Housing starts rise and jobless claims fall
Posted February 16, 2012
Positive economic data continues here in the U.S. in the form of stronger housing starts and fewer jobless claims.
Starts were up 1.5 percent in January, providing good fundamental news for housing across the country, and along with that comes the continuation of optimism from homebuilders in their sentiment levels which have now risen for five straight months and the measured sentiment index is hovering around five year highs. I can tell you that the builders I have spoken with over the past few months here in the Triangle are echoing this sentiment as well.
Jobless claims also fell this week, dropping 13,000 to a seasonally adjusted index of 348,000 which is the lowest reading since March 2008.
The Dow ran with this positive data today, closing up over 100 points. We’re getting very close to 13,000 and if we continue to see such strength in domestic economic data, I have to wonder if this will force the Fed to restructure their monetary policy forecast which has been posted through the end of 2014.
Europe still plays a major role in this decision, and it’s likely that the massive uncertainty we see there will help to keep the interest rate policy on track here in the US – even if a moderate amount of growth continues at home because currently we’re also keeping inflation in check as well. For now mortgage rates continue to trend in a narrow range. Home purchases are improving, and we’re also seeing the refinance market continuing to do well.