Tuesday, May 19, 2009

Silver Lining?

The Lehmann Letter ®

Today the Census Bureau announced (http://www.census.gov/const/newresconst.pdf ) that April housing starts fell to a post-WWII low of 458,000.

You can see for yourself by posting this figure in the chart below

Housing Starts

(Click on chart to enlarge)

(Recessions shaded)

Where’s the silver lining in that number?

It appears when you disaggregate the 458,000 starts into its single-family and apartment-house components.

The single-family component seems to have hit bottom. There were 368,000 single-family starts in April, which was slightly better than any month since the beginning of the year. It doesn’t look like this number will drop below 350,000. That’s good.

But apartment-house construction is another matter. That sank to 78,000 from 135,000 the month before and 310,000 a year ago. It remains to be seen whether that low figure is an anomaly and apartment-house construction snaps back, or whether this activity collapses too.

We’ll stay tuned.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann

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