Housing Starts and Building Permits Surge In September

A blog about business and economics.
Oct. 17 2012 8:39 AM

Housing Starts and Building Permits Surge In September

Some really big news on residential construction (a key weak spot of the economy today) as September housing starts rose 15 percent month to month and building permits rose 11.6 percent.

The press often pays more attention to the starts than the permits, because construction is more economically significant than paperwork. I think this is backwards, since the Census Bureau can estimate permits much more precisely (it's paperwork!) and in the long term the two series track each other. Which is to say that given the huge margin of error in the starts estimate you might dismiss this as an outlier, but the permitting data has a much smaller margin of error and says something similar. In year-on-year terms, starts are 34.8 percent above their September 2011 level (+/- 18.2 percent) while permits are 45.1 percent (+/- 1.8 percent).

Advertisement

That's all great news for the economy. I also think it's a clear sign of the power of QE3 and the myth of "long and variable lags." The idea that monetary policy works via long and variable lags is a great bit of ass-covering for central bankers who don't want to be held responsible for outcomes. But since monetary policy primarily works through expectations, it primarily works very quickly. QE 3 was clear, forceful, and yet also relatively modest so a short-term one-off surge in investment activity (housing starts) and durable goods purchases (car sales) followed by a speedy return to the trend growth path is exactly what we should expect. To get an accelerating recovery you'd need stronger forward guidance and a clear commitment to avoid slamming the breaks even if inflation goes up to Reagan/Volcker era average of 4 percent.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Doublex

Crying Rape

False rape accusations exist, and they are a serious problem.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

How Will You Carry Around Your Huge New iPhone? Apple Pants!

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

Television

The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Lifetime Didn’t Find the Steubenville Rape Case Dramatic Enough. So They Added a Little Self-Immolation.

No, New York Times, Shonda Rhimes Is Not an “Angry Black Woman” 

Brow Beat
Sept. 19 2014 1:39 PM Shonda Rhimes Is Not an “Angry Black Woman,” New York Times. Neither Are Her Characters.
Behold
Sept. 19 2014 1:11 PM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
Weigel
Sept. 19 2014 9:15 PM Chris Christie, Better Than Ever
  Business
Moneybox
Sept. 19 2014 6:35 PM Pabst Blue Ribbon is Being Sold to the Russians, Was So Over Anyway
  Life
Inside Higher Ed
Sept. 19 2014 1:34 PM Empty Seats, Fewer Donors? College football isn’t attracting the audience it used to.
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
  Arts
Brow Beat
Sept. 19 2014 4:48 PM You Should Be Listening to Sbtrkt
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Medical Examiner
Sept. 19 2014 5:09 PM Did America Get Fat by Drinking Diet Soda?   A high-profile study points the finger at artificial sweeteners.
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.