% in May to a seasonally adjusted annual rate of 532,000 units. The increase was led by a 62% rise in the construction of multifamily units. Construction of single-family homes rose 7.5% to an annual rate of 401,000, and building permits, seen as a good indicator of future activity, were up 4% to an annual rate of 518,000 in May.

The National Association of Home Builders/Wells Fargo housing market index fell one point in June to 15. An index reading below 50 indicates negative sentiment about the housing market.

The Labor Department reported the producer price index, which tracks wholesale prices, rose 0.2% in May, following a 0.3% increase in April. For the year, wholesale prices have dropped 5%, the biggest 12-month decline since 1949.

The Federal Reserve reported that industrial production at the nation’s factories, mines and utilities fell 1.1% in May, following a revised 0.7% decrease in April. Economists had expected a decline of 0.9% in May.

The Labor Department reported that consumer inflation rose a seasonally adjusted 0.1% in May. For the year, the consumer price index is down 1.3%, the biggest decline since 1950.

The Conference Board reported that its index of leading economic indicators rose 1.2% in May, following a revised 1.1% gain in April. It was the best back-to-back performance since November-December 2001. The index is designed to forecast economic activity in the next three to six months.

Initial claims for unemployment benefits rose by 3,000 to 608,000 in the week ending June 13 from a revised figure of 605,000 in the previous week. The number of people continuing to claim jobless benefits in the week ending May 30 fell 148,000 to 6.69 million. It was the largest drop since November 2001.

Upcoming on the economic calendar are reports on existing home sales on June 23, durable goods orders and new home sales on June 24, and consumer spending on June 26.

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> Rantings — Wes @ 11:42 am

June 22, 2009