Housing starts jumped 8.3% to a 1.78-million annual rate from February's weather-reduced total.
There are two messages here for the pace of economic activity for the rest of the year, said Jim Haughey, Newport Communications' senior economist.
First, the February-March housing start average -- one bad weather and one good weather month-- was off 7% from the January peak level. This trend will continue. The housing boom is ebbing, so rising residential construction spending will not be a key driver of economic growth this year as it was the last few years.
Exports and investments will have to take that role, and until they strengthen further later this year economic growth will not be fast enough to significantly eat into the surplus of labor and capital capacity. Shipper's margins, while improving, will still be subpar, so they will remain resistant to shipper requests for higher rates.
The second message is that the weakness reported in most markets in February was heavily weather related. Already the two most weather-sensitive markets -- housing starts and retail sales -- have been reported substantially higher in March.
Together with the boost in confidence already appearing with good reports from Iraq, the spending outlook for the spring and summer has improved after the brief winter dip.
There are two messages here for the pace of economic activity for the rest of the year, said Jim Haughey, Newport Communications' senior economist.
First, the February-March housing start average -- one bad weather and one good weather month-- was off 7% from the January peak level. This trend will continue. The housing boom is ebbing, so rising residential construction spending will not be a key driver of economic growth this year as it was the last few years.
Exports and investments will have to take that role, and until they strengthen further later this year economic growth will not be fast enough to significantly eat into the surplus of labor and capital capacity. Shipper's margins, while improving, will still be subpar, so they will remain resistant to shipper requests for higher rates.
The second message is that the weakness reported in most markets in February was heavily weather related. Already the two most weather-sensitive markets -- housing starts and retail sales -- have been reported substantially higher in March.
Together with the boost in confidence already appearing with good reports from Iraq, the spending outlook for the spring and summer has improved after the brief winter dip.
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