Before I quickly comment on Housing Starts, Bankrate.com last night said the average 30 yr mortgage rate jumped 19 bps to 5.19%, the highest since April 21st. Nov Housing Starts totaled 555k annualized, 5k above expectations but Permits at 530k were 30k below forecasts and is the obvious precursor to Starts. Permits are just 8k above at least a 50 year low. Starts and Permits for single family homes did rise. It was the multi family category that saw a drop in both starts and permits. For the sake of a market still choking on existing inventory, a slowdown in single family home construction continues to be what is needed at the short term cost of economic activity.

Initial Jobless Claims totaled 420k, 5k less than expected and compares with 423k last week which was revised up by 2k. The 4 week average is now 423k vs 428k last week and at the lowest since Aug ’08. Continuing Claims rose by 20k and Extended Benefits rose by a net 325k but comes after a fall of 393k in the prior week. Bottom line, the level of claims continues the improvement seen over the past 6 weeks but the question still remains of when the monthly job gains will be enough to lower the unemployment rate on a sustainable pace.

Category: MacroNotes

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