Housing starts fell by more than 30% month over month, to a level below the average economist estimate. More notably, building permits (our preferred leading indicator of the housing market) also saw a sharp drop, from 1,356k to 1,074k (est. 1,000k). This is of particular interest as it was one of the few remaining positives on our Business Cycle Checklist (and will flip to a negative if the moving averages cross downwards).
You can see the clear relationship the level of building permits has with the US business cycle here (US recessions as defined by the NBER are shaded in red):
.png)
If you would like to learn more about this indicator and the many others that Lex and I follow as professional investors, check out our Million Dollar Traders online course and join me for my weekly updates at the Trading Club.
Disclaimer: For educational purposes only. Even though we do our best to provide reliable data, you should not trade based on this information. For more information go to www.milliondollartraders.com
© Copyright 2020 Lex van Dam Financial Education. Further distribution prohibited.
