Housing Starts Improved Moderately in May

Housing starts increased 6.8% in May to an annualized pace of 914,000 units, from a revised April figure of 865,000 units and 28.6% above year ago levels.



May’s gain was driven by multi-family starts, which rose to a pace of 315,000 units annually, a 21.6% from the previous month. Single family starts saw a 0.3% increase, rising to a pace of 599,000 units per month. Single family starts are 29% above year ago levels.



Permit issuance fell 3.1% in May, due to the10% drop in multifamily permits.

Despite the strong improvement in the past year, housing starts remain well below their 50-year average of 1.5 million units.

Read the Census report.

Consumer Prices Rose 0.1% in May

Consumer prices rebounded in May, posting a 0.1% gain which partially offset the previous month’s fall. Rising energy prices and gains in the shelter index contributed to the gain. Prices are now 1.4% above year ago levels. Core CPI remained stable, increasing 0.2% from the previous month and matched the previous month’s year over year gain, at 1.7%.



The shelter index rose 0.3%, accounting for more than half of May’s increase. May’s gain was also driven by the energy index, which grew 0.4%.

Food prices declined 0.1%, following modest increases since the beginning of this year. The 0.3% drop in the food at home index was its steepest in almost four years.

Read the BLS report.

James Chessen Discusses Interest Rates on Fox Business News

ABA's Chief Economist James Chessen spoke with Fox Business News today, where he discussed the interest rates and broke down how quantitative easing impacts both short term and long term rates.

"[Short term] interest rates are probably not going to go up until the first quarter of 2015."

Watch the full interview.

Producer Prices Rose 0.5% in May

Producer prices increased in May and rose to 0.5%, following two months of decline. Producer prices are up 1.8% over year ago levels. The gain was driven primarily by higher gasoline and good prices. Core prices improved 0.1% in May.

Prices for finished energy goods rose sharply, improving 1.3% from the previous month, reversing a two month decline. Higher gasoline prices largely contributed to the gain. Food prices increased 0.6% in May.

The price of crude goods increased 2.2% in May. Crude prices improved 7.6% over year ago levels. However core crude goods fell 2.3% and is 6.3% lower over year ago levels.

Read the BLS report.

Retail Sales Rose 0.6% in May

Retail sales performed better than expected in May, rising 0.6%. May’s growth follows an upward revision to March, which was revised to a 0.3% decline. Retail sales are now 4.3% above year ago levels, a return to the strong year over year growth seen earlier this year in January and February. The jump in sales is largely attributed to a 1.8% increase in auto sales.

Led by an increase in auto sales, building materials also grew 0.9% from the previous month.

Excluding auto and gas, sales improved 0.3% from April.

Despite May’s growth, there were several areas where sales declined from the previous month. Furniture and home furnishings led the decline, at 0.8%. Electronics and appliances as well as food service and drinking places both decreased 0.4%.

Read the Census release.

Small Business Data Trends in 1Q13

Only 22% of small business owners plan to hire a new college graduate in the next 6 months, according to Capital One’s Spark Small Business Barometer, a quarterly survey of small businesses across the nation. 73% of female executives say they don’t plan to hire college graduates, while 81% of males say the same thing about their company.

The survey found financial optimism is on the rise. It creased 3.6% from last quarter and 45% of small businesses across the country are reporting that they believe their financial position will be better in six months.

Small Business Owners are feeling financially better off than a year ago. 35% of small businesses say their firm’s financial position is better than a year ago, compared with 18 % who report that their financial position is worse in Q2 2013 and 23% in 2012.

The report also shed positive light on growing optimism about local market economies. 64% of small businesses are optimistic about the economies where they do business. When the survey launched, in Q1 2009, more than seven in ten consumers felt business conditions in their area were only fair or poor.

Small Business Optimism Continued Increase in May

The NFIB’s Small Business Optimism Index rose 2.3 points in May, reaching 94.4. It is the second consecutive month gain. While May’s reading is the second highest since the recession started December 2007, it’s still well below the long run average of 98.1.



Financing continues to be the least citied challenge facing small business, with only 2% of respondents reporting it as their single most important problem, unchanged from the previous month. Taxes and government requirements remained unchanged as the first and second most often cited problems, but the number of respondents citing the issues as the single most important problem increased. Taxes rose from 23% to 24%, and government requirements and red tap grew 2% to 23%.

Read the NFIB report.