Last Week’s Economic News in Review March 24, 2021
March 24, 2021
New housing construction and retail sales declined, while layoffs increased.
Housing Starts
Starts on the construction of private housing in February fell to an annual rate of 1.42 million, which was 10.3 percent below January’s rate of 1.58 million, according to last week’s report from the Census Bureau and Department of Housing and Urban Development. When compared to the same period a year ago, this was 9.3 percent lower than February 2020’s pace of 1.56 million.
Starts on single-family homes dropped to an annual rate of 1.04 million in February, which was 8.5 percent down from January’s pace of 1.13 million.
Key factors that impacted February’s housing starts included continued high lumber prices and bad winter weather, especially the ice storm in the Central United States.
“Single-family home building is forecasted to expand in 2021, but at a slower rate as housing affordability is challenged by higher mortgage rates and rising construction costs,” NAHB Chief Economist Robert Dietz noted in a public statement. “The February winter storm ‘Uri’ also held down home building in Texas and some neighboring states.”
Building permits issued for the construction of private homes also fell, dropping to an annual rate of 1.68 million in February, which was 10.8 percent below January’s rate of 1.88 million. Permits for single-family homes declined a rate of 1.14 million for the month, which was 10 percent over December’s pace of 1.27 million.
Retail Sales
Retail sales fell to $561.7 billion in February, a decrease of 3 percent from January, the Census Bureau reported last week. This follows a 7.6 gain in January. While sales were down for the month, when compared to the same period a year ago, February’s sales were 6.3 percent higher than February 2020.
Retail categories that saw significant drops included sales at department stores, which tumbled 8.4 percent; sporting goods, hobby, musical instrument, and book stores, which fell 7.5 percent; non-store retailers, such as kiosks, which dropped 5.4 percent; motor vehicle and parts dealers, which declined 4.2 percent; and furniture and home furnishing stores, which dipped 3.8 percent.
Many economists attributed February’s sales drop to bad winter storms for the month, as well as the fact that consumers were holding out for COVID-19 relief.
“Going forward, the new stimulus checks that are going out as we speak are definitely going to be a positive for retail sales in March and through April,” Moody’s Investors Service retail analyst Mickey Chadha told the New York Times. “All indications are, as the vaccines roll out through the country and the pandemic gets under control, this capacity to spend is only going to fuel further sales in retail.”
Initial Jobless Claims
Initial jobless claims filed by recently unemployed Americans during the week ending March 13th grew to 770,000, a gain of 45,000 claims over the previous week’s 725,000 claims, the Employment and Training Administration reported last week.
The four-week moving average, which is considered a more stable measure of jobless claims, fell to 746,250, which was 16,000 claims below the preceding week’s average of 762,250 claims.
“The labor market remains far from a healthy place, but there are glimmers of hope in these numbers and others,” Nick Bunker, research director at Indeed Hiring Lab, told the Reuters news service. “If coronavirus cases continue to fall and the pandemic gets under control, the labor market can start to sustainably heal.”
This week, we can expect:
Monday – Existing home sales for February from the National Association of Realtors.
Tuesday – New home sales for February from the Census Bureau and Department of Housing and Urban Development.
Wednesday – Durable goods orders for February from the Census Bureau.
Thursday – Initial jobless claims for last week from the Employment and Training Administration; fourth-quarter GDP from the Bureau of Economic Analysis.
Friday – Personal incomes and spending for February from the Bureau of Labor Statistics; trade in goods for February from the Census Bureau; consumer sentiment for March from the University of Michigan’s Surveys of Consumers.
Please drop me an email or call if you have any questions – or someone you know is in need of expert advice. I love to help those you care about. If you have a referral please click the button down below. Your referrals are the heart and lifeblood of my business.
CLICK HERE
Omar Khamisa
Owner
Mission San Jose Mortgage
2111 W. March Lane, Suite B100
Stockton, CA 95207
Office: 209-651-2000
Mobile: 510-648-5535
Fax: 209-434-2311
NMLS: 369325
Omar@MSJMortgage.com
