Hello, I'm Mark Pearson. Construction of new homes and apartments fell precipitously last month, but a concurrent rebound in single-family home building raised hopes this week that the three-year slide in housing could be nearing the bottom.
According to the Commerce Department, new housing starts fell nearly 13 percent in April to their lowest level in 50 years. The drop reflected a 46 percent plunge in construction of multifamily units and indicated homebuilding remains a drag on the economy. However, single-family housing starts rose nearly 3 percent, signaling that the more important sector of home construction is beginning to stabilize.
Meanwhile, The Conference Board announced this week its index of leading economic indicators, designed to forecast activity in the next three to six months, rose 1 percent in April marking its first gain in seven months.
Many analysts believe the recession will end sometime in the second half of this year but expect the nation's unemployment rate -- now at a 25-year high of 8.9 percent, to keep rising into 2010.
It's not uncommon for the rural sector also to lag behind the broader economy during recoveries. And key developments this week revealed the longest recession since World War II is making an impact in farm country.
The economic pulse of Rural America is still strong but may be weakening in the face of a widespread global recession. A slough of financial data from government agencies, banks, and private industry show some dark economic clouds hanging over America's farmers and ranchers.
Financial lending restrictions on agricultural loans in the Midwest have tightened according to the Federal Reserve Bank of Kansas City. The regional Fed Bank says its quarterly survey discovered a record high percentage of lenders raising collateral requirements for agriculture. Additional data showed agricultural loan repayments fell for the second straight quarter.
Tighter credit markets may be hampering some the nation's largest farm equipment manufacturers. Deere and Co., the world's largest maker of farm equipment, said this week its 2nd quarter profit dropped 38 percent. Citing a global recession and lower crop prices, Deere and Co. also downgraded its 2009 profit outlook by 27 percent.
While much of the global recession has centered on the home foreclosure crisis in urban America, new data from the Bureau of Labor Statistics shows rural sectors may be worse off.
Citing Labor Department data, a recent University of Missouri Rural Policy study indicates unemployment in rural counties is growing more than 20 percent faster than metropolitan counties.
Speaking to farmers in Missouri recently, USDA Secretary Tom Vilsack acknowledged problems in rural sectors. Vilsack added that expanding the biofuels market could stimulate the economic engine of Rural America.