Posted on 02/16/2024 7:02:15 AM PST by Kaiser8408a
Its as if the US economy is thunderstruck! US housing starts collapsed in January as Producer Prices soared. NOT a good sign for the US economy.
After single-family home starts plunged in December, analysts did not expect much of a bounce back in January as rates remain high and some regions were affected by weather.
Analysts were way off. Housing Starts puked 14.8% MoM in January (vs unchanged exp), but December’s 4.3% MoM decline was revised up to a 3.3% MoM rise. Building Permits also tumbled, down 1.5% MoM (vs +1.3% exp) and well down from the +1.8% MoM in December…
This pushed the Housing Starts SAAR back near post-COVID lows…
DO NOT BLAME THE WEATHER! It’s January – we know there are weather issues and that should be more than ‘priced-in’ on a seasonal adjustment basis.
Multi-family permits cratered to their lowest since Oct 2020. Permits for one-family homes edged higher after rising consistently throughout 2023
And multi-family starts were even worse, plunging from 489k SAAR to 314k SAAR – the lowest since May 2020 (when the economy was closed)…
The government’s report showed housing starts fell in all four of the nation’s regions, led by the Midwest and Northeast. The number of single-family homes completed plunged to the lowest level since May 2020.
And finally, there is a record gap between what the government tells us about construction employment and actual construction activity…
And then we have producer price spiking in January.
In fact, core PPI reached a new record high (reminder, disinflation does not mean lower prices), now up 17.4% since Biden was elected…
This is not good news for the disinflationistas. And it will stop President Biden’s narrative that ‘prices are coming down’…
Looks like the US economy is back in red.
(Excerpt) Read more at confoundedinterest.net ...
Multi family starts have been coming down for about a year.
There was a big push for a couple years to build apartments/condos everywhere. Now, there are done.
What is picking up is single family housing starts. However, they are not McMansions. The demand is there for smaller single family homes. Starter homes and retirement homes.
What there is a great need for is smaller houses/condos for the baby boomers to downsize into.
There are a lot of people(like me) that are empty nesters at or approaching retirement. We do not need a 4 bedroom house anymore. However, there is virtually nothing available to purchase. Homes like this in my are (NH) sell immediately.
Plus they sell for almost the same amount as a larger home.
So, this leads to very little inventory on the market.
I have a one bedroom and three junk room home. Or I should say my wife does. I could easily haul most of it to the landfill if it were up to me.
It is amazing the stuff you can accumulate in 60+ years.
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