July 19, 2023 |
This Old House Didn't StartThe real estate recovery hit an air pocket in June.The Commerce Department said that housing starts fell eight percent in June compared with the prior month to a seasonally adjusted annualized rate of 1.43 million, a bit more than the expected decline. The prior month's surge was revised down slightly to an annual pace of 1.559 million from the previous estimate of 1.63 million. |
Manufacturing Is in a Recession
The slowdown in housing starts is particularly notable because it brings into question the growth of the broader economy. The industrial production figures from the Federal Reserve on Tuesday indicated a broad slowdown. Manufacturing output fell 0.3 percent in June. The index for nondurable manufacturing fell 0.6 percent, and the durable goods index dropped by 0.1 percent.
Manufacturing for consumer goods dropped off by 0.7 percent, probably an indication of the ongoing shift of consumer spending from goods to services. More distressingly, however, manufacturing of business equipment declined by 0.2 percent. This is an indication that businesses expect demand to be soft in the months ahead.
If the slowdown in manufacturing is not offset by a pickup in home building, a recession in the next 12 months becomes more probable.
Yay!! ? 😂