Summit Mortgage Economic News


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Construction spending hit a near 11-year high, monthly employment saw mixed performance but was positive overall, and layoffs saw a solid decline.

Construction Spending

Construction spending in February returned to a growth trajectory, increasing to an annual rate of $1.19 trillion, which was 0.8 percent over January’s estimate of $1.18 trillion, the Census Bureau reported. While this was slightly off from economists’ projections of 1 percent growth, it was a positive turn from the previous month’s 0.4 percent contraction, and enough to put construction spending at the highest level since April 2006.

Spending on private construction in February hit an annual rate of $917.3 billion, which was 0.8 percent higher than January’s pace of $910 billion, with residential construction surging to an annual rate of $484.7 billion, which was 1.8 percent over January’s rate of $476.1 billion. Construction of single-family homes grew 5 percent to hit an annual rate of $257.5 billion.

It is clear that builders are trying to feed a housing market that needs more inventory in order to not only keep up with demand but to keep prices in check.

Jobs Report

The jobs report for March was a mixed bag, with the economy adding only 89,000 jobs, while the market had been expecting 175,000 jobs, according to figures released last week by the Bureau of Labor Statistics. Growth was in professional and business services and in mining, while retail trade lost jobs.

That said, the actual unemployment rate was down to 4.5 percent, while the market had expected it to continue hovering at 4.7 percent. All told, the number of unemployed persons declined by 326,000 to 7.2 million.

The number of Americans employed on a part-time basis for reasons such as their hours being cut or that being the only work they could find saw little change, hovering at 5.6 million. That said, “involuntary part-time” population was down by 567,000 over the year.

The number of people jobless for 27 weeks or longer — also known as long-term unemployed — continued to hover at 1.7 million. Over the year, the long-term unemployed population has dropped by 526,000.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the recently unemployed during the week ending April 1 dropped to 234,000, a decline of 25,000 from the prior week’s total of 259,000, the Employment and Training Administration reported last week.

The four-week moving average — considered a more stable measure of layoff activity — dropped to 250,000, a decline of 4,500 claims from the preceding week’s revised average for 254,500.

Written by Summit Mortgage Corporation in Lakewood, CO