The latest negative economic indicator comes from the housing sector. According to the Census Bureau and Department of Housing and Urban Development, residential construction fell by 3.1% (PDF) during the month of July.

Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 565,000. This is 3.1 percent (±2.0%) below the revised June rate of 583,000 and is 3.7 percent (±2.2%) below the July 2009 estimate of 587,000.

Single-family authorizations in July were at a rate of 416,000; this is 1.2 percent (±1.2%)* below the revised June figure of 421,000. Authorizations of units in buildings with five units or more were at a rate of 129,000 in July.

Single-family housing starts also slumped, falling 4.2% during the month of July.

Single-family housing starts in July were at a rate of 432,000; this is 4.2 percent (±8.7%)* below the revised June figure of 451,000. The July rate for units in buildings with five units or more was 95,000.

As Ed Morrissey points out, this development comes shortly after the National Association of Home Builders reported that confidence among home builders had dropped to the lowest level since March 2009. Few people are buying homes, jobs are scarce, and analysts predict housing prices will fall again later this year. None of which bodes well for the housing sector.

“Buyers just aren’t stepping up to the plate,” wrote Mike Larson, real estate analyst with Weiss Research. “Unless and until the job market improves, we are simply not going to get any traction in the housing market.”

The unemployment rate isn’t expected to drop by any significant amount anytime soon. In fact, even the White House is now talking about higher-than-historically-normal unemployment rates for several years to come.