Housing Starts, Permits, CPI All Miss

Tyler Durden's picture

Following last week's jump in headline PPI some expected a reversal in the recent trend of BLS-measured disinflation. No such luck: moments ago the BLS reported that according to its hedonic adjustments, May headline consumer price inflation rose by 0.1%, below expectations of a 0.2% increase, and up 1.4% from the prior year. Alternatively, core CPI, excluding food and energy rose by 0.2% in line with expectations, and up 1.7% from past year. According to the BLS, "The shelter index rose 0.3 percent and accounted for more than half of the seasonally adjusted all items increase in May. The energy index rose modestly, with the gasoline index flat but increases in the electricity and natural gas indexes accounting for the rise. The food index, however, turned down in May, with the food at home index falling 0.3 percent." Should the recent surge in WTI continue, look for this "disinflation" to not persist, and certainly look for it to end as soon as the PBOC decides the time to get involved in markets returns.

Breaking down the CPI by component, fuel saw a -2.9% drop, while food supposedly declined -0.1% in May. This was offset by utility gas service rising 2.4% (and Energy services posting a broad 1.2% price increase), even though the Industrial Production data released previously by the Fed showed an underperformance in utility businesses. Go figure.

Elsewhere, the housing market, despite some so-called recovery, continues to be moribund, with both housing starts (914K, below expectations of 950K), and permits (974K, Exp. 975K) missing expectations. And the miss would have been much worse if one were to exclude the multi-familiy (rental) housing units, which after plunging by the most since 2006 last month, which once again spiked from 245K to 306K even as single-family housing unites stayed essentially flat in May at 599K vs 597K the last month. More notably, the single-family housing market was only boosted thanks to a jump of building in the south, where units jumped from 295K to 331K, while unit starts dropped in the Northeast, Midwest, and the West.

Seasonally-adjusted Starts data showing that the single-family housing market remains virtually unchanged for the past 5 years.

The divergence is even more pronounced on a non-seasonally adjusted basis.

Source: Census

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SheepDog-One's picture

Fuel saw -2.9% drop? Where, in Outer Mongolia? Certainly not in the US gas here is up .20 cents in 2 weeks.

And Bernank is still around? Far longer than the 40% approval rating Messiah intended.

fonzannoon's picture

Bernanke will go out with stawks at all time highs and inflation (as measured by shitheads) at all time lows.

He rigged the game and won it easily.

SheepDog-One's picture

So then we never needed the Bearded skirted egg Deity from Princeton....the Magic Man.....just needed a box with sum wires!

idea_hamster's picture

Gotta say that the "seasonal adjustment" to those multi-family stats between the last two charts is either wrong or a f'n waste of time and effort.

Where's the damping of volatility?  The two charts look pretty much just as bad as each other -- all SA is doing is moving crap around.  

It's like we're playing One-Card Monty, and we still always lose!

knukles's picture

There is no organic self perpetuating recovery, FFS
The world is living on printed money and government spending.. and barely making it at that!
Tapering brings the world to its knees, next rout of crashes and panics.
Look what just talking about it has done.

It in and of itself is prima facie evidence that all's shitty and not even warm anymore.

One More Time: There is no fucking recovery. 
One More Time:  They cannot back off now, without reformation to the financial system and significant changes in fiscal policy... the leeches upon the system must be removed...

One More Time....

Shad_ow's picture

Give that man a cigar!

If the media had b*lls this would be the main topic of discussion and the possibility of our joining the fight in Syria would not exist.

SheepDog-One's picture

Yep and they've got the global war all staged and ready to go, also banks can confiscate whatever they feel like in the next round of implosions. 


HardAssets's picture

Something to ponder (I sure havent figured it out) - - - under what conditions would it be advantageous for the banks to pull the plug on the economy, bringing about a deflationary Great Depression ?

Remember, they own the politicians, so they can write new rules any way they want. They could 'nationalize' threatened banks, in the same way the Fed is said to be 'federal'. (That is, the taxpayers' resources are their's to grab. Of course, they would frame it as though they were looking out for depositers and Joe Citizen. The media pressitutes would parrot the talking points to a public who is basically clueless on such matters.)  They could bring about a worldwide crash, with worldwide crashes of governments . . . . and offer a new global 'solution' afterwards. World currency and world 'oversight'. Is this in the bankers interests ?

Sometimes we're guilty of thinking, "They can't do X because it would completely trash the economy . . . "  (I often think this myself).

As a mental exercise we might ask, "Why might they want to crash it, and under what conditions would they benefit ?"

BTW - its gonna crash, one way or another. Would not the bankster control freaks want to also control that crash if possible ?

We're outside the realm of economics - and looking at criminal behavior and the game of Power.

What might they do ?

markettime's picture

@hardassets- I have thought of something similair to what you wrote above. These people not only collect 2 and 20 from thier clients, they also bet against them in a down turn of the markets. All it takes is someone re-programming the algos and everything would drop. But what would they gain by crashing the markets? I am thinking they would put the final nails in the coffin of the consitution and take away what little freedoms are left anywhere in the world. Total control of everyone's lives through electronic currency. If you have spent your medical quota for the month your next medical purchase will be declined. Not only would they omni-present via the surveilance programs, they could control everything everyone does. 

Kayman's picture

No one trusts the system. Even the criminals don't trust each other. Therefore no recovery.

Imagine Too Big To Fail as government policy at the turn of the 19th century. Standard Oil would control all energy !

Until the Financial Dinosaurs are slaughtered, until unsubsidized private sector middle class jobs arrive, the economy will continue to be smoke and mirrors. 

insanelysane's picture

"Inflation at all time low."

