{"id":403,"date":"2014-12-16T08:41:22","date_gmt":"2014-12-16T13:41:22","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=403"},"modified":"2014-12-18T13:41:50","modified_gmt":"2014-12-18T18:41:50","slug":"november-housing-starts-and-permits","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=403","title":{"rendered":"November Housing Starts and Permits"},"content":{"rendered":"

KEY DATA:<\/span><\/strong> Starts: -1.6%; 1-Family: -5.6%; Multi-Family: +6.7%; Permits: -5.2%; 1-Family: -1.2%; Multi-Family: -11%<\/p>\n

IN A NUTSHELL:<\/span><\/strong> \u00c2\u00a0\u00e2\u20ac\u0153The housing sector may not be restraining growth, but it is hardly adding much to it.\u00e2\u20ac\u009d <\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/span><\/strong> \u00c2\u00a0The housing sector is neither too hot nor too cold.\u00c2\u00a0 But that doesn\u00e2\u20ac\u2122t make it just right.\u00c2\u00a0 Activity is improving, but in fits and starts<\/em><\/strong> – pardon the pun.\u00c2\u00a0 Construction activity eased in November<\/em><\/strong> but that came after an upward revision to the October housing starts numbers.\u00c2\u00a0 That had come in as a decline but is now put at a modest rise.\u00c2\u00a0 The issue in November was single-family construction, which was off sharply.\u00c2\u00a0 This component is bouncing around but the trend has been upward, even if it is not a steep slope.<\/em><\/strong>\u00c2\u00a0 The multi-family number rose sharply, but large changes is usual for this very volatile number.\u00c2\u00a0 So far this year, housing starts are up over 8% compared to the first eleven months of 2013<\/em><\/strong>, so it is hard to complain about the housing sector.\u00c2\u00a0 Looking forward, permit requests were off <\/em><\/strong>but again, the multi-family segment drove the rise.\u00c2\u00a0 Permits are running only a little above starts for the last two months and that points to minimal gains in construction activity in the coming months.\u00c2\u00a0\u00c2\u00a0 <\/em><\/strong><\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/span><\/strong> So far this quarter, starts are up at a little less than 3% annualized pace from the third quarter. \u00c2\u00a0It looks like housing could add to growth again, but unless there is a lot more activity in December, any addition will be relatively modest.<\/em><\/strong>\u00c2\u00a0 Nevertheless, I will take it.\u00c2\u00a0 With oil prices plummeting, there is every reason to expect that consumer spending will be strong this quarter.<\/em><\/strong>\u00c2\u00a0 Indeed, my forecast calls for another quarter of GDP growth in excess of 3.5%, which would make it five out of the last six.\u00c2\u00a0 Yesterday\u00e2\u20ac\u2122s November industrial production number was really strong.\u00c2\u00a0 So far this quarter, manufacturing output is growing at a robust 4.4% annualized pace<\/em><\/strong> and that could rise with any decent increase in December.\u00c2\u00a0\u00c2\u00a0 Job gains have been strong and we got our first glimpse at solidly rising wages.\u00c2\u00a0 Yes, Europe and Japan are worries and some countries are being battered by the low price of oil.\u00c2\u00a0 In spite of that, the U.S. economy is on an accelerating growth path that should continue for quite some time.\u00c2\u00a0 We don\u00e2\u20ac\u2122t need a robust housing market to drive growth.<\/em><\/strong>\u00c2\u00a0 There are other sectors, including consumer spending and non-energy investing that should be strong enough to keep the economy moving forward solidly.\u00c2\u00a0 So why are investors so negative?\u00c2\u00a0 Remember, Wall Street and Main Street are so totally disconnected that we cannot go directly from the economic data to market performance.\u00c2\u00a0 Declining oil prices may be wonderful for the macro economy but if it hurts certain members of a stock index, then you get a decline.\u00c2\u00a0 Ultimately, when it is clear how much additional growth and earnings we will get from an extended period of low energy costs, the markets should reflect that reality<\/em><\/strong>.\u00c2\u00a0 And that is what I expect the Fed to talk about when the FOMC statement is released tomorrow.<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Starts: -1.6%; 1-Family: -5.6%; Multi-Family: +6.7%; Permits: -5.2%; 1-Family: -1.2%; Multi-Family: -11% IN A NUTSHELL: \u00c2\u00a0\u00e2\u20ac\u0153The housing sector may not be restraining growth, but it is hardly adding much to it.\u00e2\u20ac\u009d WHAT IT MEANS: \u00c2\u00a0The housing sector is neither too hot nor too cold.\u00c2\u00a0 But that doesn\u00e2\u20ac\u2122t make it just right.\u00c2\u00a0 Activity is … Continue reading November Housing Starts and Permits<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,18],"tags":[],"class_list":["post-403","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-housing-starts"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/403","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=403"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/403\/revisions"}],"predecessor-version":[{"id":404,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/403\/revisions\/404"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}