This Week's Economic Roundup
Consumers are growing more concerned with the economy and spending less, while deepening troubles in the housing market has homebuilders worried about the future. Here's a look at this week's economic developments and how they may affect your business.
Leading Indicators Down
Fewer building permits, more jobless claims and weaker consumer confidence drove down the index of leading economic indicators by 0.3 percent in June, the Conference Board reported Thursday.
After gains in May, the index has now declined in four of the past six months, the New York-based private research group said.
Only three of 10 index components advanced in June, including factory working hours, capital equipment orders, and stock prices. On the downturn were building permits, jobless claims, consumer expectations, vendor performance, and interest rate spread, while new orders for consumer goods and real money supply held steady.
By contrast, the coincident index -- a gauge of current economic conditions -- continued to strengthen in June, led by industrial production, personal income, payrolls, and manufacturing and trade sales, the report said.
Consumer Prices Up
Prices paid by consumers crept up in June by 0.2 percent, lifting prices to 2.6 percent above the same period last year, the Labor Department reported Wednesday.
Among the biggest increases last month were prices for food and beverages, housing, and medical, while prices dropped for apparel, energy, and transportation. Food prices were up 4.1 percent on a year-on-year basis.
By contrast, prices paid by manufacturers fell 0.2 percent in June following four straight months of increases, the Labor Department said in a separate report Tuesday.
The declines were driven by falling food and energy prices. Excluding those prices, so-called core producer prices rose 0.3 percent, the report said.
Builder Confidence Plummets
Continuing troubles with subprime mortgage lenders and declining home sales had homebuilders feeling far less optimistic about the housing market, the National Association of Home Builders reported Tuesday.
The trade group's monthly index dropped four points in June to 24, its lowest level since 1991.
"Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market," David Seiders, the group's chief economists, said in a statement.
Housing starts fell 7.5 percent in June to a seasonally adjusted annual rate of 1.406 million, the Commerce Department reported Wednesday.
At the same time, housing starts picked up by 2.3 percent from the previous month to a seasonally adjusted annual rate of 1.467 million, the report said. Despite the gains, housing starts are down 19.4 percent from the same period last year.
Gas Prices Jump
Following a month of declines, gas prices rose for the second straight week, climbing 6.8 cents to $3.049 per gallon as of July 16, the Energy Information Administration reported Wednesday.
Increases were reported in every region, including a 12.7 cent price hike in the Midwest to $3.172 per gallon, the nation's sharpest week-to-week gains.
Across the nation, average gas prices were 6 cents higher than at the same time last year.
Jobless Claims Fall
The number of new claims for unemployment benefits dropped by 8,000 to 301,000 in the week ending July 14, the Labor Department reported Thursday.
The adjusted insured unemployment rate for the previous week was unchanged at 1.9 percent, with 2.571 million people filing claims, the report said.
The biggest declines in new claims last week were in New Jersey, Kentucky, and Connecticut, while the biggest increases were in Michigan, Ohio, and New York.