WASHINGTON -- Home builders took a breather in June, sending housing construction down to its lowest level in just over a year. It was another sign the economy slowed last month.
The number of housing projects launched by builders clocked in at a seasonally adjusted annual rate of 1.80 million units, an 8.5 percent drop from May's level, the Commerce Department reported yesterday.
Although the 1.80 million pace was the lowest since May 2003 and was weaker than economists expected, it still represented a respectable level of activity, analysts said.
Housing construction in May rose by 0.4 percent from the previous month, according to revised figures. That turned out to be stronger than the decline previously estimated.
Yesterday's report is consistent with other economic data -- including retail sales, the nation's employment situation, and industrial production -- that suggested the economy hit a rough patch in June. Analysts, however, are confident that's just a temporary lull, rather than a sign of trouble ahead for the economic recovery.
At the time, there was speculation as to whether the Federal Reserve would raise interest rates by a modest one-quarter percentage point or a bolder, half-point move. Fed policy makers on June 30 boosted interest rates for the first time in four years by one-quarter point to 1.25 percent from a 46-year low of 1 percent, a move aimed at keeping inflation at bay.