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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Wednesday, December 18, 2013

November 2013 Residential Permits, Starts and Completions

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Total housing starts surged in November to their highest seasonally adjusted and annualized rate (SAAR) since February 2008. Total starts rose to 1.091 million units, an increase of 202,000 units (22.7 percent) relative to October. That is the largest monthly increase (on an absolute basis) since January 2006. Single-family starts contributed the lion’s share of the increase, rising by 125,000 units (22.7 percent) to 727,000 units. Multi-family starts rose by 77,000 units (26.8 percent) to 364,000 units.
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Not-seasonally adjusted total starts rose by 5,500 units (7.1 percent) to 82,800 units. Although that level is lower than several earlier months in 2013, it is noteworthy that seasonally unadjusted starts rose in November (relative to October) for the first time since the Census Bureau began keeping records in 1959. It remains to be seen whether November's seasonally adjusted spike is the signal of a new wave of starts. Based on the behavior of lumber futures prices, we suspect not.

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Builders’ apparently concentrated most of their activity starting new projects, as total completions waned on both seasonally adjusted (-1,000 units, or 0.1 percent, to 823,000 units) and non-adjusted (-4,200 units, or 5.6 percent, to 70,400 units) bases. Only the multi-family component saw an increase (SA: +19,000 units, or 9.1 percent, to 227,000 units; NSA: +600 units, or 3.6 percent, to 17,400 units).
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Seasonal adjustments seem to have brightened the picture for permits as well, turning the largest drop in total non-seasonally adjusted permits (NSA: -19,400 units, or 21.5 percent, to 70,900 units) since November 2008 into a much less dire-looking SAAR retrenchment (SA: -32,000 units, or 3.1 percent, to 1.007 million units). Regardless, however, the trend is still pointing up for now.
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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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