December 22nd, 2021
Housing starts surged, while retail sales continued growing, and layoffs increased, but remained in safe territory.
The housing market in need of inventory enjoyed some welcome news, with starts on the construction of private housing in November jumping to an annual rate of 1.67 million, which was 11.8 percent above October’s revised rate of 1.5 million, according to last week’s report from the Census Bureau and Department of Housing and Urban Development.
November’s housing starts came in well above the annual rate of 1.56 million that economists had forecasted, and when compared to the same period a year ago, November’s starts were 8.3 percent over November 2020’s pace of 1.55 million.
Starts on single-family homes in November leaped up to an annual rate of 1.17 million, which was 11.3 percent above the revised October pace of 1.05 million. Starts on buildings with five units or more expanded to an annual rate of 491,000, which was 12.1 percent above October’s revised pace of 438,000.
Building permits issued in November for the construction of private homes rose to an annual rate of 1.71 million, which was 3.6 percent above October’s revised rate of 1.65 million. Permits for single-family homes increased to a rate of 1.1 million for the month, which was 2.7 percent above October’s revised pace of 1.07 million. Permits issued in November for buildings with five units or more rose 6.1 percent to an annual rate of 560,000, up from 528,000 in October.
“These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19 percent year-over-year rise in construction material costs and longer construction times,” National Association of Home Builders Chief Economist Robert Dietz told Barron’s last week.
Turning to consumer activity, retail sales rose to $639.8 billion in November, an increase of 0.3 percent from October’s total of $638.1 billion, the Census Bureau reported last week. When compared to the same period a year ago, November’s sales were 16.1 percent higher than November 2020.
Retail categories that saw significant gains in November included sales at gasoline stations, which increased 1.7 percent; sporting goods, hobby, musical instrument, and book stores, which rose 1.3 percent; food and beverage stores, which also grew 1.3 percent; food services and drinking establishments, which expanded 1 percent; and grocery stores, which improved 0.9 percent.
While sales for November might seem lower than expected for the prime holiday shopping month, it’s important to remember that sales surged 1.8 percent in October due to consumers thinking ahead.
“We saw consumers thinking of inflation and supply chains being chocked, so the ultimate pantry loading happened in October,” EY markets consultant Kathy Gramling told the New York Times.
Initial Jobless Claims
In employment news, first-time claims for unemployment benefits filed by recently unemployed Americans during the week ending December 11th rose to 206,000, which was 18,000 claims up from the preceding week’s revised total of 188,000, the Employment and Training Administration reported last week. The week’s figure was higher than economists’ expectations of 195,000 claims.
The four-week moving average – regarded as a more stable barometer of jobless claims – fell to 203,750 claims, which was 16,000 claims below the previous week’s revised average of 219,750. This marked the lowest level for this average since November 15, 1969, when it was 202,750.
Economists consider any level of first-time claims below 300,000 to indicate a growing job market.
This week, we can expect:
Monday – Leading economic indicators for November from The Conference Board.
Wednesday – Existing home sales for December from the National Association of Realtors; consumer confidence for December from The Conference Board.
Thursday – New home sales for November from the Census Bureau and Department of Housing and Urban Development; initial jobless claims for last week from the Employment and Training Administration; personal incomes and consumer spending for November from the Bureau of Labor Statistics; durable goods orders for November from the Census Bureau.
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