Economic Data Deluge

New Housing Starts data for November has been released ahead of today’s opening bell, with results better than anticipated: 1.365 seasonally adjusted, annualized new starts posted 3.2% growth year over year, above the estimated +2.0%. It is also a higher number than October’s upwardly revised 1.32 million, which themselves were taken from +3.8% originally reported to +4.5% this morning.

Checking under the hood, we also see positive results: though the Multi-family segment has cooled off a bit from previous months’ totals, it’s still up; for Single-family, which had been the relative laggard, we see 17% year over year growth. This is clearly good news for homebuilders like Zacks Rank #1 (Strong Buy)-rated PulteGroup Inc. PHM, but also for building material suppliers like Dover Corp. DOV and Sherwin-Williams SHW.

For Building Permits, the news is even better: 1.482 million is well beyond expectations, and up 1.4%. It also marks a 12 1/2-year high, taking us back to prior to the housing crash that led to the Great Recession. November’s headline number is also better than the unrevised 1.461 million reported for October.

Also for November, Industrial Production came in pretty much in-line with estimates at 1.1% for the month (depending on the source, expectations were for between +0.8-1.2%). The October revision improved by 10 basis points to -0.7%.

For Capacity Utilization, the November print was also roughly in-line: 77.3% versus 77.5% anticipated, with a revision to 76.6% from 76.7% reported for October. All together, these are stead, if muddle-through, numbers at a time when analyst are keeping an eye out for sinking (or volatile) productivity.

Analysts are discussing Boeing BA this morning, following its announcement to halt production of its much maligned 737 MAX. The aerospace giant had been assembling 42 MAX planes per month, and that originally was supposed to have been closer to 60 per month (before the two plane crashes that claimed hundreds of lives overseas). What economists are seeing today is that mothballing MAX production stands to cut 1/2 a point off annualized GDP.

This may not look like much, assuming the projections are true — we’re looking at roughly a 10 basis-point hit per quarter. But it does help us understand the scale that one American company can have on this country’s Gross Domestic Product just by building — or not building — a few dozen planes.

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