Housing Starts Fall in December, but 2001 Was a Strong Year

Although U.S. housing starts declined 3.4% in December due to a plunge in the construction of apartments and other multifamily homes, 2001 turned out to be the third-best year for builders since 1987, the Commerce Department said Thursday.

Commerce said that a total of 1.603 million homes were started last year, compared with 1.569 million in 2000. Only in 1998 and 1999 did builders start more homes over the last 14 years.

Also Thursday, the Labor Department said that the number of workers filing new claims for unemployment benefits last week declined by 14,000 to 384,000, the lowest level in more than five months.

ousing construction can often be a boon to the trucking industry. Increased construction boosts demand for flatbed trucking companies to haul building materials and dry van freight companies can see a lift because of an increase in demand for delivery of household appliances and furniture.

A main reason for the strength in the housing sector is that low mortgage rates continue to attract buyers.

And in a sign that 2002 will remain strong, building permits, an indication of future activity, rose 3.6% in December to a 1.65 million annual rate.

Last month, homebuilders started work on 1.570 million homes, down from the revised 1.625 million- unit pace the previous month. Analysts had expected starts to decline to 1.61 million units, Bloomberg said.

The drop in unemployment claims came despite an increase in California, where the maximum weekly payment rose to $330 from $230 for initial applications made starting Jan. 6.

A Labor Department spokesman said seasonal adjustments for all of the U.S. anticipated a larger increase in applications last week, Bloomberg said. Because the increase was 140,000 instead of the 160,000 expected, the government reported a decline in claims.

The four-week moving average of claims fell to 411,000 from 411,250.

The Labor Department attributed the decrease in the seasonally adjusted first-time claims figure to seasonal factors. An official said they were expecting a much sharper rise in the unadjusted figures.

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