US Housing starts up permits down, IP up

US housing starts rose 2.5% in April versus expectations of a 1.5% decrease whilst building permits fell 8.9% to 1,429k their lowest level in 10 years and the biggest % decline in 17 years. It must be remembered the housing data are relatively volatile, the standard error for housing starts was plus or minus 9.3%. Thus a 2.5% raise is indicative of not much at all.


Building permits are more reliable with a sampling error of plus or minus 1.4%. Since permits lead housing starts and are generally less volatile more weight should be given to that number. The housing slump is now into it's 19 month from it's peak in late 2005 with no signs of a recovery anytime soon.

Still the market didn't let the housing data get it down rallying on stronger than expected Industrial production numbers. IP rose 0.7% versus expectations of a 0.4% rise. Increases were recorded across all major market groups in April. Manufcturing rose 0.5% prompting some analysts to conclude that manufacturing is turning the corner. Where have I heard that line before?