Housing Construction & Industrial Output Rebound In April

US housing starts and industrial activity posted solid increases in April, rising by stronger-than-expected rates last month. But the upbeat news is clouded by negative trends for the year-over-year data. In the housing sector, the change in tone on the downside is conspicuous—for the first time in 13 months, new residential construction and newly issued building permits fell relative to their respective year-earlier levels. Meanwhile, industrial output rebounded sharply in April, rising by a better-than-projected 0.7%. But the improvement wasn’t enough to reverse the red ink in the annual comparison. As a result, US industrial activity contracted last month in year-over-year terms–as it’s been doing since last September.
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A Flatter Treasury Curve… And Slower Growth?

The spread between long and short Treasury yields has been narrowing lately, a change that some analysts see as a warning sign for US economic growth. The current numbers overall suggest that that the macro trend is sliding into the business-cycle ditch, but there’s still plenty of concern about painfully slow growth. How slow can it go before tipping into a formal recession? No one really knows, but the flatter yield curve these days is attracting attention in the wake of wobbly equity prices and mixed economic news.
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Is Central Banking Sliding Into The Quagmire Of Politics?

The Bank of England’s governor on Friday warned that Britain risked an economic recession if citizens voted to leave the European Union (EU) in next month’s referendum. “In that scenario we would expect a material slowing in growth, a notable rise in inflation, a challenging trade-off,” Mark Carney predicted at a news conference. Prudent advice from a sober-minded central banker? Or, as critics charge, a misguided effort to sway a democratic debate by pushing an institution that should remain above the fray into the political arena?
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Initial Guidance | 16 May 2016

● US Retail sales up 1.3% in Apr, biggest gain in a year | MarketWatch
● US Consumer Sentiment Index In May At 1yr High | Bloomberg
● US Business Inventories Rise More Than Expected In Mar | RTT
● GDPNow Q2 growth estimate for US jumps to +2.8% | Atlanta Fed
● NY Fed nowcast for US GDP growth in Q2: +1.2% | NY Fed
● China Ind Prod, Retail Sales Up Less Than Expected in Apr | RTT
● Yes, the IMF and 200-plus economists can be wrong | R. Bootle (Telegraph)

Book Bits | 14 May 2016

● Who Rules the World?
By Noam Chomsky
Summary via publisher (Metropolitan/Macmillan)
In an incisive, thorough analysis of the current international situation, Noam Chomsky argues that the United States, through its military-first policies and its unstinting devotion to maintaining a world-spanning empire, is both risking catastrophe and wrecking the global commons. Drawing on a wide range of examples, from the expanding drone assassination program to the threat of nuclear warfare, as well as the flashpoints of Iraq, Iran, Afghanistan, and Israel/Palestine, he offers unexpected and nuanced insights into the workings of imperial power on our increasingly chaotic planet.
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