This Week's Economic Roundup
Robust employment continues to keep the economy strong, while an upturn in building permits could signal better days ahead for the housing market. Here's a look at this week's economic developments and how they may affect your business.
Leading Indicators Up
A drop in weekly jobless claims and a stronger consumer outlook on the economy pushed the index of leading indicators up by 0.2 percent in May, the Conference Board reported Thursday.
Five components of the index made gains last month, including weekly jobless claims, stock prices, building permits, consumer expectations, and vendor performance, the New York-based private research group said. On the downturn were real money supply, average weekly manufacturing hours, and the interest rate spread, while new factory orders for both consumer and capital goods held steady.
The leading index, which slipped in April, has grown by 0.3 percent over the past six months with four of the 10 components making gains.
Led by strengths in employment, the coincident index, which gauges current economy conditions, moved up 0.2 percent and has grown by 0.8 percent over the past six months, the report said.
Personal Income Growing
Personal income nationwide grew by 2.2 percent in the first three months of the year, a faster pace than the previous quarter, the Commerce Department reported Thursday.
The gains were led by New York, where large bonus payments in the securities industry boosted overall state personal income growth by 4.7 percent -- more than twice as high as the national average, the report said. Earnings in only eight other states grew faster or on pace with the national average, including Connecticut, New Jersey, Illinois, and Delaware.
By industry, the mining, information, and finance sectors led all others, growing slightly faster than the all-industry average of 2.1 percent. By contrast, farm income fell by 7.4 percent.
Housing Starts Down
The number of housing starts in May dropped by 2.1 percent from the previous month to annual pace of 1.47 million nationwide, though an upturn in building permits could signal more activity in the months ahead, the Commerce Department reported Tuesday.
House starts were down 24.2 percent from the same period last year, and included a 3.4 percent decline in single-family homes, the report said.
Housing completions in May were also down, by 0.5 percent, while building permits rose by 3 percent.
On Monday, the National Association of Home Builders reported that builder confidence in June had fallen to a six-year low, driven down by concerns over the subprime mortgage crisis and rising prime mortgage rates.
"Builders continue to report serious impacts of tighter lending standards on current home sales as well as cancellations," Brian Catalde, the group's president, said in a statement.
Gas Prices Falling
Average gas prices nationwide fell by 6.7 cents this week to $3.009 per gallon, the fourth straight week of declines, the Energy Information Administration reported Wednesday.
Despite the declines, which were reported in every region, gas prices remain 13.8 cents higher than the same period last year.
The largest drop in prices this week was in the Midwest, where prices fell 8.9 cents to $2.976 per gallon. Prices in California remain the nation's highest at $3.236 per gallon.
Jobless Claims Rise
The number of new claims for unemployment benefits rose by 10,000 last week to 324,000, the Labor Department reported Thursday.
The national adjusted insured unemployment rate in the week ending June 9 was unchanged at 1.9 percent, with a total of 2.523 million people filing jobless claims.
The largest increases were in California, Pennsylvania, and Florida, while the largest declines were in Michigan, Kansas, and Iowa.