Plunging Housing Starts May Slow GDP Growth
U.S. housing starts posted a monthly decrease of 9.9 percent in June. In the second quarter, housing starts fell 8.9 percent from the prior quarter, the largest drop since the first quarter of 2009. The decline in starts could add more downward pressure on U.S. real economic growth. History suggests that depressed Q2 housing starts should translate into a 0.6 percent drag on annualized real GDP growth during the same period.
U.S. HOUSING STARTS VS. CONTRIBUTION TO REAL GDP GROWTH FROM RESIDENTIAL INVESTMENT