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Construction: Not Good, But Getting Better

Here's this theme again: The economy's getting better, but it's still pretty bad.

It's true for jobs: The economy's adding jobs every month, but there are still far fewer jobs than there were before the recession, and unemployment is still high.

It's true for the overall economy: GDP is growing, but it's still below where it was two years ago.

And it's true for the construction business, a key source of jobs that rose with the boom and fell with the bust.

Construction on new houses and apartment units hit an annual rate of 672,000 in April, the government said today. That was the most for any month since October, 2008.

But things have been very bad indeed since October, 2008; starts fell to an all-time low last year, and the level of construction activity is still very low by historical standards. (This chart from Calculated Risk shows starts going back to the 1970s.)

What's more, the number of building permits issued for new housing units actually fell between March and April.

Housing starts are a measure of actual construction work, which comes after builders get the permits they need. So the decline in permits suggests that the growth in housing starts may falter in the coming months.

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Correction: An earlier version of this post identified the housing starts number as the monthly, rather than annual, rate.