1:03 PM, Oct 18, 2017 — US housing starts declined last month, missing analysts’ expectations as hurricanes impacted construction in the south, even as single-family permits offered an indication the weakness might not last long.
Privately owned starts were at a seasonally adjusted annual rate of 1.127 million, 4.7% below the revised August number of 1.183 million, the Commerce Department said on Wednesday. The consensus on Econoday was for 1.17 million.
“Today’s headline largely reflects delayed homebuilding in Texas and Florida as a result of Hurricanes Harvey and Irma,” TD Economics said in a note on their website. “Despite the drop in single-family starts, permits advanced strongly, indicating that the weakness in building is likely transitory.”
Privately-owned housing units authorized by building permits in September were 4.5% below August, but single-family authorizations were up 2.5% month-on-month, the data showed.
The August and September storms in the southern US have been showing their impact on the country’s economic data releases. Federal Reserve Chair Janet Yellen said earlier this week the effects are “quite noticeable in the short term,” although she said history shows longer-term effects will be modest.
TD Economics said rebuilding in the coming months will continue to be supported by a tightening labor market that has bolstered household incomes and lending conditions remain supportive.
The weaker-than-expected starts “imply lower private residential construction spending in the third quarter,” said Barclays. But the bank’s overall residential investment tracker was revised lower only slightly, leaving their third quarter gross domestic tracking estimate unchanged at 2.3%.