The U.S. Census Bureau reported housing starts increased 12.2% to a seasonally adjusted annual rate of 1.575M units in August. The data for July was revised down to 1.404M units from the previously reported 1.446M units, reflecting a drop of 10.9% vs. 9.6%. Single-family housing starts increased 3.4% to a rate of 935K units. A significant portion of August’s housing starts is attributable to housing projects with five units or more which saw an increase of 28.6% to a rate of 621K units. New residential building permits, a proxy for future construction, fell 10.0% to a seasonally adjusted rate of 1.517M units. New residential building permits are running 14.4% below their August 2021 level. Single-family permits were down 3.5% from July’s upwardly revised 932K, while multifamily permits declined 18.5% to 571K. The decline in building permits was broad-based, led by the Northeast (-15.2%), followed by the South (-13.5%), Midwest (-6.5%), and West (-1.1%). Housing completions were 5.4% below July’s 1.419M units. Single-family housing completions at 1.017M, were 0.4% above July’s revised reading, while multifamily completions were down 20.7% to 318K. The number of houses approved for construction but not yet started dropped 2.7% to 290K units, with the backlog for single-family housing dropping 3.4% to 143K.

The Federal Open Market Committee (FOMC) announced the raising of its benchmark federal funds rate by 75 basis points, putting it in the range of between 3.00% and 3.25%. This is the fifth rate hike since March and the third consecutive FOMC meeting ending with a 75 basis point climb. The FOMC in its statement said that “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.” The FOMC also projected an increase of another 125 basis points over the next two meetings to a 4.4% fed funds rate. The median fed funds rate is expected to be 4.6% in 2023, 3.9% in 2024 and 2.9% in 2025. Inflation for headline / core is projected to be 5.4% / 4.5% in 2022, 2.8% / 3.1% in 2023, and 2.3% / 2.3% in 2024. The median unemployment rate is predicted to be 3.8% in 2022, 4.4% in 2023 and 2024, and 4.3% in 2025. The 2022 GDP forecast slumped to .2% versus the 1.7% estimate in June. The annual GDP is forecast to grow 1.2% in 2023, 1.7% in 2024 and 1.8% in 2025.

The Labor Department reported an increase in initial jobless claims for the week ending September 17th. The seasonally adjusted initial claims reported in at 213,000, an increase of 5,000 from the previous week’s revised level. The previous week's level was revised down by 5,000 to 208,000. The four-week moving average, which smooths out volatility was 216,750 a decrease of 6,000 from the previous week’s revised average. Of the 53 states and U.S. territories that report jobless claims, 35 reported increases and 18 reported declines. Michigan (+6,167), and Massachusetts (+2,559) led the increase in initial claims, while Indiana (-1,061) and Arkansas (-464) saw the most decreases. For the week ending September 10th, the number of people continuing to claim unemployment also known as the insured unemployment rate was 1.0%, unchanged from the prior week. Continuing claims were reported in at 1.379M down 22,000 from the previous week’s downwardly revised level. The continuing claims 4-week moving average was 1,404,750, a decrease of 8,250 from the previous week’s downwardly revised level. For the week ending September 3rd, 1.296M people were receiving jobless benefits through state or federal programs, an increase of 96,414, from the previous week’s level. There were some 11.250M weekly claims filed for the comparable week in 2021.