This week's economic data lineup is compressed because of the President's Day holiday. The early focus will be on the housing market, as the National Association of Home Builders releases its monthly sentiment index at 10 a.m. Tuesday (all times Eastern). The January reading was unchanged at 47, remaining at the highest level since April 2006.
David Crowe, NAHB's chief economist, expects to see a steady rise in builder sentiment this year. "I think it will improve simply because the industry will continue to improve," he says. "We're not looking for dramatic growth, but steady growth." Last year's improvement in sentiment will be tough to match, Crowe says: "We'll not see the same rate of growth in 2013, but we'll still see growth."
Wednesday: Housing starts and permits
The Commerce Department releases January housing starts and building permits at 8:30 a.m. Wednesday. Both starts and permits are seen as key gauges for the home construction business. Kenneth Simonson, chief economist for The Associated General Contractors of America, says growth should continue until mid-year, when he expects a potential pause. He expects multifamily dwellings, such as apartments and condominiums, to fare better.
"There seems to be rapidly growing demand for home purchases and I believe that's inspiring builders to go ahead and start a lot more homes," says Simonson. He adds that the outlook is murky for the second half of the year, and he fears that the overall level of home sales could stall.
On multifamily construction, Simonson believes the outlook is brighter. He says, "I think multi-family construction and rentals will remain very strong all year long."
Simonson says that, if interest rates begin to rise, "that will tilt the calculation ... in favor of continuing to rent." He expects multifamily starts to keep growing throughout 2013 and probably beyond.
Thursday: Existing home sales and CPI
Shifting the focus from building to purchases of homes, at 10 a.m. Thursday we get the January existing home sales report from the National Association of Realtors.
The twin readings on inflation are due from the Labor Department this week. The producer price index, the government's main gauge of inflation at the wholesale level, is due at 8:30 a.m.Wednesday. The consumer price index, which measures inflation at the retail level, follows at 8:30 a.m. Thursday.
A forward-looking snapshot of the economy is due from The Conference Board. It issues the index of leading economic indicators at 10 a.m. Thursday. The index for December rose 0.5 percent, suggesting that a surge in growth could be on tap in the coming months.
This week in history
Friday marks the anniversary of a noteworthy, but perhaps largely forgotten event in the nation's business history. In 1878, Frank Woolworth opened the first Woolworth's store in Utica, N.Y. It would fail, but he tried again and succeeded in Lancaster, Pa., giving rise to the five-and-dime store craze. As the chain concept gained momentum, there were 100 stores by 1900. Woolworth's thrived in the discount retailing segment until would-be rivals like Wal-Mart stepped in. As its business declined, Woolworth's morphed into Venator Group and the Foot Locker athletic apparel store chain, which is still operating in the United States and elsewhere.