Housing Starts Blow Away Expectations
Posted at 11:15 a.m. on Oct. 17, 2012
The Census Bureau released its latest residential construction report, showing housing starts at 872,000 in September, far above the expected 765,000 and almost 38.4% above the number in September 2011.
Bill McBride: “This was partially because of the volatile multi-family sector, but single family starts were up sharply too – and above 600 thousand SAAR for the first time since 2008. Right now starts are on pace to be up about 25% from 2011.”
Matthew Yglesias: “I also think it’s a clear sign of the power of QE3 and the myth of “long and variable lags.” The idea that monetary policy works via long and variable lags is a great bit of ass-covering for central bankers who don’t want to be held responsible for outcomes. But since monetary policy primarily works through expectations, it primarily works very quickly. QE 3 was clear, forceful, and yet also relatively modest so a short-term one-off surge in investment activity (housing starts) and durable goods purchases (car sales) followed by a speedy return to the trend growth path is exactly what we should expect.”