As much as we love to bash the Fed, they must have found some type of correlation between gold and silver prices and inflation which would explain why gold and silver prices are down to unrealistically low prices and inflation is also lower than it should be.

El Oregonian's picture

Taper, just like a turd, tapered. The whole thing is full of shit.

Dark_Horse's picture

Yes, Bernanke going out on "top" is likely to occur, but it's just like the financials circa 2005.

There is the other side of this, the reality to set in, like the economy circa 2007 and on.

Makes me wonder how they will "Claw-back" Bernanke shenanigans ?


Loucleve's picture

$4 for regluar.

$4.40 for premium

Just in time for Summer Drive.  or whats left of it.

buzzsaw99's picture

<--- cpi lies

<--- cpi tells only truth

DeadFred's picture

Really cheap way to get yourself a bunch of green arrows dontcha think? LOL

MisterMousePotato's picture

An outstanding illustration of the point Fred was trying to make. One suggestion, though ... next time include a link to google images.

Perpetual Burn's picture

It is impossible to know the "real" rate of inflation?

venturen's picture

Wow this should be good for a 3% ramp in the markets!

Silverhog's picture

From a government that probably records how many times I take a shit is not a credible source of news. 

youngman's picture

They need to give Balckrock more money at 0% to buy all these new homes to put in their rental pool....that should do it...

asteroids's picture

Remeber, this is a number from BLS. (Bunch of Lying Scum). Ignore it.

involuntarilybirthed's picture

Single vs more multi units says enough about our new split economy and ideas about the future of the US. 

apberusdisvet's picture

If Bernanke waves his magic wand, maybe the 20 million (yes it's that high)in shadow inventory will disappear and start a real recovery.  Or the Dems and Rinos can offer amnesty to any illegal who will take a s/f home and fix it up (with grant money from the taxpayer, of course).

USisCorrupt's picture

It's funny that you say that. My Bosnian friends tell me that many of their relations that got that 20% downpayment from the tax payer when they bought their first homes have now loaded up the debt on their homes and took the money back home to buy a new home FREE & CLEAR and stick the good olde tax payer here with their note. Way to FUNNY!

Peter Pan's picture

You can all laugh as much as you like, but the truth is that housing ownership is slowly but surely going to be institutionalised. As far as Ben and his masters are concerned everything is going according to plan.

HardAssets's picture

Fed Chairman's job #1 - 'What's in the best interests of the banks that own it ?"

Secondary consideration - "What's in the interests of the federal government as an institution ?' (which is one instrument they use to advance the owner banks interests. Screwing up a particular administration in office may be in the banks interests. They can always change the face of those in office & replace it with another that they own.)

Everything else - employment, cost of living for people, etc - - - -not really relevant, except for jaw boning.

Figure out the above, and you'll figure out what a Fed Chairman is likely to do over the longer term, and not be diverted by smoke & mirrors.


Ignatius's picture

"... all miss."

Therefore... gold drops.

I think I'm finally 'getting' this economics thingy.

Uncle Zuzu's picture

Is this a seasonal adjustment on your chart or are you happy to see me?

CheapBastard's picture

House sales sinking in my area still...several houses have been on the market for several months now...I don't believe MSM...I don't see any sign of improvement now with mortgage rates higher and wages stagnant.


Unless they hand out more public housing...oops, I mean zero-down houses, the housing market will continue to deteriorate as many economists have said.

I do see acre after acre of beautiful raw land ebing torm up for more apartment complexes...they're building cheap apartments like crazy...."first 3 months free" the oversupply is so greta right now.

ebworthen's picture


And the markets are up because bad is good, and when good is good it's fake, and any bad news is worse than what is reported, and debt is good - just like part time low wage jobs and foreclosures and Ben's beard.  All good, except when it's bad.

lunaticfringe's picture

Everytime I see that CPI broken down I note that it never accounts for my rising property taxes and oddly, rising insurance costs beyond healthcare. It's as though those things do not exist.

ebworthen's picture


All the things you have to pay or have to function, aren't there, and yet they call it "Consumer Price Index". 

Lately it's been eggs - they're going to Mexico apparently:  http://blogs.wsj.com/economics/2013/06/14/egg-prices-take-flight/.

lunaticfringe's picture

Because of the grand recovery, my local tax assessor re assessed my home's value 20 percent higher than last year. At that annualized pace, my home should double in price in 4 years. Woohoo!

Happy days are back mf'ers!

Quinvarius's picture

It isn't inflation if I print enough money to buy the world but only put it on deposit at the Fed?  LOL.  Most of what they have printed in the last 4 years is sitting at the Fed.  One can only assume they are hoping the toxic and dead derivatives the Fed bought will someday gain enough value to be flipped back to the banks at a nice profit for the bankers.  Maybe that was the original plan.  But it has some flaws.  Flaws like; that MBS garbage was toxic in a booming housing market because it it was just plain crap the whole time and The US government is still flooding the market with Treasuries and the Fed needs to keep buying them.  In addition, LOL.  All they have done is subsidize the creation of even more toxic MBS and more government debt that the Fed will have to eat all of.

QE going away?  LOL.  No.  They were doing 5% a year before 2008.  It has grown bigger almost every year since then.  It can only grow bigger.

ebworthen's picture


It's insanity, with cheerleaders.

orangegeek's picture

Weekly Philly Housing Index turned down a few weeks ago.




For now, we'll say the trend is down until we see a reversal, shall we? 


Yes folks, the age of obfuscation and dis-information has arrived.

put_peter's picture

And this is WITH QE...

Loucleve's picture

Fuel prices saw a decrease?  These morons must live in Saudi Arabia.

Where I live, regular is $4 a gallon, and premium is $4.40.