WREN Report: Housing Starts Tumble; Consumer, Producer Indices Decline

November 23, 2008  by in UnCategorized   

By Home Furnishings Business in on November 2008 • Privately owned housing starts decreased 4.5 percent in October, to a seasonally adjusted annual rate of 719,000, compared with September starts of 828,000. Measured against October 2007 results, starts fell 38 percent. October housing starts continued the year-long pattern of falling starts.

Measured against September results, housing starts were up 1.5 percent in the South and 7.5 percent in the West and fell 31 percent in the Northeast and 13.7 percent in the Midwest. Year-over-year, housing starts declined 51.6 percent in the Northeast, 38.2 percent in the Midwest, 33.9 percent in the South and 39.1 percent in the West.

The number of completed privately owned housing units fell 10.2 percent in October to a seasonally adjusted annual rate of 1.043 million units compared with September figures. Measured against October 2007 results, completions skidded 25.6 percent.

Housing starts and completions are tracked by the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce.

• The Consumer Price Index (CPI) slipped 1 percent in October on a seasonally adjusted basis to 216.71. Despite the decrease in overall CPI, the index for household furnishings and operations was flat, following a 0.5 percent increase in September. The index for household energy declined 0.9 percent in October as declines in the fuel oil and natural gas indices more than offset an increase in the electricity index.

CPI, tracked by the U.S. Bureau of Labor Statistics (BLS), measures the average change in prices over time of goods and services purchased by households. The index base is 1982–84 equals 100.

• The Producer Price Index (PPI) for manufacturing industries, also tracked by the BLS, stood at 177.3 in October, down 2.8 percent from September. October PPI for furniture and related products manufacturing was 174.3, up 0.4 percent compared with September and up 4.9 percent from October of last year.

PPI for furniture and home furnishings stores, however, stood at 122.5 in October, up 0.4 percent from September and 2 percent from October 2007.

PPI measures the average change over time in the prices received by domestic producers of goods and services. PPI measures price changes from the perspective of the seller.

Weekly Review of Economic News (WREN) reports are summaries of recently-released economic statistical data that affect the home furnishings industry. WREN reports are compiled by HFB Research Editor Janice Chamberlain.