Tuesday brought Housing Starts and Building Permits data. Housing starts edged up 0.2% to an annual rate of 1.21 million last month. That's the highest rate since October 2007, two months before the last recession began. Economists had expected starts to total a seasonally adjusted 1.19 million. Starts for June were also revised up to a 1.20 million pace from 1.17 million.
Building permits for new construction, a sign of future demand, fell 16.3% to an annual rate of 1.12 million. Analysts were anticipating rate of 1.23 million. Still, permits are 7.5% higher compared to one year ago. Permits for single-family homes, which account for almost three-quarters of the housing market, slipped 1.9% to an annual rate of 679,000 last month.
Wednesday was marked by CPI figures. The Consumer Price Index for All Urban Consumers increased 0.1% in July on a seasonally adjusted basis, missing expectations on 0.2% incline. Over the last 12 months, the all items index rose 0.2% before seasonal adjustment.The indexes for food, energy, and all items less food and energy all rose slightly in July. The food index rose 0.2% as all six major grocery store food group indexes increased. The energy index rose 0.1% as an increase in the gasoline index more than offset declines in other energy component indexes. The index for all items less food and energy also rose 0.1% in July.
However, the focus of the session was on FOMC Meeting Minutes. An improving job market edged the U.S. Federal Reserve closer to an interest rate hike at its July meeting even as policymakers continued to express broad concerns about lagging inflation and the weak state of the world economy, according to minutes released on Wednesday. One Fed policymaker was ready to vote for a rate hike at the July 28-29 meeting, while a group of others "viewed the economic conditions for beginning to increase the target range for the federal funds rate as having been met or were confident that they would be met shortly," according to the minutes.
On Thursday Unemployment Claims, Philly Fed Manufacturing Index and Existing Home Sales figures were released. In the week ending August 15, the advance figure for seasonally adjusted initial claims was 277,000, an increase of 4,000 from the previous week's revised level. Analysts were expecting decrease to 272,000. The 4-week moving average was 271,500, an increase of 5,500 from the previous week's revised average. There were no special factors impacting this week's initial claims.
Philly Fed Manufacturing Index increased from 5.7 in July to 8.3 in August. Smaller incline to 6.9 was anticipated. This index has hovered in a low range since the beginning of the current year, far below the highs of late 2014. The demand for manufactured goods, as measured by the survey’s current new orders index, remains low as well, falling slightly more than 1 point to 5.8 in August. However, the current shipments index rebounded 12 points to 16.7.
Separate report on Existing Home Sales also beat market predictions on a rate of 5.45 million. Report showed that sales increased 2.0% to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June. Sales in July remained at the highest pace since February 2007 (5.79 million), have now increased year-over-year for ten consecutive months and are 10.3 percent above a year ago (5.07 million).
Next week markets will be looking at:
CB Consumer Confidence (Tuesday 16:00)
New Home Sales (Tuesday 16:00)
Durable Goods Orders (Wednesday 14:30)
Prelim GDP (Thursday 14:30)
Unemployment Claims (Thursday 14:30)
Goods Trade Balance (Friday 14:30)
Revised UoM Consumer Sentiment (Friday 16:00)
