— Joel Naroff, Naroff Economic Advisors
US homebuilding activity dropped in April; however, revisions of the preceding month's readings suggested that homebuilding activity continued improving. The Census Bureau reported on Tuesday that housing starts declined 2.6% to a seasonally adjusted annual pace of 1.17M units last month, following March's upwardly revised 1.28M-unit pace and falling behind expectations for a 3.7% rise to a 1.26M-unit pace. Analysts suggested that a slowdown in homebuilding activity had been driven by unusually rainy weather in California. On an annual basis, housing starts were up 10.5% compared to the same period a year ago. Meanwhile, building permits fell 2.5% to a seasonally adjusted pace of 1.23M units, whereas analysts anticipated a slight climb of 0.2% to a 1.27M-unit pace in April. With building permits higher than housing starts, homebuilding activity is set to rebound in the upcoming months. Later in the day, the Federal Reserve reported that industrial production in the United States rose 1.0% in April, the largest gain since February 2014, while analysts expected industrial output to climb just 0.4%.
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