US: Housing Data Rises Further Questions About the Direction of the Economy - ING
US: Housing Data Rises Further Questions About the Direction of the Economy - ING
Rob Carnell, Chief International Economist at ING warns that the sharp
decline in housing starts and permits in March (-7.7% and -8.8%
respectively) raises further questions about the direction of the US
economy.
Key Quotes:
“Housing starts
and permits turned down sharply in March – this was one of the better
performing bits of the US activity, and raises further questions about
the direction of the economy.”
“With talk of recession in the US
economy beginning to gain traction again ahead of what will probably be a
very weak 1Q16 GDP release next week (just after the April FOMC
meeting), we are looking for evidence on either side of the argument to
help us update our forecasts and confirm or deny the recession
argument.”
“We feel the evidence for recession is quite
circumstantial, with both weak and strong patches within the US economy.
But one of those stronger patches has been the US home building sector,
and this has taken a big dent in March.”
“We have been
consistently below the recently cut consensus forecasts for US GDP
growth (2.0% for 2016) and remain so even now (INGF 1.9%for 2016). But
the likelihood of a really weak 1Q16 GDP forecast means that we will
almost inevitably have to trim our figures further. Something closer to
1.5% for the full-year would be more consistent with the sorts of
numbers published for 1Q16 GDP by the NowCasters, even assuming a
recovery to the 2-2.5% range for the rest of the year.”
