Weekly economic review & outlook
Housing set up for another solid year
February 24, 2020
You Need to Know
Week in review
Starts pull back modestly, after a December surge
Housing starts dropped by 3.6 percent in January, but this was less than expected and the level remains quite high.
Leading indicators rose strongly
The LEI saw its largest one-month gain since 2017 in January, easing concerns about a recession signal from the index.
New home sales expected to rise
New home sales are expected to rise, spurred by solid underlying demand factors and a record low supply of existing homes for sale.
Personal consumption expenditures should edge higher
Consumer spending should accelerate a bit in January based on already reported retail sales and stronger house price gains.
Homebuilders are planning for a strong year from homebuyers. After housing starts surged to a 13-year high in December (helped by unusually warm weather), a drop was expected for January. Starts did pull back, but the 3.6 percent decline was less than expected and it left starts at an annualized pace of 1.57 million — only trailing December’s figure for the strongest level of the expansion.