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Economic Review: February 22,2017

Mortgage Economics

 

The big economic headline maker last week was retail sales, which saw healthy growth. Also, housing starts saw mixed performance, while layoffs rose, but remained in safe territory.

Retail Sales

Retail sales for January 2017 enjoyed a 0.4 percent gain to hit $472.1 billion, the Census Bureau reported last week. Compared annually, January’s receipts were 5.6 percent higher than January 2016’s sales.

Gasoline stations were a key driver for January’s growth, increasing 2.3 percent. Other categories that saw solid performance were electronics and appliance stores, which grew 1.6 percent; clothing stores, which grew 1 percent; sporting goods, hobby, book and music stores, which grew 1.8 percent; department stores, which grew 1.2 percent; and food service and drinking establishments, which grew 1.4 percent.

The two notable categories that suffered declines during January were auto and other motor vehicle dealers, which saw sales drop 1.2 percent; and car and motor vehicle parts dealers, which experienced a 1.4 percent drop.

Housing Starts

Starts on construction of homes dropped 2.6 percent in January to dip to an annual rate of 1.24 million, according to last week’s figures released by the Census Bureau. That said, when compared annually, January’s housing starts were 10.5 percent higher than January 2016’s rate of 1.12 million.

The big drag on January’s housing starts was on multi-family housing, with starts on buildings with five or more units dropping 7.9 percent to an annual rate of 421,000. Meanwhile, starts on single-family homes in January saw good news, growing 1.9 percent to hit a rate of 823,000.

Permits issued in January for construction of housing units grew 4.6 percent to hit an annual rate of 1.28 million. Compared annually, this was 8.2 percent higher than January 2016’s rate of 1.18 million. Permits issued for single-family homes dipped 2.7 percent to fall to an annual rate of 808,000.

Initial Jobless Claims

First time claims for unemployment benefits filed by the newly unemployed during the week ending February 11 notched up to 239,000, a gain of 5,000 from the preceding week’s total of 234,000, the Employment and Training Administration reported last week.

The four-week moving average — considered a more stable measure of employment — also ticked up slightly to 245,250, a rise of just 500 claims from the prior week’s average of 244,750 claims.

This is the 102nd week that jobless claims have come in below the 300,000 -claim mark that economists consider indicative of a growing job market.

Wednesday — Existing home sales for January from the National Association of Realtors.
Thursday — Initial jobless claims for last week from the Employment and Training Administration.
Friday — February consumer sentiment from the University of Michigan Survey of Consumers; new home sales for January from the Census Bureau.