Now that was a bad Housing Starts report! Just like the recent delayed report on Retail Sales, it may have been better if the finally released report on Housing Starts for the month of December was just swept under the rug. While economists were expecting the headline print to come in at a SAAR level of 1.256 million, the actual reported number came in at 1.078 million, missing expectations by 178K. Using our Economic Indicator Database, we found that there have only been five other monthly Housing Starts reports that missed expectations by a wider amount than the December print with the most recent occurring 12 years ago in 2007!
The table below lists the ten largest prior misses relative to expectations in the monthly Housing Starts report going back to 1998. For each instance, we also include the performance of the S&P 500 and the S&P 500 homebuilder group on the day of the report. While you would expect pretty substantial weakness following a miss of such magnitude, the results are pretty much mixed. Both the S&P 500 and the homebuilders were each up on the day in five instances and down on the day in the other five. In the case of the S&P 500, the bias was ever so slightly to the upside, while for the homebuilders the bias was slightly to the downside.