Economy Watch: Housing Starts Continue Upward Trajectory
- Apr 17, 2013
Housing starts were up in March to an annualized rate of about 1.03 million units, according to the Census Bureau on Tuesday. That’s fully 7 percent more than the rate in February, but even that healthy increase pales in comparison to the year-over-year spike of 46.7 percent compared with March 2012.
The monthly increase was due to multifamily starts, which tend to yo-yo around from month to month, but which managed to rise last month to their highest level (392,000 units) since before the Panic of 2008. Single-family starts were actually down for March, coming in at an annualized rate of 619,000 units, down 4.8 percent below February, but up a healthy 28.7 percent for the year.
Permit activity was likewise down a little for the month, but up significantly for the year. Permits, which are considered a forward-looking indicator for the health of the housing market, were at an annualized rate of 902,000 in March. That’s a drop of 3.9 percent compared with February, but a 17.3 percent increase compared with last year.
Inflation still low
The Bureau of Labor Statistics reported on Tuesday that its Consumer Price Index for All Urban Consumers decreased 0.2 percent in March. Over the last 12 months, the all-items index increased 1.5 percent.
Driving the decrease of the all-items index was a 4.4 percent decline in the gasoline index, reflecting drops at the pump nationwide during March. The indexes for electricity and fuel oil dropped as well, as the energy index fell 2.6 percent in March after yo-yoing up 5.4 percent in February. The food index was unchanged in March, with the index for food at home declining slightly.
Remove food and energy from the CPI, which is known as the “core index,” and prices were actually up for the month, but only by 0.1 percent. The price of shelter, used cars and trucks, medical care, personal care and airline fares all edged up in March. These increases more than offset declines in the indexes for apparel, household furnishings and operations, and tobacco.
Industrial production on the rise
The Federal Reserve reported on Tuesday that U.S. industrial production rose 0.4 percent in March after an increase of 1.1 percent in February. For the first quarter as a whole, output moved up at an annualized rate of 5 percent, the largest gain since the first quarter of 2012.
Speaking of yo-yos: Wall Street was up almost as much on Tuesday as it was down on Monday, with the Dow Jones Industrial Average gaining 157.58 points, or 1.08 percent. The S&P 500 gained 1.43 percent and the Nasdaq advanced 1.5 percent.