By the Numbers
Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.
The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.
In fact, all of last month’s gains occurred in the critical single-family-starts component, and these were actually revised upward with today’s news. The single-family data are summarized in the accompanying chart. As seen there, even with the November decline, single-family starts are still well above the prevailing levels of the last two years.
…And that is actually the suspicious part. As the chart makes clear, there has not as yet been any accompanying increase in single-family permits to indicate that the higher starts levels will be sustained. The recent increases look very much like those of late-2013—gains that turned out to be a flash in the pan.
Still, there is nothing in the recent housing data to suggest any downside risks there. Single-family activity is at worst stable, as it has been for the last two years. Multi-family activity stabilized early this year, after having risen through 2013, but here too, there are no downside indications to provide worry signs. Finally, the data by region look much the same: stable in the Northeast, Midwest, and West, with sporadic (temporary?) gains in the South.
So, we have a probably stable level of homebuilding alongside recent improvements in payroll job growth, retail sales, and manufacturing production. Once again, on balance, the data have been better lately. We’ll have to see whether that improvement lasts and whether it finally carries over to financial market pricing. For now, both Treasury bond yields and stock prices are lower on the month despite the news.
Michael BazdarichProduct Specialist/Economist
Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.
Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.
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