Atlanta Fed Q1 GDP indicator at 0.2%, as US housing, auto sales remain below previous trends

Economic growth

SHARE THIS STORY

US house starts Mar15aUS housing starts are slowing so far this year, with February’s starts just below the million level again on an annualised basis.  This follows the steadily declining rate of home ownership, which is now back at 1995’s level of 64%.  And yesterday’s Case-Shiller report on home prices suggests the 10-City Index may well have peaked back in August.

The chart above looks at these developments in a longer-term context:

  • It compares housing starts on the vertical axis with auto sales on the horizontal axis
  • It is colour coded, so the years from 2000 – 2007 are in red, and the period since 2008 in green
  • It confirms that housing starts remain well below subprime era levels: auto sales only caught up last year
  • This weaker performance has occurred despite major support in terms of low interest rates and subsidies

2007 was the worst year in the early period.  But it still managed 1.4 million starts and 16m auto sales.  2014 was the best year in the later period, but starts were only 1m, although auto sales matched the 16m level.  And the best year since 2000 was in 2005, which saw 2m starts and 17m auto sales.

Equally worrying is that both markets are also showing clear signs of underlying weakness:

GDP Now Mar15Both markets are critical to the US economy, and to the US chemical industry.  The average car uses around $3.5k of chemicals, and the average new home around $15k, according to American Chemistry Council data.

Yet cars that are sold on 5 1/2 year leases won’t be replaced until the year 2020.  And building multi-home apartment blocks typically requires only half the materials of a single home.

This weakness, combined with the impact of the oil price collapse,  is confirmed by the Atlanta Federal Reserve’s new GDP Now index, as the chart shows.  This aims to provide a real-time snapshot of US GDP.  It was registering Q1 growth of just 0.2% on Monday.

PREVIOUS POST

Executives struggle to keep up as volatility rises with Great Unwinding

31/03/2015

It is looking more and more likely that the global economy hit a peak in Q2 last...

Learn more
NEXT POST

President Xi says more to China's economy than its growth rate

02/04/2015

China’s economy has not had a good start to the year.  Central bank gover...

Learn more
More posts
Businesses face “biggest imposition of red tape in 50 years” as Brexit begins
03/01/2021

Most companies had closed when the new EU-UK Trade and Cooperation Agreement (TCA) was finally annou...

Read
Your A to Z Guide to the reality of Brexit after 31 December
29/11/2020

(Picture credit Shutterstock) A.  Article 50 of the Lisbon Treaty set out the rules for leaving ...

Read
Chemistry & the Economy webinar on Thursday
10/11/2020

Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard...

Read
Pandemic redraws the map
11/10/2020

  Companies have entered a new landscape where the coronavirus has accelerated major paradigm s...

Read
What will happen if President Trump loses the election?
04/10/2020

I spent from September 2015 onwards, during the last US Presidential election, trying to explain why...

Read
Covid fears risk a Great Depression and major social unrest
27/09/2020

Governments spent most of February/March ignoring my warnings here on the dangers posed by the Covid...

Read
The state of the global economy in 2020
13/09/2020

Last Wednesday, I gave the opening presentation for the ICIS PET Conference and looked at whether th...

Read
Reality dawns for business as No Deal Brexit approaches
06/09/2020

I warned before the June 2016 Brexit referendum that Brexit was all about politics, and Boris Johnso...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more