After an uptick in March, both US housing starts and permits disappointed again in April. Housing starts dropped by 10.6% M/M in April to a total level of 523 000, while the previous figure was upwardly adjusted. Weakness was mainly based in multifamily starts (-24.1% M/M), but also single family starts (-5.1% M/M) dropped. Building permits fell by 4.0% M/M in April to a total level of 551 000, while the consensus was looking for an increase to 590 000. In the permits too, the decline was led by multi-family (-8.8% M/M) permits, while single family ones (-1.8% M/M) showed a more moderate decline. Housing under construction dropped too in April, falling by 0.9% M/M, while housing completed rose by 4.1% M/M. While we were hoping to see an uptick in the US housing market, boosted by the spring selling season, this awful figure suggests that housing will likely remain weak in the coming months.
US industrial production stabilized in April, while the consensus was looking for an increase. The details show that weakness was based in the manufacturing sector (-0.4% M/M), while mining (0.8% M/M) and utilities (1.7% M/M) remained strong. The poor performance of the manufacturing sector was mainly due to weakness in motor vehicles and parts (-8.9% M/M) due to parts shortages from the Japanese earthquake, but also other manufacturing industries performed disappointingly in April. Capacity utilization fell from 77.0% to 76.9%, while an increase to 77.6% was expected. On a yearly basis, production slowed from its peak of 7.75% Y/Y in June last year to 5.00% Y/Y in April and is expected to slow further in the coming months as supply disruptions will probably continue to hit the industry in the next few months.