Better than Expected Housing Starts: Green Shoot or Weed?

Ockham Research submits:

Wednesday’s little bit of economic news which could be construed to indicate that the economy is “climbing out of the ditch” was a far better than expected jump in home construction for May. According to the Wall Street Journal:

Housing starts increased 17.2% to a seasonally adjusted 532,000 annual rate compared to the prior month, the Commerce Department said Tuesday. Building permits rose; apartment construction surged. The 17.2% increase was much bigger than expected. Economists surveyed by Dow Jones Newswires forecast a 7.0% increase to an annual rate of 490,000. Tuesday’s report on housing showed building permits in May increased 4.0% to a 518,000 annual rate. Economists had expected permits to rise by 2.4% to a rate of 510,000. April permits fell 2.5% to 498,000.

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