Tuesday, April 17, 2018

Notes on housing permits and industrial production for March 2018

 - by New Deal democrat

First, a quick note on housing permits and starts: obviously the overall numbers were very good. The overall uptrend remains intact, and March was lower than only January for the peak of this expansion for permits. The three month average of the more volatile starts number was the highest so far during this expansion. 

There is at least one issue which may indicate some stress building in the market -- or might just be noise.  Single family permits declined to the lowest level in half a year. Since multiunit housing (condos and apartments) is something of a substitute good, not infrequently that part of the market continues to rise after single family housing has peaked.

 I plan on a more detailed look tomorrow. Stay tuned.

Second, industrial production was also nicely positive, although the lion's share of that was mining and utilities. Manufacturing increased only +0.1:

Still, the meme that the "hard" manufacturing numbers haven't followed the "soft" ISM and regional Fed reports (ironically now that the regional Fed numbers are softening) ought to be dead. Since production is the ultimate "nowcast" number, this argues that in Q1 the economy turned in a decent performance.