U.S. Housing Starts & Building Permits, Consumer Prices (June)

Construction should be adding some sturdy support to 2nd quarter growth in the U.S., and signs that inflation is flickering should help the Fed's case to start normalizing rates this fall. And, as Fed Chair Yellen stated, today's data show that the economy does not stink.

After the previous month's surge, one would think that they 'all falls down'. But they didn't. The 'they' refers to U.S. building permits, which surprisingly rose for the third consecutive month. Permits jumped 7.4% in June to 1,343,000 units annualized, the highest level since July 2007. This comes after two straight gains of nearly 10% per month, even with May's boosted by a jump NYC (rush to put in an app before the possible end to some tax breaks). June's increase (which leaves permits are towering 30% above year-ago levels), was well supported by both singles (highest since January 2008), and multis (highest since January 1990), and by all regions of the U.S. Indeed, one would expect some pullback after such a big run-up, if the past is any indication.

"Permits are needed before one can break ground and there is ground breaking. Housing starts jumped 9.8% in June, also beating expectations to 1,174,000 units, the 2nd highest since November 2007. And, this comes on the heels of a net upward revision of 2.6% to the prior two months. The number of starts for a single-family structure fell, however, for the 2nd month in a row while the number of multis jumped 29.4%. So as the population ages and as the younger demographic finding jobs and moving out, this growing trend toward multis continues", says BMO Economics.