April 20, 2016
The Census Bureau put out some pretty bad numbers on housing yesterday. March starts were down 8.8 percent from the February level and permits were down by 7.7 percent. The drop in starts was across categories and regions. There was no obvious weather-related factors to explain this drop.
Monthly housing data are erratic, but these numbers do deserve some attention. Residential construction is one of the few bright spots in an economy seeing weak consumption growth, stagnating equipment investment, and a rising trade deficit. If this is not just a one-month blip, it would be a very bad sign for the strength of the recovery.
In this respect it is worth noting that the latest number for first quarter growth from the Atlanta Fed ‘s “GDPNow” estimate is just 0.3 percent. This is not a good story.
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