Summary for Week ending July 20th

For the last few months, the economic data has been weak and disappointing. Last week I joked: "Luckily there are a few housing reports next week, so all the data will not be grim.", and sure enough the housing data was better than expected (still historically weak, but definitely improving).

Housing started the week off with July home builder confidence at the highest level since March 2007. Then housing starts for June were reported at 760 thousand, and finally the existing home sales report showed the largest year-over-year decline in inventory ever reported. (Sales were weaker than expected, but the key number in the NAR report is inventory).

Unfortunately some non-housing economic data was released too. Retail sales were especially weak in June, initial weekly unemployment claims increased sharply, the Architecture Billings Index (mostly commercial real estate) showed further contraction, and the regional manufacturing surveys suggested ongoing weakness in July.

There were a couple of non-housing positives: Industrial production was up in June, and inflation was benign.

Luckily there is another housing report next week: June New Home sales. But the key report next week will be Q2 GDP - and that will be UGLY.

Here is a summary of last week in graphs:

' Housing Starts increased to 760 thousand in June, Highest since October 2008

Click on graph for larger image.

Total housing starts were at 760 thousand (SAAR) in June, up 6.9% from the revised May rate of 711 thousand (SAAR). Note that May was revised up from 708 thousand. April was revised up slightly too.

Single-family starts increased 4.7% to 539 thousand in June.

The second graph shows total and single unit starts since 1968.

This shows the huge collapse following the housing bubble, and that total housing starts have been increasing lately after moving sideways for about two years and a half years.

Total starts are up 59% from the bottom start rate, and single family starts are up 53% from the low.

This was above expectations of 745 thousand starts in June. This is another fairly strong housing report.