Economic Watch: Housing, Consumer Confidence Down as Industrial Production Stalls
Newly issued economic reports show housing starts in the U.S. declined for the third straight month in May, while consumer confidence slipped and industrial production was unchanged due to a drop in manufacturing.
Led by a drop multifamily production, nationwide housing starts fell 5.5% in May to a seasonally adjusted annual rate of 1.09 million units, according to figures released Friday by the Commerce Department.
Multifamily starts fell 9.7% to a seasonally adjusted annual rate of 289,000 units, while single-family production edged down 3.9% to 794,000.
“After a strong start for single-family building this year, recent months have recorded softer readings,” said NAHB Chief Economist Robert Dietz. “However, on a year-to-date basis, single-family starts are up 7.2% as builders add inventory to the market.”
Overall permit issuance in May was down 4.9% to a seasonally adjusted annual rate of 1.17 million units. Single-family permits inched down 1.9% to 779,000 units, while multifamily permits fell 10.4% to 389,000.
Consumer Confidence Erodes
This came as a separate and preliminary report showed consumer confidence fell in June and is up only marginally compared to the same time a year ago, according to the University of Michigan Survey of Consumers.
The modest early June drop of 2.6 points in the Sentiment Index to 97.1 masks a much larger decline since June 8. Prior to then it averaged 97.7, but since June 8, the index fell to 86.7, a decline of 11 points.
While this date corresponds with former FBI Director James Comey’s testimony over his firing, only a few consumers spontaneously referred to him or his testimony when asked to explain their views, according to Surveys of Consumers chief economist, Richard Curtin.
“Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8 was larger than among Democrats, with Independents showing the greatest falloff,” …Read the rest of this story
