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US Housing Market Resilience Persists; Current-Account Deficit Shrinks

US Housing Market Resilience Persists; Current-Account Deficit Shrinks

Dylan Jusino, Contributor

Talking Points:

- Building permits fall by -1.4% which less than the expected -3.5%

- Housing starts rise to 1.297 million versus the estimated 1.25 million

- Current account deficit shrinks by $24 billion

- See the DailyFX Economic Calendar for upcoming economic data and for a schedule of live coverage see the DailyFX Webinar Calendar.

See our longer-term forecasts for the US Dollar, Euro, British Pound and more with the DailyFX Trading Guides

Building Permits

Privately-owned housing units authorized by building permits in November were at 1.298 million. Last month’s print was up only 1.4% from October. But the November figure was +3.4% yoy. Single-family permits were at 862k. This is a 1.4% increase over October’s revised 850k. Also, 395k authorizations were provided for buildings of five units or more in November.

Housing Starts and Completions

The US Census Bureau and US Department of Housing and Urban Development joing reported that housing starts grew by 1.297 million in November. This marks a 3.3% increase above the revised October figure of 1.256 million and a 12.9% increase yoy. Single family housing starts increased by 930k marking a 5.3% jump over 883k in October. Finally, buildings with five units or more rose by 359k last month.

Privately-owned housing completions in November were just slighting below permits and starts at 1.16 million. The November figure was 6.1% higher than in October and 7.2% yoy. The 1.16 million completions was primarily comprised of 788k single-family homes and 353k buildings with five units or more.

Current Account Deficit Shrinks

In other news, US Department of Commerce reported that the preliminary U.S. current-account deficit fell to $100.6 billion in the third quarterof 2017. This is a sharp decline from the prior quarter at -$124.4 billion, revised lower from -$123.1 billion. The deficit now stands at 2.1% of current-dollar gross domestic product from 2.6% in the prior quarter.

The $23.8 billion decrease in the deficit reflected overall decreases in the deficits on secondary income and goods as well as increases in the surpluses on primary income and services.

Exports of goods and services and income increased by $23.4 billion in the third quarter to $858.7 billion. And imports of goods and services decreased $0.4 billion to $959.2 billion.

Here’s a summary of the recent US data that has a limited impact on the dollar:

- USD Housing Starts (MoM) (NOV): 3.3% versus -3.1% expected, from 8.4% previous(downward revision from 13.7%)

- USD Building Permits (MoM) (NOV): -1.4% versus -3.5% expected, from 7.4%previous (upward revision from 5.9%)

- USD Current Account Balance (3Q): $100.6b versus -$116.2b expected, from -$124.4b previous (downward revision from -$123.1b)

Chart 1: DXY 15-minute Chart (December 18 to 19, 2017)

Overnight the US Dollar Index traded slightly lower. But the US release of the US housing and trade data had a surprisingly limited impact on the index. Prior to the release of the data DXY traded around 94.55. At the time that this was written DXY traded slightly lower at 93.53.

--- Written by Dylan Jusino, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.