Privately-owned housing starts showed continued strength in January, coming in at a seasonally-adjusted annual rate of 1.567 million units, according to the US Census Bureau. This was 10 percent higher than the 1.42 million expected by most economists and 21.4 percent higher than in January 2019. The already strong December number was also revised upward from 1.608 million units to 1.626 million units.

As I mentioned previously, housing construction is now the main driver of private investment spending, compensating for continued weakness in non-residential fixed investment. This strong showing, if continued, should spill over into new durable goods orders in coming months and provide a solid base for GDP growth through at least election day in November.