Housing, industrial production data give conflicting signals
Economists had been waiting for a series of data releases Tuesday for an indication of where the direction the economy was headed. But so far the numbers have been mixed.
July housing starts were at a seasonally adjusted rate of 604,000, lower than June but higher than July of last year, the U.S. Census Bureau said. Permits for residential construction also declined, by 3.2%. But few had really expected housing to do well anyway.
"Today's economic data confirms that residential construction will not provide much of a boost to headline growth this year," Comerica economist Robert A. Dye wrote in a note.
On the flip side, industrial production numbers were better than expected. Industrial production grew 0.9% in July, according to the Federal Reserve. This was led by manufacturing of motor vehicles and parts, which started up production again after a lapse casued by the Japan earthquake and tsunami.
Those numbers were "a counterbalance to the drag from recent financial market volatility," Dye wrote.
For production numbers to keep growing, car sales must continue to rebound. Vehicle sales grew to 12.2 million in July, but recent hits to consumer confidence may stall this segment of the economy. The consumer confidence index plunged to 54.9 in August, according to the University of Michigan Consumer Sentiment Index, from 77.5 last February.
Chain store sales numbers from the week also indicate consumer confidence is flagging. Shoppers pulled back for the third straight week with retail sales falling 1.5% in the week ending Aug. 13. In the previous week, sales had declined 0.5%.
"Last week’s large-scale stock market drops and wild volatility added to consumers' concerns about the slowing and failing economy and as a result pulled back on their overall spending once again,” said Michael Niemira, ICSC vice president of research and chief economist.
For a schedule of economic data coming out in the next month, look after the jump.
Leading economic indicators (Conference Board)
Initial claims for unemployment insurance -- weekly (Department of Labor)
July existing home sales (National Assn. of Realtors)
Business Outlook Survey (Philly Fed)
July new home sales (Census Bureau)
Advance report on manufacturer’s shipments, orders, inventories (Census Bureau)
Revised 2nd quarter GDP (Bureau of Economic Analysis)
Manufacturing report on business (Institute of Supply Management)
August U.S. employment numbers (Bureau of Labor Statistics)
-- Alana Semuels
Photo: Students on a tour of a Honda plant in Marysville, Ohio. An increase in automobile manufacturing has helped drive an overall upswing in industrial production. Credit: Business Wire