Poor housing start data and high federal budget deficits are two of the data sets that have PN Economics Editor Bill Wood concerned about the outlook for the rest of 2024. Recording below
Wood said the probability of a recession is, “in my opinion, moderately higher than it has been in previous months and quarters. Am I predicting a recession? Not yet.”
The trend in housing starts has traditionally been a reliable leading indicator of future economic growth. Spring and summer are is usually the best seasons for home construction, but second-quarter data hints that the market isn’t getting better, and it may be getting worse. That has ramifications not only for construction products, but also housewares, appliances, sporting goods and other end markets, Wood said.
Another concern is the inverted yield curve for U.S. Treasurys. For two full years, the 10-year Treasury Note constant maturity minus the two-year Treasury Bill constant maturity has been negative, which is an all-time record.
Wood also discussed the high federal budget deficit and the impact of the November election on the economy going forward.
Are there any positive signs? Wood cited the medical sector, thanks to demographic trends, and he said that eventually the housing market and have to rebound as well, to meet pent-up demand.