Housing starts in April fell by 2.6% from March and came in significantly below expectations given the relatively strong March report. Starts for single-family homes rose 0.4%, but permits and completions both fell by 4.5%. So, overall single-family home construction has been and will likely continue to be uneven. The biggest weakness in the report relates to multi-family homes where starts fell 9.2%. And while permits for multi-family dwellings rose by 1.4%, completions dropped by 17.2%.

On the brighter side, industrial production rose 1% in April. And the manufacturing sector bounced back a full 1% in April as well, more than compensating for the March contraction. That is quite a reversal for the manufacturing sector which was flat for last year. In fact, industrial production and manufacturing are showing the strongest reports in over 3 years. Production of motor vehicles, business equipment, and consumer goods were all up. However, production of high-tech products and construction supplies were down. (The report on construction supplies helps corroborate the April housing report.) Mining was up 1.2%, possibly due to regulatory changes out of Washington. Utility output was up 0.7% in April over March’s record 8.2% jump that was weather-related.  

These reports combined with a number of other reports so far this month show mixed results for the US economy. Industrial production, manufacturing, and employment have shown strong indications, but retail sales, housing starts, and increases in consumer prices have indicated weakness. As housing is an important driver of economic growth and activity, the mixed news on the US economy will probably continue for the next few months.