US Existing Home Sales Drop To 9-Month Low


US existing home sales fell by 4.9% in January to 4.82 million. This is the lowest level since April of last year. The western region remains by far the weakest region while the south remains the strongest. Months supply remained relatively steady at 4.7 months worth of supply in the market.

A Contrary Opinion On The US Employment Report


One of the main features of the current recovery is the drop in the potential growth rate.  In every other recovery since WW2, real GDP has risen back to potential as the recovery got going, thereby closing the output gap.  This time around, the output gap has narrowed because potential GDP has been revised down.

$200 Lumber?


The last time 10 year TIPS derived breakeven inflation was this low in the autumn of 2010, lumber was around $200/ft.  The break in inflation expectations since last August suggests lower lumber prices are ahead.