Construction starts the year off wrong
The value of new U.S. construction starts fell 13 percent in January from the month before to a seasonally adjusted annual rate of $485.0 billion, according to a Feb. 21 report by McGraw Hill Construction.
The downturn followed a healthy performance in December , which was the third highest month for total construction starts during 2013. January’s retreat encompassed all three main construction sectors, with moderate declines reported for nonresidential building and housing, as well as a more substantial loss of momentum for non-building construction (public works and electric utilities) after a particularly robust December .
On an unadjusted basis, total construction starts in January came in at $34.1 billion, down 5% from the same month a year ago.
“The year 2014 began slowly, due to behavior specific to each of the three main construction sectors,” stated Robert A. Murray, chief economist for McGraw Hill Construction. “Nonresidential building in 2013 advanced 7 percent, but the progress was occasionally hesitant, including sluggish activity at the end of last year that carried over into January. At the same time, the prospects for continued growth for nonresidential building during 2014 are generally positive, helped by receding vacancies for commercial properties and some improvement in the fiscal health of state governments.”
Murray said the rough weather in January was a factor in the slowdown. But housing had been slowing down in the prior months, and non-building construction has been up and down.
All geographic sectors of the nation saw lower levels of construction, with the Midwest down 3 percent.
Extended jobless money under review
With more than two months having passed since extended federal jobless benefits expired, the number of jobless workers who no longer receive benefits has increased by about 576,000, to a total of nearly 2 million.
So far Congress has been unable to break a deadlock on the Republican side, which is made up of members who are simply against the extension of benefits or those who want more give-backs in the federal budget that Democrats have been unwilling to make.
“The loss of long-term unemployment benefits is weighing down our economy at a critical point in the economic recovery, threatening to inflict long-term damage,” said Ways and Means Committee Ranking Member Sander Levin (D-MI). “Long-term unemployment remains an enormous challenge for millions of Americans and our overall economy, which is exactly why Republicans should join with Democrats to renew this important program.”
Earlier this month Dems on the House Ways and Means Committee issued a report saying the termination of benefits cost the US economy $3 billion in January and February, including $89 million in Michigan. Some key Republican in the Senate met in mid-February in an effort to clear the log-jam, including studying Democratic proposals to lower the deficit in exchange for extending benefits.