The number of U.S. privately-owned housing units authorized by building permits in January 2012 totaled a seasonally adjusted 676,000, an impressive 19% increase from 568,000 in January 2011 and 0.7% more than the 671,000 reported in December 2011.

Single-family authorizations in January 2012 totaled 445,000, up 6% from 419,000 in January 2011 and up 0.9% from the the revised December 2011 figure of 441,000. Authorizations of units in buildings with five units or more equaled 208,000 in January 2012,  a significant 61% increase from 129,000 in January 2011 and a roughly 1% increase from 206,000 in December 2011.

Housing Starts Rise 10% Y-O-Y

Privately-owned housing starts in January 2012 occurred at a seasonally adjusted annual rate of 699,000, which was 9.9% higher than 636,000 in January 2011 and 1.5% higher than 689,000 in December 2011. There were 508,000 single-family housing starts in January 2012, 16% higher than 437,000 in January 2011 but 1% less than 513,000 in December 2011  The January rate for units in buildings with five units or more was 175,000, 6% less than 187,000 in January 2011 but 14% more than 153,000 in Dcember 2011.

Housing Completions Fall 12% Y-O-Y

There were 530,000 seasonally adjusted privately-owned housing completions in January 2012, about 4% more than the 509,000 recorded in January 2011 but 12% less than 602,000 in December 2011.This total figure included 389,000 single-family housing completions, about 7% below 417,000 in January 2011 and also 15% below the December 2011 rate of 457,000. The January 2012 rate for units in buildings with five units or more was 136,000, up a strong 58% from 86,000 in January 2011 and flat with the rate in December 2011.

Sources: U.S. Census Bureau and the Department of Housing and Urban Development

The advance figure for seasonally adjusted initial unemployment claims the week of February 11, 2012, totaled 348,000, a decrease of 13,000 from a revised estimate of 361,000 the week of February 4, 2012. This marked the lowest weekly level of initial unemployment claims since March 2008. The seasonally adjusted four-week moving average also showed a mild decline, dropping from 1,750 from a revised estimate of 367,00 to 365,250.

Insured Unemployment Figures Also Decline

Looking at seasonally adjusted unemployment figures, the advance seasonally adjusted unemployment rate the week of February 4 was 2.7%, a fractional decrease from 2.8% the week of January 28, 2012. In addition, the advance seasonally adjusted total number of insured unemployed people dropped about 3%, from 3.526 million to 3.426 million. The four-week moving average decreased fractionally from a revised 3.5 million to 3.492 million.

More File Actual Claims, But Total Drops More

The actual (unadjusted) number of initial unemployment claims the week of February 11, 2012 was a slightly higher 397,810. However, there was also a larger drop of 39,328 from the previous week’s unadjusted total of 422,287. The advance unadjusted unemployment rate the week of January 28, 2012 was 3.2%, unchanged from the prior week’s unrevised rate.

Fewer Federal Employees, More Vets File Initial Claims

A total of 1,696 former federal civilian employees filed initial unemployment claims the week of January 28, a roughly 3% drop from 2,172 the prior week. However, there were 2,843 initial claims from newly discharged veterans, a 16% jump from 2,448 the previous week.

California Sees Highest Initial Claims Growth

The largest increases in initial claims for the week ending January 28 were in California (+4,571), Washington (+2,795), Florida (+2,293), Texas (+1,485), and Oregon (+1,420), while the largest decreases were in Tennessee (-1,855), Connecticut (-1,523), Oklahoma (-1,353), Alabama (-1,297), and North Carolina (-1,221).

Source: US Department of Labor

The industrial production index recorded a score of 95.9 for the second straight month in January 2012, according to estimates from the Federal Reserve. Among major industry groups tracked as part of the industrial production index, the manufacturing index climbed 0.7% month-over-month, from 92.8 to 93.5. However, the mining index declined 1.8%, from 112 to 110, while the utilities index dropped 2.5%, from 98 to 95.6.

