There was a heavy flow of data this week, and the overall view (especially in the U.S.) is that the economy is firing. Here’s a quick rundown of the key results this week:
U.S retail sales jumped a much stronger-than-expected 5.3% in January, more than making up for lost time in the prior two months (each down 1% or more). Core sales (excluding autos, gas and building materials) were up a massive 6.2%, and a similarly-hefty 6.5% from a year ago.
U.S. industrial production rose 0.9% in January, almost double expectations and marking a fourth consecutive increase. Impressively, industrial output is now down less than 2% from pre-COVID levels, carving out a textbook V-shaped recovery—the hole was more than 16% deep at one point.
Housing activity is sizzling. Existing home sales rose 0.6% in January to a 3-month high, and there’s far from enough supply coming to market to satiate demand. The months’ of inventory stood at just 1.9 in the month, and prices are rapidly accelerating as a result. Homebuilders? Yeah, they’re cool with this… sentiment picked up in February and is holding above levels seen at the height of the housing bubble in 2005. Starts did back off in January, but they did so from 15-year highs; and permits continue to flare higher pointing to ongoing strength ahead.
|Table 1 - Market Performance|
|Source: BMO Economics, Bloomberg|