Travelling week.
U.S. Housing Starts and Building Permits Recover
Total housing starts in March increased 1.9% to 1.319 million units (SAAR) following February’s 3.3% decline to 1.295 million, revised from 1.236 million.
An increased number of multi-family starts accounted for last month’s overall gain. They jumped 14.4% (23.8% y/y) to 452,000, the highest level since October 2016. Starts of single-family homes declined 3.7% last month (+5.2% y/y) to 867,000 from February’s 900,000. It was the lowest level in three months.
Movement in starts last month varied around the country. Housing starts in the Midwest strengthened 22.4% last month (29.5% y/y) to 180,000 after a 1.4% February rise. In the Northeast,s starts notched 0.8% higher (13.8% y/y) to 132,000 after two months of strong increase. Starts in the West declined 1.5% (28.2% y/y) to 386,000 and reversed February’s 1.8% gain. Starts in the South slipped 0.6% to 621,000 after a 9.9% decline.
Building permits increased 2.5% (7.5% y/y) to 1.395 million following a 4.1% February decline. Single-family permits declined 5.5% (+1.7% y/y) to 840,000 after a 1.4% increase in February. Permits to build multi-family homes jumped 19.0% (18.4% y/y) to 514,000, after falling 13.6%. (…)
U.S. Industrial Production Strengthens; Factory Output Ticks Higher
The Federal Reserve reported that industrial production increased 0.5% (4.3% y/y) during March following a 1.0% February rise, revised from 1.1%. A 0.4% rise had been expected in the Action Economics Forecast Survey. Factory sector production improved 0.1% (3.0% y/y) after a 1.5% jump. Utility output surged 3.0% (5.4% y/y) and contrasted with February’s 5.0% decline. Mining production strengthened 1.0% (10.8% y/y) following a 2.9% increase. (…)
Capacity utilization increased to 78.0%, the highest level since March 2015. Factory sector capacity utilization slipped to 75.9%. (…)
How the Tax Cut Trump Loves Will Deepen Trade Deficits He Hates Major tax cut, higher federal spending will push up imports, widening gap
(…) The U.S. runs a trade deficit because it consumes more than it produces while its trading partners, collectively, do the opposite. (Another way of saying this is that the U.S. invests more than it saves, while other countries save more than they invest.)
(…) in a recent report economists at Goldman Sachs studied the historical record and found that all else equal, every $100 boost to the budget deficit because of policy decisions (as opposed to economic developments such as a recession) raises the trade deficit by $35. (…)
Correcting the deficit with one country or in one product is often pointless because the shortfall may simply reappear elsewhere. Indeed, the shale revolution has helped slash the single biggest contributor to the deficit by boosting exports of oil and slashing imports. Yet the gap in all other commodities has grown by more than enough to offset that benefit. (…)
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Amazon launches international shopping from United States Amazon.com Inc has launched an international shopping feature that will enable customers across the world to shop more than 45 million items that can be shipped to their country from the United States.
ZEW Expectations Take a Dive: From Fear to Eternity
This follows the sharp degradation in the Empire Manufacturing Survey’s outlook (see yesterday’s Daily Edge). Obviously, trade issues are causing great anxiety among biz people…
…while non-biz people don’t care much:
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Economic Officials Optimistic on World Growth, Despite Trade Tensions
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Trump ends his brief flirtation with TPP US president’s second U-turn on Pacific trade adds to pressure on Japan’s Shinzo Abe
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China to End Venture Rule for Foreign Auto Makers
China’s move to ease trade tensions with the U.S. by scrapping joint-venture rules for auto makers could open a path to higher profits for American car companies, but some said untangling a web of partnerships forged with Chinese companies over decades may prove too difficult.
Beijing responded to U.S. calls for a level playing field in the world’s biggest auto market with a plan to phase out rules requiring foreign auto makers to share factory ownership and profits with Chinese companies by 2022. Regulations concerning electric-vehicle joint ventures will end this year, potentially aiding niche companies or market newcomers like Tesla Inc. (…)
Last week, Chinese President Xi Jinping, in an apparent attempt to defuse trade tensions, said tariffs on imported vehicles would be significantly reduced from the current 25%, another important concession to foreign vehicle makers looking to further tap China’s growth. (…)
Although overseas car companies entered the joint ventures reluctantly, some say they have come to accept them as a fact of life in a country where foreign businesses can struggle without local allies. (…)
A person familiar with GM’s strategy said the prospect of reaping 100% of the profits may be enticing, “but you’d also get 100% of the cost and complexity.” This person said partnerships help when working with regulators, developing a manufacturing footprint and managing supply chains and retail networks. (…)
Lifting limits on electric-car makers by the end of this year would encourage foreign investments from Tesla and others, helping China become the world’s factory for electric vehicles, he said. (…)
Looks like the Chinese are presenting the U.S. Administration good PR material but with large potential “unintended” consequences…
Meanwhile, biz people may be more concerned by such trends in the real world:
- Elsewhere in Europe, the Swiss franc is nearing 1.2 per euro. This was the currency cap before the 2015 blowout. (The Daily Shot)
