Home builders, Manufacturing Sector, Oil Prices
February 16, 2016
Tuesday – February 16
Home builder sentiment slipped a bit in February due to the high costs and lack of availability of lots and labor, though the reading still remains positive. The National Association of Home Builders Housing Market Index fell three points to 58 in February, below the 60 expected and down from 60 in January. Any number over 50 indicates that more builders view conditions as good than poor. Builders have expressed optimism that sales will pick up in the coming months.
The manufacturing sector continues to underperform the rest of the economy due to a stronger dollar, which makes goods pricier along with weak demand from overseas. The Empire State Manufacturing Index has come in at -16.64 in February, well below the -9.9 expected, but above the -19.4 registered in January. This was the seventh straight month of contractions. Within the report it showed that the number of employee’ index improved, though overall employment remained relatively the same.
Oil prices continue to drift lower, despite a proposed freeze in production from Russia, Saudi Arabia, Qatar and Venezuela. Oil prices have sunk 70% since June 2014 due to oversupply and lower demand. The price of West Texas Intermediate fell to $28/barrel in New York trading. A freeze in production is unlikely, says oil analyst Tom Kloza of the Oil Price Information Service. “People recognize that getting those four parties together and actually having a production freeze is a little bit like getting Johnny Manziel and Charlie Sheen to pledge to live very, very clean lives for the next few years,” said Kloza.