As I mentioned earlier this week (pointed out by Joe Brusuelas), the housing starts were going to be good. The weather was so good, that more builders were able to start projects. There is a big seasonal adjustment factor at work. Rather than taking this as a sign of strength, you are better off assuming that some building that would have been done in February and March, started in December and January (I know our building project got an early start with the weather). December numbers were revised higher, and January numbers came in high as well. Permits don’t show the same level of strength. Not bad numbers, but probably not as good as it looks and almost certainly not sustainable.
Initial jobless claims dropped, though once again, last week’s were revised higher. No real complaints about this number, though it would be great to see data that shows the number of workers eligible for unemployment benefits if they are let go. I continue to believe that there has been such a structural shift in how people are paid (consulting, part-time, etc.) that a lower % of the workforce is actually eligible for unemployment benefits. This number is good regardless, but it would be interesting to put it in the context of how many are eligible. Maybe people are being laid off, or small businesses are “dying” that may not show up in the claims number? Anyways, jobs seem okay, and this confirms what we have seen, and may also have benefited from the great weather.
Since Ben has spent a year convincing everyone to look at the “core” inflation numbers because somehow we don’t eat or drive, the pop in ex food and energy in PPI would be interesting if it also hits CPI. Aren’t we “targeting” 2% inflation? And in spite of all the talk about deflation concerns, aren’t we running above 2%? Fisher took the time to beat on “Wall Street’s dream” of QE, he shouldn’t be ignored as much as he seems alone in a flock of doves.