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US Housing Starts – 17th March 2009

On the economic calendar this afternoon we have the Housing Starts in the US. The good news was that the previously reported falls in privately owned housing starts of 15.5% in December and 15.1% in November were revised down to 14.5% and 14.6% respectively. The bad news was that housing starts plummeted a further 16.8% in January. This brought the fall over the last 12 months alone to 56.2% and since the cyclical peak in January 2006 to 79.6%. At an annualised 466,000, housing starts are now at their lowest since the data was first compiled in 1959. Even if housing starts were to stabilise around this level, the three-month on three month rate of change, which fell to -31.2% in January, would still be around -30% in March. Were this to be the case, then as the chart suggests, this would point to an even larger decline in residential fixed investment spending in Q1 than the 23.6% at annualised rates seen in Q4. Everything else being equal, this would impart further negative pressure on the headline GDP figure. The consensus is looking for a comparatively modest 3.5% decline in February. For all the latest live news, live currency charts, stock charts, index charts and latest currency news, please just check these in the navigation bar above.