Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Housing Market Starts, Jobless Claims, and Wholesale Price Index – Mixed Bag

Housing-Market / US Housing Feb 17, 2012 - 02:48 AM GMT

By: Asha_Bangalore

Housing-Market

Best Financial Markets Analysis ArticleJanuary Housing Starts: It is a Multi-Family Story

Total housing starts increased 1.5% to an annual rate of 699,000 in January. The entire gain came from an 8.5% jump in starts of multi-family units to an annual rate of 191,000. New construction of single-family units slipped 1.0% to 508,000.


Chart 1 makes the compelling point that starts of new homes have moved up only slightly from the cycle established in March 2009. How far is new construction of single-family homes lagging behind the historical trend? The historical median of housing starts for the 40 years ended 2000 is 1.068 million units. Construction of new homes in January 2012 is roughly 53% below the historical median, implying there is a long road ahead before normality is reached.

On a regional basis, starts of new homes fell sharply in the Midwest (-40.7%) but rose in all other parts of the nation. The number of permits issued for construction of new homes moved up 0.8% to an annual rate of 676,000 in January comprising of small gains for single and multi-family units.

Jobless Claims Point to Significant Improvement in Labor Market

Initial jobless claims fell 13,000 to 348,000 during the week ended February 11. The four-week moving average stands at 365,250, the lowest in almost four years. Continuing claims, which lag initial jobless claims by one week, dropped 100,000 to 3.426 million, the lowest since August 2008. The message from this labor market indicator is that firms have stopped firing at a rapid pace and hiring at rapid pace is probably around the corner.

January Wholesale Prices Maintain Contained Trend

The January Producer Price Index (PPI) increased 0.1% in January, reflecting declines in prices of energy (-0.5%) and food (-0.3%). Although the price of gasoline (+2.0%) rose, the 1.7% drop in the price of electricity and lower prices for natural gas led to the decline in the energy price index. An 8.8% drop in prices of fresh fruits and vegetables accounted for the 0.3% decline of the food price index.

The core PPI, which excludes food and energy, moved up 0.4% in January. The large increase sticks out and begs an explanation. Higher prices for medicines (+2.0%) were responsible for about 40% of the increase. This is a non-repetitive annual adjustment of prices for medicines, implying that a sharp increase in core wholesale prices in the months ahead would have to be from other sources.

DEC 2 16 2012 Table 1

At the earlier stages of production, the intermediate goods price indexes dropped in January. In particular, the year-to-year change of the core intermediate goods price index, which excludes food and energy, shows a marked decelerating trend (see Chart 5). The main take away is that wholesale prices do not present a threat in the inflation-growth debate at FOMC meetings, for now.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2012 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in