Economy Watch: Housing Starts Pick Up, Permits Go Down
- May 19, 2010
May 19, 2010
By Dees Stribling, Contributing Editor
Housing starts picked up a little steam in April, according to HUD. Annualized single-family housing starts totaled 593,000, or 10.2 percent more than the revised March figure. The number of starts for multifamily dwellings of more than five units, however, totaled 68,000, which is much lower than either the three- or six-month moving average for multifamily starts.
All together, housing starts in April were the highest since the month no one likes to remember, October 2008. That seems fitting, considering the recent upticks in the job market, consumer spending and other parts of the economy.
On the other hand, building permits for new homes–the homes that will get under way later this year–dropped to an annualized rate of 606,000 in April, which is 11.5 percent below the revised March rate. It seems that homebuilders are taking the cautious and likely rational approach of anticipating a drop in the demand during the post-tax credit quarters of 2010.
Wal-Mart Profits Up, Same-Store Sales Down
Profits might be up at Wal-Mart Stores Inc., but there’s some indication that the retail behemoth’s Great Recession winning streak is just about over. For the quarter ended April 30, the company’s profits were $3.32 billion, about a 10 percent increase from the same period last year.
All well and good (if you’re Wal-Mart), but same-store sales at the world-spanning chain dropped 1.4 percent. The influx of consumers taking advantage of Wal-Mart’s Always Low Prices now seems to be an outflow as the economy recovers. Profits might be up, but that’s because of cost-cutting and inventory controls and other moves by the company.
During Tuesday’s conference call, Wal-Mart CEO Mike Duke said that the company was undertaking “some actions focuses on price leadership and product assortment” to deal with the same-store sales drop. He also said that in the long-term, Wal-Mart still has a lot of new markets to conquer: “We particularly see substantial growth ahead in Mexico, China and Brazil, and a large part of our capital expenditure budget is committed to those markets… More than 60 percent of the additional square footage of retail selling space this quarter was within Wal-Mart International.”
No More Flash Crashes, Please
The Securities and Exchange Commission has proposed new rules to prevent what’s now known as the “flash crash” of May 6. Under the new scheme, trading would pause for five minutes in S&P 500 stocks whose price moved down more than 10 percent in five minutes.
As yet, no one is quite sure what caused the crash. But everyone is sure it was unpleasant. A report on the event by the SEC released Tuesday said that about 30 S&P 500 index stocks fell at least 10 percent in a five-minute period that day. A pause in trading, asserted the SEC, “would give the markets the opportunity to attract new trading interest in an affected stock, establish a reasonable market price and resume trading in a fair and orderly fashion.”
Wall Street returned to its downward ways on Tuesday, with the Dow Jones Industrial Average losing 114.88 points, or 1.08 percent. The S&P 500 was down 1.42 percent and the Nasdaq declined 1.57 percent.