... data published by the Commerce Department on Tuesday showed that the pace of new home construction dropped sharply last month, the latest in a series of slightly weaker readings on the US economy.
The seasonally adjusted annual rate of US housing starts dropped by almost 18 per cent last month, to 1.837m units. This was the largest monthly fall in 14 years, and was much larger than the consensus forecast of a drop of about 5 per cent...
The fall in March is the biggest since January 1991. Work began on 1.837m homes at an annual rate, the slowest since November, after a 21-year high of 2.23m in February.
But don't despair -- or do despair, depending on your perspective:
But housing starts remained at a high level, and within the 1.6m-2.3m range of the past two years.
"Despite the decline in housing starts in March, for the quarter, starts increased an annualised 24.1 per cent. This suggests that residential investment's contribution to [first quarter] growth will be significant," Gary Bigg, economist at Bank of America, said in a note to clients.
Nonetheless, the folks at Briefing.com say yeah, but:
The starts decline may have been exaggerated by weather condition, but the housing market is clearly leveling off (at best).
They have a nice picture of the PPI core trend too.
UPDATE: pgl notes this comment from Calculated Risk in response to a related post at Angry Bear:
Historically starts haven't been as good an indicator as Sales of the end of a housing boom.
Next Tuesday's number for New Home Sales might be interesting.
UPDATE REVISION: I neglected to link to Calculated Risk's own interesting post on the topic.