U.S. Housing Starts Hit 9-Month High

U.S. Housing Starts Hit 9-Month High
Copyright By THE ASSOCIATED PRESS
Published: September 17, 2009
http://www.nytimes.com/2009/09/18/business/economy/18econ.html?hpw


WASHINGTON (AP) — The government said that housing construction rose in August to the highest level in nine months as a surge in apartment building offset a decline in single-family activity.

The August performance was another sign that the nation’s housing industry has begun to recover from its worst downturn in decades.

The Commerce Department said in a statement that construction of new homes and apartments rose 1.5 percent to an annual rate of 598,000 units last month. That is slightly lower than the 600,000-unit pace that economists had forecast.

The increase pushed building activity to the highest level since last November and left home construction 24.8 percent above the record low hit back in April.

Applications for building permits, a forecaster of future activity, posted a 2.7 percent rise in August to an annual rate of 579,000 units, slightly below the 580,000 level that had been forecast. Permits for single-family homes dipped by 0.2 percent while multifamily units rose by 15.8 percent.

The 1.5 percent rise in housing starts followed a 0.2 percent dip in July. The August strength came from a 25.3 percent surge in construction of multifamily units, a volatile sector which had fallen by 15.2 percent in July.

The larger single-family sector dipped 3 percent last month to an annual rate of 479,000 units, the first setback after five straight monthly gains.

By region, construction shot up 23.8 percent in the Northeast and 0.9 percent in the Midwest. Activity was flat in the West and fell 2.4 percent in the South.

In another report, the number of newly laid-off workers seeking unemployment benefits fell last week to the lowest level since early July, evidence that layoffs are slowing.

The Labor Department said initial claims for unemployment insurance dropped to a seasonally adjusted 545,000 from an upwardly revised 557,000 the previous week. Wall Street economists expected claims to rise by 5,000, according to Thomson Reuters.

The decline is the third in the last four weeks. The four-week average, which smoothes fluctuations, dropped 8,750 to 563,000. That is still far above the 325,000 a week typical in a healthy economy.

The number of people claiming benefits for more than a week rose by 129,000 to a seasonally adjusted 6.2 million.

When federal extended benefits are included, 9.01 million people received unemployment insurance in the week ending Aug. 29. That was down from 9.16 million the previous week. Congress has added up to 53 weeks of extended benefits on top of the 26 weeks provided by the states.

Thursday’s report comes a day after the Federal Reserve said production by the nation’s factories, mines and utilities increased for the second straight month in August, the latest sign the economy is recovering.

The jobless rate is widely expected to peak next year above 10 percent, up from its current 9.7 percent. Some analysts say that claims need to drop below 400,000 before the unemployment rate will start to decline.

Among the states, Washington had the largest increase in claims of 4,546, which it attributed to greater layoffs in the construction, public administration, and manufacturing industries. The next largest increases were in Pennsylvania, Massachusetts, North Carolina and Illinois. The state data lag initial claims by a week.

California had the largest drop in claims of 2,751. The next largest decreases were in New York, Wisconsin, Texas and New Jersey.