Recent Figures Paint a Confusing Picture of the Economy

Recent economic figures regarding the amount of new homes being built as well as the amount of new jobless claims were recently released. Both typically figures serve as strong indicators about the well-being of the overall U.S. Economy. Often times economists predict the figures to be directly related, when housing starts to improve it is typically expected that  jobless claims fail (and vice-versa). However, for the recent set of numbers this was not the case. According to a recent article on CNBC:

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market recovery was gaining traction.

However, a separate report showed U.S. housing starts and building permits unexpectedly fell in June, suggesting the housing market recovery was struggling to get back on track after stalling in late 2013.

This data provides a confusing picture of the economy. As is stated above, the unemployment figures suggest a strengthening economy while the housing figures suggest that the economy is not growing as fast as many hoped.

It is important to note that both figures are in different sectors of the economy, housing and employment, which helps provides explanation for why they show different outlooks. Yet, as the overall economy is a combination of these different sectors, the fact that these numbers are competing perhaps shows that the growth in the economy is not happening as fast as many economists has hoped for. This perhaps means that consumers will continue to have to deal with some of the negative repercussions of an economy with slower growth than expected.

Read More- “US jobless queue shortens, but housing starts plunge sharply in July” (Reuters, CNBC)

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A rising senior at Colgate University, John is currently working as a research fellow with Consumers' Research.



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