The folks at TrendMacrolytics have been advising for some time now that the economy will “reaccelerate” and inflation isn’t as tame as some think. This morning’s updates on housing starts and producer prices lend support to this contrarian view of things to come. Does that mean it’s no longer a contrarian view?
In any case, housing starts climbed 6.7% last month, the Census Bureau reported today, reversing some of the pain from October’s 13.7% collapse. Even so, November’s housing starts are still off more than 25% from a year ago. And there’s no getting around the fact that last month’s annualized 1.588 million starts, along with October’s 1.488 million, are the lowest in one-two punch in several years. If nothing else, today’s report proves once again that dead cats do indeed bounce. The question is whether the kitty has any more jumps up his paw?
While you’re chewing on the implications, add this to today’s menu of economic consumables: producer prices in November rose 2.0%–the highest monthly gain since 1974. The core rate of change in PPI last month wasn’t quite the record that top line PPI was, but it was close. Indeed, the 1.3% surge in core producer prices in November is a height that’s rarely attained.