Daily Economic Update: Jobless Claims, Housing Starts

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights jobless claims, housing starts, and housing permits.

• Today continues this week’s good news for the economy. The number of new jobless claims is down by a noteworthy 16,000 to end at 414,000. This decline brings the 4-week average to 424,750, which is 15,000 claims below the same time last month. Still, falling below 400,000 is critical for major improvement in the employment.
• Continuing claims also fell by  21,000 to 3.709 million. If jobless claims stay at their current pace, NAR expects less than 1.5  million net new jobs in the next 12 months, which would barely lower the unemployment rate.
• Housing starts showed some slight improvement in May, increasing 3.5 percent, after a 8.8 percent tumble in April. The annualized pace of housing starts now suggests 560,000 units, which is 3.4 percent decrease from a year ago. The gain was driven by the recovering single-family component.
• Regionally, the West and South drove the increase with the West jumping 18.1 percent and the South increasing 1.5 percent. The starts in the Midwest and Northeast declined 4.1 percent and 3.3 percent, respectively.
• Housing permits were also up, 8.7 percent in May. Permits are now at an annualized rate of 612,000 units which is in fact up 5.2 percent from a year ago. While optimistic news for housing starts signifies a better construction employment situation, there is still a very large unabsorbed supply on the market which needs to be cleared out before significant increases in the new construction.