Make us your home page
Instagram

Housing remains main drag on economic recovery

WASHINGTON — American businesses and consumers are giving the economy a boost by spending more, but the troubled housing market remains an obstacle, new data show.

Businesses increased their stockpiles in every month last year, a sign that companies expect sales to remain healthy.

Still, the view of the housing market among home builders hasn't changed in four months, suggesting weak home sales will drag on the economy throughout the year.

Consumers bought more from retailers for a seventh straight month in January. The gains came despite snowstorms that limited spending from workers with more money in their paychecks from a Social Security tax cut.

Retail sales rose 0.3 percent last month to $318.6 billion, the Commerce Department said Tuesday. Sales have risen more than 14 percent from the recession low in December 2008, although January's number fell short of analysts' expectations.

People spent more at department stores and on electronics while also paying higher prices for gas. Online sales increased at a healthy pace.

Part of the overall retail sales gain last month reflected higher gasoline prices. Sales at gasoline service stations climbed 1.4 percent. Excluding the rise at gas stations, retail sales would have risen 0.2 percent last month.

Businesses appear to expect consumers will keep spending. Companies added to their stockpiles for a 12th consecutive month in December, the Commerce Department said. That suggests further growth at U.S. factories that could lead to more hiring in the months ahead.

Inventories rose 0.8 percent in December, and a full year of increases pushed the value of businesses' stockpiles to $1.44 trillion in December. That's a level that economists consider healthy.

Economists think inventories will keep rising as long as sales remain strong and businesses have confidence that the demand will continue. That should boost demand at U.S. factories, and ultimately lead to more jobs.

But those jobs are unlikely to come from home builders, who remain pessimistic after the worst year for new home sales in nearly a half-century.

The National Association of Home Builders said Tuesday that its index of builder sentiment remained unchanged in February for the fourth straight month at 16.

Any reading below 50 indicates negative sentiment about the market. The index hasn't been above that level since April 2006.

Also Tuesday, the Federal Reserve Bank of New York released data showing Americans are making substantial progress ridding themselves of debt. Compared to the summer of 2008, when consumer debt peaked, there is now 7 percent less mortgage debt, 12 percent less in auto loans, and 15 percent less credit card debt outstanding. Loan payments last year were at their lowest level in a decade.

Housing remains main drag on economic recovery 02/15/11 [Last modified: Tuesday, February 15, 2011 10:02pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.