The “incoming data†was disappointing again this morning—–this time the culprit was housing starts which were off by 17% from January. But please don’t blame the “weather†again.
The data below is for single family starts which are less volatile than apartment construction. At an annual rate of 593k units in February they were almost exactly flat with last February at 589k. If memory serves, the second month of 2014 was the epicenter of last year famous Polar Vortex—–meaning that winters happen but this year’s tepid results cannot be blamed on a winter that was not as bad as the real bad one.
Besides that, the seasonal adjustments are supposed to factor in weather—especially the possibility of snow and cold in the Northeast. On the considerable chance that the seasonals are screwed up, however, just consider the raw unadjusted, unannualized numbers for the month of February. During the coldest winter in recent times last year, the actual number of single family starts during the month was 40,600. This year it was 40,700. You need a microscope to tell the difference!
Fortunately, it is not the hairline gain from last year that’s the real story in today’s downbeat housing numbers. What we have here is another powerful case of the Great Immoderation. That is, the havoc that the Fed’s bubble finance policies have visited upon the main street economy.
So sticking with the raw unannualized numbers for single family starts, go back to the turn of the century and you will find the monthly number for February 2000 was 88k or more than double the current rate. Then, by the top of the Greenspan housing bubble in 2005—which he had ignited to dig his reputation out of the dotcom bust and tech wreck—-the February number had soared to 124k. After that it rolled-over sharply and then finally imploded to a low of 25k in February 2009.
