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Housing starts fell 5.0 percent in June, as the expiration of the homebuyers’ tax credit led to a pullback in new building. Single-family starts slipped 0.7 percent. Permits for multi-family, however, rose 19.6 percent.

The National Association of Home Builders/Wells Fargo Housing Market Index declined for the second consecutive month in April to its lowest level in over a year as homebuilders remained less confident about housing market conditions. The downward trend in builder sentiment, mortgage applications, sales, permits and starts continues to suggest residential construction will likely fall this summer.

By Wells Fargo Research

Retail sales fell slightly more than expected in June, with overall sales declining 0.5% and sales excluding motor vehicles declining 0.1%. The weakness was not totally unexpected as several weekly sales measures have been posting declines for much of the past two months and consumer confidence and buying plans both fell sharply in June. The loss of momentum is most apparent in the three-month rate of growth, which has slowed to a 4.1% pace for overall sales and just a 2.7% pace for sales excluding motor vehicles.

Sales at motor vehicle dealers fell 2.3% following a 0.6% drop in May. The major motor vehicle manufacturers recently announced they would keep assembly plants operating throughout the summer, as sales were reported to be robust and inventories were reported to be in line with demand or possibly even a bit tight. This morning’s sales figures cast some doubt on these predictions and raise the possibility that we may see an unintended build in inventories this summer that requires more extensive sales incentives or production cutbacks to clear out inventory.

The one big gainer for the month was electronics stores, where sales jumped 1.3 percent, following a 0.9 percent jump in May. The increases likely reflect the introduction of a number of new smartphones, most notably the newest iPhone, which debuted in June.

Ouch! Employment in the U.S. fell in January by a three-decade high, bringing total job losses since December 2007—when the recession started—to 3.6 million. Half of those losses occurred in the last quarter alone, and the stepped-up pace of layoffs in recent months suggests no end in sight to the economic downturn. 

Nonfarm payrolls tumbled 598k in January, the most since December 1974 and well above the 525k drop economists expected. December was revised to show an even steeper decline of 577k. 

President Obama has warned of possible double-digit unemployment if the government does not act quickly, and the head of his Council on Economic Advisers used the new numbers to reemphasize the point.