Economy

Economic Data Roundup (02/16/2018)

2/16/18 12:00 PM

iStock-144280696.jpgThere were two important reports on the U.S. economy released this morning. First, privately-owned housing starts in January grew at a seasonally adjusted annual rate of 1.326 million units, according to new data from the U.S. Census Bureau. That was a 9.7 percent increase from December’s upward-revised print and a much better rebound than economists expected. Most of the strength was due to a 19.7 percent jump in multi-family starts (rentals), but single-family housing starts also posted a solid 3.7 percent gain. Regionally, housing starts fell in the Midwest (-10.2 percent) and rose in the Northeast (45.5 percent), the West (10.7 percent), and the South (9.3 percent). As for building permits, this metric of future construction activity also improved last month, which agrees with the elevated level of homebuilder optimism recorded by the NAHB. Chairman Randy Noel added that “Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth. However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases.”

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Elsewhere, consumer confidence firmed this month, according to a new report from the University of Michigan. Specifically, the headline sentiment gauge rose to 99.9 in February, the 2nd-highest reading of the current business cycle and much better than anticipated. Under the hood, Americans’ views of both current and future economic conditions improved this month, as recent “stock market gyrations” were overlooked due to “rising incomes, employment growth, and tax reform.” Moreover, favorable references to government policies were mentioned roughly six times more frequently by consumers this month than negative references to stock prices, and Survey of Consumers chief economist Richard Curtin added that “Purchase plans have been transformed from the attraction of deeply discounted prices and interest rates that outweighed economic uncertainty, to being based on a sense of greater income and job security as the fewest consumers in decades mentioned the favorable impact of low prices and interest rates. Overall, the data signal an expected gain of 2.9% in real personal consumption expenditures during 2018.”

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Sources: Econoday, Census Bureau, NAHB, UoM, FRBSL

Post author: Charles Couch