{"id":1481,"date":"2019-03-26T10:16:09","date_gmt":"2019-03-26T14:16:09","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1481"},"modified":"2019-03-26T10:16:09","modified_gmt":"2019-03-26T14:16:09","slug":"february-housing-starts-january-housing-prices-march-consumer-confidence-and-philadelphia-fed-non-manufacturing-index","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1481","title":{"rendered":"February Housing Starts, January Housing Prices, March Consumer Confidence and Philadelphia Fed Non-Manufacturing Index"},"content":{"rendered":"\n

KEY DATA:<\/strong> Starts: -8.7%; Permits:\n-1.6%\/ Prices (National, Over-Year): +4.3%; Over Month: +0.2%\/ Confidence: -8.9\npoints\/ Phil. Fed (NonMan.): +11.7 points; Orders: +8 points<\/p>\n\n\n\n

IN A NUTSHELL:<\/strong> \u00a0\u201cSome segments of the economy may be starting to improve from the early year slump, but you cannot say the same thing for housing.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  We are closing in on the end of the first\nquarter and the data are coming in somewhat less negative than they had been.<\/em><\/strong>  I am not saying the economy rebounded in\nMarch, but at least the general malaise eased. \nThat cannot be said about residential real estate.  Housing starts crumbled in February <\/em><\/strong>and\nso far this year, new building activity is down nearly nine percent.  This pace was well below expectations. Activity\nwas down sharply in three of the four regions, with only the Midwest posting a\ngain. <\/em><\/strong> But that came after an\nincredibly weak January, so weather was likely the major factor there.  Will housing come back?  It just may, at least a little.  While permit requests also faded, they are\nstill running well above the level of starts and builders don\u2019t like to pay for\nthe permits for no reason at all.  So,\nlooks for starts to improve over the next few months.  <\/em><\/strong><\/p>\n\n\n\n

But don\u2019t look for construction to surge.  Home price increases are continuing to\ndecelerate.  While the S&P CoreLogic\nCase-Shiller national index edged upward a touch in January, the rise over the\nyear eased again. <\/em><\/strong> The increase\nwas the smallest since April 2015.<\/em><\/strong> \nFour years tends to indicate a trend. \nSimilar decelerations have been seen in all the other major home price\nindices.  That points to a softening in\ndemand, especially since supply is not booming.<\/p>\n\n\n\n

As for the consumer, they are happy but hardly\njumping for joy.  The Conference Board\u2019s\nConsumer Confidence Index dropped sharply in March as both the current\nconditions and expectations components were off.  This was a disappointing report as confidence\nwas expected to rise a little.<\/p>\n\n\n\n

Meanwhile, it looks like services activity may be\nrecovering<\/em><\/strong>.  The Philadelphia Fed\u2019s Non-Manufacturing\nIndex popped in March, led by strong gains in new orders, sales and backlogs.<\/em><\/strong>  Firms were back in hiring strongly, but they\nare being forced to pay more for their workers. <\/em><\/strong> The only disappointing part of the survey was\nin the investment numbers, which are mediocre at best.  Small service providers may have gotten tax\nbreaks but they have likely used it to hire and\/or just stay in business.<\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  The\neconomy is not falling apart.  It is also\nnot booming.  Thursday we get the\nrevisions to fourth quarter GDP and they are likely to show that growth was\nsofter than the 2.6% gain initially estimated<\/em><\/strong>.  Look for something in the 2.25% range.  This quarter is currently coming in below 2%\nand could be pushing the 1% level.<\/em><\/strong> \nWhile a rebound in the spring and summer is hardly out of the question, those\ngrowth rates will likely be more in the 2.5% range than 3% or more.   Essentially,\nthe\nsugar high is just about over and we are back to normal growth.  But the risks are more toward the downside\nthan the upside.  <\/em><\/strong>Consumers are\nfeeling fine, not great, and the tight labor markets are helping them grow\ntheir paychecks.  Nevertheless, they are\nnot buying big-ticket items, so don\u2019t expect spending to surge.  Firms have shown little interest in investing\nheavily. The sugar-daddy federal government is running out of lollipops as the\ndeficit should near one trillion dollars this fiscal year and break it next\nyear.  And the world economy is in a\nglobal slowdown.  Even the delivery of\nthe Mueller Report didn\u2019t create any investor exuberance, so what\nwill cause growth to accelerate is beyond me, so investors need to start\nfocusing on what an economy that mirrors the 2011-2016 period means, but one\nthat no longer has the Fed pumping huge amounts of liquidity into the\nsystem.  <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Starts: -8.7%; Permits: -1.6%\/ Prices (National, Over-Year): +4.3%; Over Month: +0.2%\/ Confidence: -8.9 points\/ Phil. Fed (NonMan.): +11.7 points; Orders: +8 points IN A NUTSHELL: \u00a0\u201cSome segments of the economy may be starting to improve from the early year slump, but you cannot say the same thing for housing.\u201d WHAT IT MEANS:  We … Continue reading February Housing Starts, January Housing Prices, March Consumer Confidence and Philadelphia Fed Non-Manufacturing Index<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1481","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1481"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1481\/revisions"}],"predecessor-version":[{"id":1482,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1481\/revisions\/1482"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}