Economist's Commentary: July 17, 2008

Quick Take on the Economy: July 17, 2008

By George Ratiu

Research Economist George Ratiu

The weekly data on unemployment claims showed mixed results. There were 366,000 people filing for claims for the first time, an increase of 18,000 over the previous week's revised number.
The continuing claims decreased by 81,000 with a total now at 3.1 million people receiving unemployment checks.

Building permits and housing starts increased 11.6 percent and 9.1 percent, respectively in June.
The large upward moves carried a caveat from the Census Bureau. The note mentioned that New York City enacted new construction codes effective July 1, 2008, which resulted in a wave of building permits issued prior to that date. Consequently, the Northeast region's housing starts posted the largest gains-73.0 percent.
The Census pointed out that without the Northeast multi-family data, for the month, there was a 0.7 percent increase in permits and a 4.0 percent decrease in housing starts.
Single-family units continue their downward path with only 613,000 starts, down 39.7 percent from just a year ago.
The surprisingly strong housing starts raises GDP growth to 1.8 percent.

The economy is struggling to move ahead. The job market continues to be soft, with fewer job gain opportunities.
For homebuyers, there is less newly constructed inventory to choose from.

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