This Week's Economic Roundup
Woes in the labor market and lower consumer expectations offered more signs of an economic slowdown ahead, while the nation's homebuilders are growing increasingly concerned with the housing market. Here's a look at this week's economic developments and how they may impact your business.
Leading Indicators Down
Driven by declining consumer expectations and a rise in unemployment claims, the index of leading economic indicators fell by 0.5 percent to 137.3 in February, the Conference Board reported on Thursday.
Five of 10 index components declined last month, including jobless claims, consumer expectations, vendor performance, building permits, and interest rate spread, the New York-based private research group said. New orders for consumer and non-defense capital goods, stock process, and real money supply saw gains, while average weekly manufacturing hours was unchanged, the report said.
Since August, the index -- which forecasts economic activity in coming months -- has grown by 0.2 percent, but has been flat or declining in nine of the past 12 months, the report said.
By contrast, the coincident index, which gauges current conditions, rose 0.3 percent in February. All four index components made gains last month, including industrial production, personal income, payrolls, and sales, the report said.
Housing Starts Pick Up
Privately-owned housing starts increased by 9 percent in February to a seasonally adjusted annual rate of 1.525 million, the Commerce Department reported Tuesday.
Despite the gains, housing starts were down by 28.5 percent compared to the same period last year, the report said.
Meanwhile, housing permits fell by 2.5 percent to a seasonally adjusted annual rate of 1.532 million, while housing completions fell by 9.4 percent to 1.664 million, the report said.
Homebuilders Less Confident
The continued declines in the housing market are taking a toll on the nation's homebuilders, the National Association of Home Builders reported on Monday.
Following steady gains since September, the trade group's monthly confidence index dropped three points to 36 in March, the report said.
All three components of the index have declined this month, including home sales, sales expectations, and prospective buyers, the report said.
"Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing the effects of the subprime shakeout on current sales activity," David Seiders, the group's chief economist, said in a statement.
Jobless Claims Fall
New claims for unemployment benefits dropped by 4,000 to 316,000 in the week ending March 17, the Labor Department reported on Thursday.
The declines pushed the four-week moving average of new claims down by 3,750 to 326,000, the report said.
Overall, 2.57 million people filed unemployment claims over the week ending March 10, lowering the national insured unemployment rate by 0.1 percentage points to 1.9 percent, the report said.
The largest decreases in new claims last week were in New York, Michigan, and California, while the largest increases were in Texas, North Carolina, and Wisconsin, the report said.