Few observers have ever seen anything like the economic data that will be released in the coming week, with the consumer price index and housing starts each expected to breach records dating back to the late 1940s.
With the global economy descending into a nasty recession, the October data could send a chill down the spine of policymakers, who are pulling out all the tricks in their tool kit to prevent a wider meltdown.
As everyone knows, this downturn began in the housing sector, with a global credit bubble inflating U.S. home prices, and homebuilders responding with a frenzy of construction. Now that the bubble has collapsed, everyone is looking to housing for any sign that the worst may be over.
Treasury Secretary Henry Paulson said last week that “market turmoil will not abate until the biggest part of the housing correction is behind us.”
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It’s not behind us yet.
- A d v e r t i s e m e n t
In October, credit markets essentially stopped working, which constrained potential home buyers’ ability to find a mortgage. For home builders, it was the latest in a thousand cuts that have destroyed confidence about their industry.
After housing starts tumbled to a seasonally adjusted annual rate of 817,000 in September, the second-lowest level on record, economists surveyed by MarketWatch expect starts to fall to 776,000 in October, a post-war low that would knock out a record set in January 1991. The data are slated to be released Wednesday at 8:30 a.m. Eastern time. See Economic Calendar.