In this series, I’ll focus on stats that look pretty cool, but aren’t necessarily something that answers any questions (Wait a second…isn’t that pretty much the case for all market stats?).
In Floyd Norris’ Blog: Notions on High and Low Finance, he looks at housing starts in a different way in his post Housing and Recessions . I am not sure he subscribes to his theory or its just an interesting pattern.
Housing starts have now fallen for the 11th consecutive month yet a potentional recession goes against conventional wisdom. Here are the other 4 times since 1959 that an 11-fer has happened.
- November 1973 was the 11th month. A recession began that very month.
- April 1980 was the 11th month. A recession began in January of that year.
- November 1981 was the 11th month. A recession began in July of that year.
- February 1991 was the 11th month. A recession began the previous July.
What about the comments from the Fed  that they will hold firm or raise interest rates because the economy is good?
Seems like housing is a lagging indicator, not a leading indicator.