Suitably Flip

With Recoveries Like These...

Who needs recessions?

The housing market continues to decline sharply, according to the latest figures on new housing starts and residential building permits.  The Census Bureau reported today that the annualized rate of new residential starts dropped over 10 points from March to April, and that single-family starts dropped 5.1%.  Permit applications also declined by 4%, which indicates that no one sees much hope for renewed demand in the market:

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 551,000. This is 4.0 percent (±1.1%) below the revised March rate of 574,000 and is 12.8 percent (±1.2%) below the revised April 2010 estimate of 632,000.
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Privately-owned housing starts in April were at a seasonally adjusted annual rate of 523,000. This is 10.6 percent (±13.0%)* below the revised March estimate of 585,000 and is 23.9 percent (±7.0%) below the revised April 2010 rate of 687,000.

The market expected permits and starts of 590,000 and 563,000, respectively, so these were legitimate whiffs.

In other news...

Industrial production was unchanged in April after having increased 0.7 percent in March. Output in February is now estimated to have declined 0.3 percent; previously it was reported to have edged up 0.1 percent.

The market expected an increase of 0.5%.

In April, manufacturing production fell 0.4 percent after rising for nine consecutive months.

As I've noted (more than once) over the last couple weeks (and as the manufacturing falloff reaffirms), the recent data suggests the economy has succumbed to levels of malaise not seen since late summer 2010 - the trough of what amounted to a mild double-dip, marring the already woefully anemic recovery we've been enjoying since mid-2009.  Mild in the sense that we didin't fall back into recession (negative output growth), at least not for any measurable stretch of time, but the recovery did all but stall.

If the trend outlined by the continuing stream of ugly data doesn't reverse quickly, the paltry 1.8% growth we saw in the first quarter may well give way to a formal double-dip (triple-dip?), with economic activity sliding back into the red before the end of 2011.

The mid-2010 dip saw growth plunge from its (embarrassingly moderate) post-recession high of 5.0% to 1.7% in just two quarters.  Growth crested again at just 3.1% in the fourth quarter of last year.  If the current dip were to see the same pace of deceleration, we'd be on pace for a negative GDP print (of -0.2%) in the current quarter.

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With Recoveries Like These...

Who needs recessions?

The housing market continues to decline sharply, according to the latest figures on new housing starts and residential building permits.  The Census Bureau reported today that the annualized rate of new residential starts dropped over 10 points from March to April, and that single-family starts dropped 5.1%.  Permit applications also declined by 4%, which indicates that no one sees much hope for renewed demand in the market:

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 551,000. This is 4.0 percent (±1.1%) below the revised March rate of 574,000 and is 12.8 percent (±1.2%) below the revised April 2010 estimate of 632,000.
...
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 523,000. This is 10.6 percent (±13.0%)* below the revised March estimate of 585,000 and is 23.9 percent (±7.0%) below the revised April 2010 rate of 687,000.

The market expected permits and starts of 590,000 and 563,000, respectively, so these were legitimate whiffs.

In other news...

Industrial production was unchanged in April after having increased 0.7 percent in March. Output in February is now estimated to have declined 0.3 percent; previously it was reported to have edged up 0.1 percent.

The market expected an increase of 0.5%.

In April, manufacturing production fell 0.4 percent after rising for nine consecutive months.

As I've noted (more than once) over the last couple weeks (and as the manufacturing falloff reaffirms), the recent data suggests the economy has succumbed to levels of malaise not seen since late summer 2010 - the trough of what amounted to a mild double-dip, marring the already woefully anemic recovery we've been enjoying since mid-2009.  Mild in the sense that we didin't fall back into recession (negative output growth), at least not for any measurable stretch of time, but the recovery did all but stall.

If the trend outlined by the continuing stream of ugly data doesn't reverse quickly, the paltry 1.8% growth we saw in the first quarter may well give way to a formal double-dip (triple-dip?), with economic activity sliding back into the red before the end of 2011.

The mid-2010 dip saw growth plunge from its (embarrassingly moderate) post-recession high of 5.0% to 1.7% in just two quarters.  Growth crested again at just 3.1% in the fourth quarter of last year.  If the current dip were to see the same pace of deceleration, we'd be on pace for a negative GDP print (of -0.2%) in the current quarter.