WASHINGTON — Homebuilders are sending a message: They won’t be able to contribute much to the economic recovery now that government homebuying incentives have vanished.
Home construction and applications for building permits sank in May, overshadowing favorable reports on manufacturing and wholesale inflation.
Fewer homes mean fewer jobs. Construction fuels a broad swath of industries across the economy. Yet double-digit unemployment is among the main reasons people have passed on buying new homes.
“The economy is growing and the housing market is still in recession,” said Eugenio Aleman, senior economist with Wells Fargo Securities.
Overall, new home and apartment construction fell 10 percent in May to a seasonally adjusted annual rate of 593,000, the Commerce Department said Wednesday. April’s figure was revised downward to 659,000.
Applications for new building permits sank 5.9 percent to an annual rate of 574,000.
Output at the nation’s factories, mines and utilities climbed 1.2 percent in May, the Federal Reserve said Wednesday. Factory production rose 0.9 percent. Utility production jumped 4.8 percent, thanks to warm weather that prompted people to crank up their air conditioners.
Wholesale prices actually fell for a second straight month in May. But the 0.3 percent dip was pulled down by a 7 percent drop in gasoline prices and a 7.4 percent fall in home heating-oil prices.
