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Craig Greene: Housing Market Index Posts First Gain in 5 Months

By Craig Greene | Published on 02.22.2010

The National Association of Home Builders/Wells Fargo housing market index rose two points in February to 17. It was the first gain in five months.

Economists had anticipated a dip to 14. An index reading below 50 indicates negative sentiment about the housing market.

The combined construction of new single-family homes and apartments in January rose 2.8 percent to a seasonally adjusted annual rate of 591,000 units. However, applications for new building permits, seen as an indicator of future activity, fell 4.9 percent to 621,000 units.

Industrial production at the nation’s factories, mines and utilities increased 0.9 percent in January, following an upwardly revised 0.7 percent gain in December. It was the seventh consecutive monthly increase. The overall factory-operating rate rose to 72.6 percent of capacity in January from 71.9 percent in December.

The producer price index, which tracks wholesale price inflation, rose 1.4 percent in January, following an upwardly revised 0.4 percent increase in December. Economists had expected a gain of 0.8 percent. The gains were largely because of higher energy costs.

Initial claims for unemployment benefits rose by 31,000 to 473,000 in the week ending Feb. 13. Continuing claims for the week ending Feb. 6 held steady at 4.538 million. Experts believe snowstorms in early February may have cost the economy as many as 100,000 jobs.

The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose a smaller-than-expected 0.3 percent in January after a revised 1.2 percent gain in December. It was the 10th straight monthly increase and the longest series of gains since 2004.

Consumer prices rose 0.2 percent in January. Excluding energy and food, the so-called core index unexpectedly slipped 0.1 percent, the first monthly decline since December 1982.

The Federal Reserve Board raised the discount rate charged to banks by a quarter-point to 0.75 percent.

— Craig Greene is a senior loan officer at Prospect Mortgage, 3916 State St., Suite 100, Santa Barbara 93105. He can be reached at .(JavaScript must be enabled to view this email address) or 805.898.4211.

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