06/16/09 Baltimore, Maryland We note a couple of peculiar celebrations in the world of economic data today.
First, much to Wall Street’s delight, housing starts jumped 17.2% from April to May. The Commerce Department blew expectations out of the water on this one, as the Street was hoping for a 7% climb. Permits to build new property rose as well, up 4% and also nearly double trader expectations.
“Wow” we heard a CNBC talking face beam. “Another good sign,” said The Washington Post. Maybe we’re just too thickheaded… but with a 10.1 month supply of homes already on the market, how does building more make us all better off?
Second, producer prices posted a 5% annual decline in May, its biggest yearly fall since 1949. The PPI actually inched up 0.2% from April to May, but still far less than the Street’s 0.6% estimate. Thus, as CNN declared, inflation remains “in check.” We certainly won’t argue that idea in the near term, but as you may have gathered from yesterday’s 5, we don’t have the stomach to bet against a trend like this one:
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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The end of Bretton-Woods shows up pretty clearly on this chart, doesn’t it.