Ignore the headlines, this morning’s key economic data looked good. Housing starts? Sure, they were at their lowest rate since the government started keeping tabs on the statistic, but we really don’t need new houses do we? There’s a lot of inertia towards building more houses, especially since homebuilders with labour and land have to do something to pass the time, but we obviously have quite a tremendous backlog to work though.
And the deflationary CPI stat? Again, historic. It was the biggest drop since 1932 (ominous), but when you factor out energy, it was basically flat. As we noted the last time the number came out (and it showed a similar reading), this is the mirror image of how things looked onthe way up. Oil and food were going crazy, basic, core items moved moderately.