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US DATA: Housing Starts See Q4 GDPNow Tick Up To Highest Since Nonfarm Payrolls

US DATA
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The October New Residential Construction report has counterintuitively pushed the Atlanta Fed's GDPNow estimate for residential investment in Q4 into positive territory.

  • Real residential investment is now seen rising by 0.1% Q/Q annualized, vs -1.2% prior to the data (which showed starts falling more than expected, by -3.1%, at 1416k vs 1435k survey). Looking at the internal details, the Atlanta Fed model appears to expect a decreased drag from real private new housing construction over the quarter, with positive contribution from other factors including construction of manufactured homes and dormitories.
  • That would mean a flat contribution to real GDP in Q4, after consecutive drags in Q2 (-0.1pp) and Q3 (-0.2pp).
  • It  also means the highest estimate for Q4 growth (2.6%) since the initial nowcast (2.7%) was dragged down (to 2.3%) by the below-expected October nonfarm payrolls data on Nov 1.
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The October New Residential Construction report has counterintuitively pushed the Atlanta Fed's GDPNow estimate for residential investment in Q4 into positive territory.

  • Real residential investment is now seen rising by 0.1% Q/Q annualized, vs -1.2% prior to the data (which showed starts falling more than expected, by -3.1%, at 1416k vs 1435k survey). Looking at the internal details, the Atlanta Fed model appears to expect a decreased drag from real private new housing construction over the quarter, with positive contribution from other factors including construction of manufactured homes and dormitories.
  • That would mean a flat contribution to real GDP in Q4, after consecutive drags in Q2 (-0.1pp) and Q3 (-0.2pp).
  • It  also means the highest estimate for Q4 growth (2.6%) since the initial nowcast (2.7%) was dragged down (to 2.3%) by the below-expected October nonfarm payrolls data on Nov 1.