Analysts at Australia and New Zealand Banking Group (ANZ) provide their afterthoughts on the US economic data released last Friday.
Key Quotes:
“Housing starts surged 16.9% m/m in December with the residential sector benefitting from low interest rates, rising wealth, rising real incomes and a healthy jobs market. The last time they were rising at the current rate of 1,608k saar was 2003. It is way above the long-run average of 1,428k. Residential construction is set to be a significant contributor to growth this year. That said, building permits fell 3.9% in December, more than twice the fall expected.
December manufacturing output rose 0.2% m/m, despite the 0.3% fall in industrial production, which was led by a sharp fall in utilities (-5.6% m/m). The manufacturing index is now back at its strongest level since August, and the monthly lift in manufacturing came about despite a 4.6% m/m fall in auto parts production. Excluding the auto sector, manufacturing output rose 0.5% m/m. Output of non-durable goods rose 0.6% m/m.
Finally, University of Michigan consumer sentiment was stable in early January at 99.1 vs 99.3 at the end of December. At the same time, inflation expectations rose, and, while that is welcome news, those expectations are influenced by the oil price and could have been influenced by Middle East tension.”
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