Ian Shepherdson Month Quotations

One steep drop in housing starts does not make a downward trend, especially in a month which was very wet in the West and very cold in the Northeast. Still, the data are consistent with other signs of a softening housing market, most notably the drop in homebuilders' confidence. What really matters, though, is whether sales will fall fast enough to turn a softening into a collapse.

Overall, the survey is still very strong, but we hoped for a bit better. A further decline next month would be a bit disconcerting, but there is no reason to expect that.

The data suggest real consumers' spending rose marginally last month -- but we still expect only a 1.5 percent annualized increase in the fourth quarter,

At this level the index is consistent with spending growth of about 3.5 percent, in line with recent economic data. But watch out for a dip next month in the wake of the renewed spike in gas prices. Overall, though, quite robust.

Despite undershooting the consensus, these numbers do not look too bad to us. Confidence might well dip further -- job fears hit a 28-month high this month -- but the big plunge looks to be over.

Despite undershooting the consensus, these numbers do not look too bad to us, ... Confidence might well dip further -- job fears hit a 28-month high this month -- but the big plunge looks to be over.