The Busheconomy is still sucking wind. Witness last week’s 12% increase in new unemployment claims.
In the week ending Jan. 20, the advance figure for seasonally adjusted initial claims was 325,000, an increase of 36,000 from the previous week’s revised figure of 289,000. The 4-week moving average was 309,250, an increase of 1,500 from the previous week’s revised average of 307,750.
Then there’s the busted housing bubble.
Sales of new homes plunged in 2006 by the largest amount in 16 years as the nation’s housing industry suffered through a sharp contraction after five boom years.
The Commerce Department reported that sales of new single-family homes totaled 1.06 million units for all of 2006, down 17.3 percent from the all-time high for sales of 1.28 million units set in 2005.
After setting sales records for five straight years, sales of both new and existing homes suffered sharp declines last year, and that has caused ripple effects throughout the whole economy.
Last year’s plunge in new home sales was the biggest drop since a 17.8 percent drop since the recession year of 1990. Sales of existing homes fell by 8.4 percent to an annual rate of 6.48 million units, it was reported Thursday. That was the biggest decline in the sale of previously owned homes since 1989.
Economists believe the housing industry will undergo further downward pressure this year as builders continue to slash production in an effort to get control of near-record levels of unsold homes.