U.S. data was mixed this week, consistent with our expectation of modest first quarter real GDP growth. We look for about 1.1 percent 2017Q1 real GDP growth when the data is released next Friday.
Housing starts dropped by 6.8 percent in March. The trend still looks positive and the March reset looks like normal monthly volatility. Single-family starts for March dropped by 6.2 percent for the month, but remain up by 9.3 percent over the previous 12 months. Multifamily housing starts fell by 7.9 percent for the month. Total permits for March were up by 3.6 percent.
According to the MBA Mortgage Applications Survey, the rate for a 30-year fixed rate mortgage was down to 4.22 percent for the week ending April 14. Mortgage applications for purchase were down into mid-April.
The National Association of Home Builders’ Housing Market Index fell modestly in April, still showing strong confidence in the market.
Existing home sales increased by 4.4 percent in April, after dipping in March. The median sales price of an existing home was up by 6.8 percent in March, over the previous 12 months.
Industrial production increased by 0.5 percent in March, pushed by a large increase in utility output. Mild winter weather weighed on utility output in January and February, but that reversed in March as utility output surged by 8.6 percent. Mining output ticked up by 0.1 percent in March, after a strong 2.9 percent gain February. Manufacturing output dropped by 0.4 percent as motor vehicle assemblies fell.
The Leading Economic Index increased by 0.4 percent in March, extending a string of moderate-to-strong monthly gains that began last December. This is good news for the U.S. economy and is consistent with our expectation that real GDP growth will pick up in 2017 after a tepid first quarter.
Initial claims for unemployment insurance increased by 10,000 for the week ending April 15, to hit 244,000, still a very low number. Continuing claims fell by 49,000 for the week ending April 8, dropping below the two million mark to hit 1,979,000, an exceptionally low number. The basket of solid labor market indicators suggests that the weaker-than-expected March payroll job gain of just 98,000 was more fluky than substantive.
For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: Comerica_Economic_Weekly_ 04212017.