Encouraging Data: Housing Starts Rise; Jobless Claims Fall

By John S. McClenahen Housing remains a bright spot in a U.S. economy that, some 20 months after the 2001 recession is said to have ended, is still trying to get a respectable recovery going. Starts for privately owned housing were at a seasonally adjusted annual rate of 1.803 million in June, the U.S. Commerce Department and U.S. Department of Housing and Urban Development jointly reported on July 17. June's figure was 3.7% higher than May's revised rate of 1.738 million and 5.5% above the June 2002 rate of 1.709 million. Single-family home starts in June were at an annual rate of 1.462 million, 5.3% higher than the May rate of 1.388 million. With the weekly number of initial claims for unemployment insurance continuing to run above 400,000, the U.S. labor market remains soft. However, for the week ending July 12, initial claims fell to 412,000, a decrease of 29,000 from the previous week's revised figure of 441,000, says the U.S. Labor Department. The four-week moving average of initial claims, which smooths out week-to-week swings in the numbers, also decreased. Last week it stood at 424,000, some 3,500 lower than the previous week's average. Although manufacturing has yet to see a surge in business, the Cambridge, Mass.-based National Bureau of Economic Research (NBER), the official arbiter of such things, is now saying that the recession that began in March 2001 ended in November 2001. Acknowledging that it still may not feel like much of a recovery, NBER's Business Cycle Dating Committee does not claim that economic conditions since November 2001 "have been favorable or that the economy has returned to operating at normal capacity." Rather, the committee has "determined only that the recession ended and a recovery began in that month."

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