The monthly reports on April's Housing starts and industrial production give us some insight into which way the economy is headed. The April employment report had demonstrated weakness in each.
Construction: Housing Starts 19% Below Last Year
The Wall Street Journal reported, "Home construction unexpectedly rose during April, making a surprise increase despite bloated inventories and tighter credit for subprime borrowers, but building permits took their sharpest fall in 17 years." Bloomberg's consensus forecast for housing starts were 1.475 million new units. The actual (a 1.528 million annual rate) was better, but that level is 19 percent below the year before.
Manufacturing, especially Aerospace, Is Up
The Federal Reserve Board published its April Index of Industrial Production. America' mines and factories produced 1.9% more than a year ago and their capacity usage (80.2% ) was 2.3% higher. Motor vehicles were a little stronger, a good sign.
Aerospace production was up 9.7 percent over last year.
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