Major Market Groups Show Mixed Results

Major market groups tracked as part of the larger index displayed varying performance, with final products, business equipment, and nonindustrial supplies all reporting small month-over-month gains, while consumer goods, construction, and materials all reported minor declines. The final product index climbed 0.4%, from 97.2 to 97.7, while the business equipment index rose 1.8%, from 102.5 to 104.4, and the nonindustrial supplies index increased 0.2%, from 85.5 to 85.7.

In contrast, the consumer goods index fell 0.1%, from 94.3 to 94.2, while 0.4% declines were reported by both the construction index (79.2 to 78.9) and the materials index (98.2 to 97.8).

Industry Capacity Utilization Falls Slightly

Total industry capacity utilization fell slightly, from an index score of 78.6 in December to a score of 78.5 in January. However, manufacturing capacity increased 0.6%, from 76.5 to 77. This was offset by a 2% decline in mining capacity (93.5 to 91.5) and a 3% decline in utilities capacity (76.7 to 74.6).

Looking at stage-of-process group performance, the crude index dropped 1% (90.9 to 89.9) and the primary and semi-finished index dropped by 0.5% (75.3 to 74.9), but the finished index rose 1% (77.3 to 78.1).

Weekly domestic raw steel production increased 1.2% to 1.929 million tons (mt) for the week ending February 11, 2012, and was up 6.6% from the year-ago level. The highest production on record dating back to 2004 was 2.215 mt on May 13, 2006; the lowest was 0.8 mt on December 27, 2008.

Capacity utilization rose from 77.2% last week to 78.1% this week, which surpasses last year’s rate of 74.8%. However, this was significantly below the 94.7% rate recorded on January 15, 2005. Capacity utilization hit a low of 33.5% on December 27, 2008.

Source: AISI and Steel Market Intelligence

Seasonally adjusted advance estimates of US retail and foodservice sales in January 2012 totaled $404.1 billion, according to the US Census Bureau. This represents a 5.6% increase from $379.3 billion in January 2011 and more modest 0.4% increase from $399.9 million in December 2011.

Excluding motor vehicles and parts, total January 2012 retail and foodservice sales equaled $329.7 million, up 5.5% from $312.5 million in January 2011 and 0.7% from $327.4 million in December 2011. On their own, retail sales amounted to $358.8 million last month, up 5.5% from $339.9 million the prior year and up 0.3% from $357.5 million the prior month.

Strong Building Material Sales Growth Good for Steel Market With an 8.1% jump in sales from a year ago, building material and garden equipment and supplies dealers had the second-highest rate of year-over-year sales increase among the 13 retail categories tracked by the Census Bureau, reporting sales of $26 billion, a 0.2% increase from slightly less than $26 billion in December 2011.

Food services and drinking places edged out building material dealers with an 8.2% year-over-year sales increase, rising from $39.4 billion to $42.6 billion. Month-over-month, a much smaller 0.6% increase from $42.3 billion was recorded.

At the other end of the spectrum, electronics and appliance stores saw their monthly sales drop 0.6% year-over-year, from almost $8.3 billion to $8.2 billion. However, compared to December 2011, sales in the category rose 0.5% from slightly less than $8.2 billion. No other category reported a year-over-year decline in sales.

Source: US Census Bureau

The number of active oil and natural gas rigs in the United States dropped 0.4% to 1,989 for the week ending February 10, 2012, but was still up 15.6% compared to last year.

The highest weekly rig count in the United States since 1940 was recorded on December 28, 1981, at 4,530; the lowest was recorded on April 23, 1999, at 488.

The number of rigs in Canada this week decreased 0.2% from 710 last week to 709, but was 12.5% higher than year-ago levels.

The highest rig count for Canada was 727 on February 3, 2006; the lowest was 29, recorded on April 24, 1992.

Source: Baker Hughes Inc.

For the full report and our thoughts on this surprising pricing move, please contact us at info@steelmarketintelligence.com.

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According to trade press, domestic long product producers (including industry leader Nucor) are reversing January steel price moves effective immediately, as scrap price gains of $30/ton reversed themselves. Steel prices for beams and merchants are being reduced by the full $30/ton decline in the steel scrap surcharge (or 3-4%), while a $15/ton base steel price increase for rebar, will partially offset the surcharge drop, resulting in a smaller, net transaction steel price drop of $15/ton (or 2%).