Last Week’s Economic News in Review
Construction spending for February suffered a setback, growing only 0.1 percent to an annual rate of $1.273 trillion over January’s pace of $1.272 trillion, according to last week’s report from the Census Bureau. That said, February’s spending was still 3 percent higher than February 2017’s rate of $1.235 trillion.
Economists had initially projected construction spending to increase 0.5 percent for February, and attributed the month’s stunted spending growth to a 2.1 percent drop in public construction spending, which is down to an annual rate of $291.1 billion from January’s pace of $297.4 billion.
Fortunately, spending on private construction grew 0.7 percent in February to hit an annual rate of $982 billion. Residential construction grew 0.1 percent for the month to reach an annual rate of $533.4 billion. Moreover, spending on construction of single-family homes grew 0.9 percent to an annual rate of $281.8 billion.
While the downturn in overall construction growth isn’t good news for builders, housing market watchers should feel safe in the fact that single-family home building continues to grow. This should continue to help push the supply of new homes for sale, which should help to keep prices in check and thusly encourage healthy sales volume.
The economy added 103,000 non-farm jobs in March, with manufacturing, health care, and mining being key drivers of new job growth, the Bureau of Labor Statistics reported last week. This was the smallest monthly increase in six months. For comparison, job growth averaged about 202,000 a month over the first quarter.
March’s job growth kept the unemployment rate at 4.1 percent with 6.6 million people out of work. The number of Americans unemployed for 27 weeks or longer totaled 1.3 million, which was down by 338,000 people from the same period a year ago.
Federal Reserve Chairman Jerome Powell said the Fed expected employment to continue posting strong monthly activity.
“The strong job market does appear to be drawing back some people who have been out of the labor force for a significant time,” he noted. “Anecdotal reports indicate that employers are increasingly willing to take on and train workers they would not have considered in the past.”
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed during the week ending March 31 grew to 242,000, a gain of 24,000 claims from the preceding week’s total of 218,000, the Employment and Training Administration reported last week. The jump in layoffs surprised job market watchers, which had expected an increase to only 225,000. The Administration added that the impacts of hurricanes Harvey, Irma, and Maria continued to skew layoffs data.
The four-week moving average – regarded as a more reliable measure of initial jobless claims – grew to 228,250 claims, an increase of 3,000 claims from the prior week’s average of 225,250. Last week’s report also marked the 161st week in which initial claims were below the 300,000-claim level, which economists consider an indicator of a growing job market.
This week, we can expect:
- Tuesday — Producer Price Index for March from the Bureau of Labor Statistics; wholesale inventories for February from the Census Bureau.
- Wednesday — Consumer Price Index for March from the Bureau of Labor Statistics; Federal budget for March from the Census Bureau.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; import prices for March from the Bureau of Labor Statistics.