THE BASIS POINT

Housing Starts down, Initial Jobless up, Inflation Contained.

Housing Starts  (April 2013)

– Starts (seasonally adjusted, annualized) 853,000. Previous was 1,036,000

– Permits (seasonally adjusted, annualized) 1,017,000. Previous was 902,000.

Housing Starts are at a 5 month low.

Housing Starts are in units.  An 80 unit apartment building is 80 Housing Starts. Last month multifamily Starts fell 38.9% and single-family fell 2.1%.

A lot of the recent increase in Housing Starts is in what will become rental units.  One of the effects of the bursting of the housing bubble was that lending standards tightened and fewer people can qualify for a mortgage to own their own home.

Consumer Price Index (April 2013)

– CPI core (less food & energy) Month/Month  0.1%. Previous was +0.1%.

– CPI core (less food & energy) Y/Y change  1.7%. Previous was +1.9%.

– CPI Month/Month -0.4%. Previous was -0.2%

– CPI Year/Year   1.1%. Previous was 1.5%.

As I say each month, core is what is important for the economy because it filters out the jittery energy and food components.  The present data is ideal, showing core inflation well-contained despite a gigantic increase in monetary base and it shows overall CPI down. Folks have more money for discretionary spending, at least more money in April than March.

Jobless Claims  (week ended 5/11/2013)

– New Claims (seasonally adjusted)  360,000. Previous was 323,000

– Unadjusted Claims totaled 318,203 in the week ending May 11, a decrease of 15,436 from the previous week.

– 4-week Moving Average 339,250. Previous was 336,750.

I do not see the increase as much more that a consequence of the way the Labor Department adjusts the weekly data.  Sometimes the adjustments overwhelm the actual data.  What I find both amusing and distressing is the way the media and the markets look only at the surfaces of this and other fundamentals.

Philadelphia Federal Reserve Survey (May 2013)

– General Business Conditions -5.2. Previous was +1.3%.

This as well as yesterday’s Empire State Index for N.Y. State and other recent Fed surveys make it clear that it is still difficult for businesses to justify manufacturing in the United States.