Economic Notes for the Week of January 21st

(+) Housing starts for December were dramatically higher, with a gain of +12.1% relative to an expected +3.3% improvement.  By way of differentiation, single-family starts were up +8.1% while mufti family continued its trend higher, growing over +20%, and the growth was seen in all areas of the country.  December building permits, on the other hand, were ‘disappointing’ to the extent that the gain was +0.3% lagged the consensus +0.5% figure.  These were led by gains in single-family permits, as opposed to multi-family.

(+) Retail sales numbers were better than anticipated, with a gain of +0.5% for December versus an expected +0.2% result.  As usual, the embedded sub-categories added more color, but didn’t change the result much.  The sales ‘ex-autos’ figure was a similar +0.3%, a shade above expected, while the ‘core/control’ group that excludes volatile autos, gasoline and building materials gained +0.6%—double what was expected (partially due to a gasoline price drop).  What we can take from all this is that more substantive elements like health and personal care components performed well, when all cyclical components removed.

(-) Business inventories rose a bit for November, but largely in line with expectations, at +0.3%.  This was a slower rate of accumulation than in the prior quarter, so a small negative in terms of overall growth measurement prospects. Read more