Wow. A couple of economic reports just hit the ball out of the park … kind of.
The Commerce Department reported(.pdf) that housing starts jumped 12.1 percent in December to an annual rate of 954,000 units, the highest level since June of 2008, and permits for new construction edged higher, up 0.3 percent to a rate of 903,000. As shown below, from year ago levels, residential homebuilding has surged with housing starts now up 37 percent and permits some 29 percent higher.
Of course, if you go back a little further, things look a little different.
As shown below, housing starts are still down significantly from the pre-housing bubble days when the nation would build about 1.5 million new homes every year. Nonetheless, this was a very positive report and economists are no doubt recalculating what sort of impact these gains will have on fourth quarter GDP.
In a separate report from the Labor Department, jobless claims fell to their lowest level in five years, down from 372,000 to 335,000 for the week ending January 12th, however, a spokesman for the agency made clear that this data series is quite volatile at this time of the year due to high holiday-related layoffs and how these figures are affected by seasonal adjustments.
A clear picture of the labor market is not likely to be available for at least another few weeks.