The Commerce Department reported today that housing starts fell 1 percent to a seasonally adjusted annual rate of 581,000 units, well below market expectations for 600,000 units. June’s housing starts were revised up to 587,000 units from the previously reported 582,000 units.

Multifamily unit starts tumbled 13.3 percent in July. However, groundbreaking for single family homes — the worst-hit part of the housing market, rose 1.7 percent to an annual rate of 490,000 units, the highest since October.

Compared to July last year, housing starts dropped 37.7 percent.

New building permits, which give a sense of future home construction, fell 1.8 percent to 560,000 units in July. That compared to analysts’ forecasts for 580,000 units. Compared to the same period a year-ago, building permits declined 39.4 percent.

The inventory of total houses under construction fell to record low 609,000 in July, the department said, while the total number of permits authorized but not yet started also hit a record low at 102,300.

Real average weekly earnings rose by 0.4 percent from June to July 2009. This increase stemmed from a 0.3 percent increase in average weekly hours and a 0.2 increase in average hourly earnings. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was unchanged.  Over the year real average weekly earnings increased 3.5 percent.

Businesses reduced inventories for a 10th straight month in June, although total business sales posted the first increase in nearly a year.

The Commerce Department reported that businesses cut stockpiles 1.1 percent in June, slightly larger than the 0.9 percent drop economists expected. The reductions have translated into sharp production cutbacks at factories, adding to the steep recession.

But in an encouraging sign for the future, the government says business sales at all levels rose 0.9 percent in June after being flat in May. It marked the first increase in total sales since July 2008.

Productivity increased 6.4 percent in the nonfarm business sector during the second quarter of 2009 as unit labor costs fell 5.8 percent (seasonally adjusted annual rates).  In manufacturing, productivity increased 5.3 percent while unit labor costs rose 0.5 percent.

 The U.S. trade deficit edged up slightly in June as imports rose for the first time in 11 months, another sign that the worst recession since World War II is beginning to loosen its grip on the economy.

The Commerce Department reported today that the deficit rose 4 percent to $27 billion, from May’s $26 billion. The May imbalance had been the lowest deficit in nearly a decade.

The bigger June deficit reflected an increase in imports for the first time in nearly a year, an indication that demand in the U.S. is starting to revive. Read the rest of this entry »