{"id":1528,"date":"2019-05-16T10:16:11","date_gmt":"2019-05-16T14:16:11","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1528"},"modified":"2019-05-16T10:16:11","modified_gmt":"2019-05-16T14:16:11","slug":"april-housing-starts-may-philadelphia-fed-manufacturing-survey-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1528","title":{"rendered":"April Housing Starts, May Philadelphia Fed Manufacturing Survey and Weekly Jobless Claims"},"content":{"rendered":"\n

KEY DATA:<\/strong> Starts: +5.7%; 1-Family:\n+6.2% Permits: +0.6%; 1-Family: -4.2%\/ Phil. Fed: +8.1 points; Orders: -4.7\npoints\/ Claims: -16,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe housing market is coming back a little,\nanother sign the economy continues to expand at a decent pace.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  If you believe the bond market, where rates\nhave been plummeting, you would think that the economy is in deep trouble.  But that is just not the case.  Housing starts rebounded in April<\/em><\/strong>,\nwhich really should not have surprised anyone. \nThe levels we had been seeing over the previous two months were way\nbelow where they should have been.  Why\ndo I say that?  Because permit\nrequests, which also rose, had been and still are running above the level of\nactual construction.  That had to change\nand there still is more to come.<\/em><\/strong> \nFor the past three months, permits have averaged nine percent more than\nstarts, which means there is a backlog of construction that will likely be filled in the\nnext few months.<\/em><\/strong>  In\nApril, construction activity showed what was likely the effects of\nweather.  Starts skyrocketed by 85% in\nthe Northeast and by 42% in the Midwest, but fell by roughly 5.5% in both the\nSouth and the West.<\/em><\/strong>  Wet weather\nmay play havoc with activity in May, so any result should be viewed\naccordingly.  One issue for the economy\nthat comes out of this report is that the number of homes under construction\ndeclined for the third consecutive month.  Building activity is what really matters for\neconomic growth and right now, that is softening. <\/em><\/strong><\/p>\n\n\n\n

On the manufacturing front, conditions there may be\nfirming a little as well.  The\nPhiladelphia Fed\u2019s survey of regional manufacturing activity jumped in early\nMay.<\/em><\/strong>  Keep in mind, this measure is wildly\nvolatile, so the surge we saw was not really out of the ordinary.  Indeed, the details don\u2019t consistently argue that\nconditions are improving significantly.  For\nexample, while employment improved a touch, new orders expanded at a less rapid\npace.<\/em><\/strong>  Looked forward,\nexpectations were largely the same, though firms are thinking that hiring may\npick up.  As for inflation, which was in\nthe special question section, firms say their prices may rise a little less\nthan had been thinking in February, but that overall consumer inflation would\nrun a little hotter.  <\/p>\n\n\n\n

Jobless claims declined back to more typical, at\nleast for this tight labor market, last week. \n <\/em><\/strong>MARKETS AND FED\nPOLICY IMPLICATIONS:<\/strong>  In a\nnormal world, where it is all about the economy, concerns should be\nminimal.  However, this is not a normal\nworld.  Fighting a full-fledged trade war\nwith China and a shooting war with Iran at the same time should be enough to\nunnerve investors.  But it appears as if\nmany don\u2019t believe that will be the situation.<\/em><\/strong>  How else can you explain the cratering and\nunwinding of that decline that has occurred over the past week?  Maybe investors are starting to understand\nthey are mere puppets and the strings are being pulled by the tweeter in\nchief?  I make that statement not because\nI think those risks are not real; I believe they are.  But at some point, you have to start seeing\nit to believe it.  And then you have to determine\nthe extent to which the economy will be harmed. \nRight now, it is all fear and little analysis, so expect volatility to\nhold sway. As for the Fed, the uncertainty plays right into its hands.<\/em><\/strong>Why do anything until you know what\ndirection policy will take us?  <\/em><\/strong>The\ndifficulty, though, is that economic data tend to tell us what happened or is\nhappening, not necessarily what will happen. \nBeing data dependent in an uncertain world where the data \u2013 and the\nmarkets – can be whipped around is an awfully risky approach to take. <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Starts: +5.7%; 1-Family: +6.2% Permits: +0.6%; 1-Family: -4.2%\/ Phil. Fed: +8.1 points; Orders: -4.7 points\/ Claims: -16,000 IN A NUTSHELL:  \u201cThe housing market is coming back a little, another sign the economy continues to expand at a decent pace.\u201d WHAT IT MEANS:  If you believe the bond market, where rates have been plummeting, … Continue reading April Housing Starts, May Philadelphia Fed Manufacturing Survey and Weekly Jobless Claims<\/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":[1],"tags":[],"class_list":["post-1528","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1528","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=1528"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1528\/revisions"}],"predecessor-version":[{"id":1529,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1528\/revisions\/1529"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}