Economy Watch: Housing Starts Stagnate in February
- Mar 19, 2014
Housing starts in February came in at an annualized rate of 907,000 units, according to the Census Bureau on Tuesday. That isn’t much changed from January—only 0.2 percent below the revised January estimate of 909,000 units—but it is considerably lower than during February 2013. The annualized rate that month was 969,000 units, meaning the February 2014 rate was down 6.4 percent.
Single-family housing starts in February were at an annualized rate of 583,000 units; that’s 0.3 percent above the revised January figure, so the overall slight decline for the month was because of the more volatile multifamily market. The February rate for buildings with five units or more was an annualized rate of 312,000, down 2.5 percent for the month.
Housing units permitted but not yet started—which is a forward-looking indicator of the market—were at annualized rate of 1.018 million units in February. That’s 7.7 percent above the revised January rate and 6.9 percent above the February 2013 rate. Single-family authorizations in February came in a rate of 588,000 units, or 1.8 percent below the revised January figure. Permitting of buildings with five units or more was at a rate of 407,000 in February, or up 6.3 percent for the month.
Inflation still subdued, but meat’s more expensive
The Bureau of Labor Statistics reported on Tuesday that the Consumer Price Index for All Urban Consumers increased 0.1 percent in February. Over the last 12 months, the all-items index increased 1.1 percent, meaning that inflation continues to be a toothless tiger.
An increase in the price of food accounted for more than half of the all-items increase in February. The food index rose 0.4 percent in February, driven by a 0.5 percent increase in the price of food at home, with four of the six major grocery store food group indexes increasing. Meat in particular is rising in price. By contrast, the cost of energy declined, with a decrease in the gasoline more than offsetting sharp increases in fuel oil and natural gas.
The shelter index was up 0.2 percent for the month, and the price of medical care, airline fares, personal care, recreation and new vehicles also increased. On the other hand, the cost of household furnishings, apparel, used cars and trucks and tobacco all declined in February.
Wall Street had another up day on Tuesday, with the Dow Jones Industrial Average gaining 88.97 points, or 0.55 percent. The S&P 500 advanced 0.72 percent and the Nasdaq was up 1.24 percent.