Hale Stewart

About the Author Hale Stewart

Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM from the Thomas Jefferson School of Law in domestic and international taxation where he graduated Magna Cum Laude and is also a Chartered Asset Manager, Chartered Wealth Manager and Chartered Trust and Estate Planner from the American Academy of Financial Management. He is the author of the book US Captive Insurance Law. You can read him daily at the Bonddad blog (www.bonddad.blogspot.com).

More Signs Point To A Slowdown In Q1 U.S. Growth

Beginning in autumn 2013 and continuing through spring 2014, the housing market stalled in response to higher interest rates. Because of that, I anticipated an economic slowdown at about the end of 2014. More signs are emerging that the slowdown has occurred.

First of all, here’s a look at housing permits (blue, averaged quarterly YoY) with real YoY GDP (red):

While there is no 1:1 correspondence, the leading nature of housing is clear.

Yesterday ISM manufacturing for February was reported as the least positive in 13 months:

Building construction declined (red in the graph below) -1.1% in January, and has been negative YoY for the last 3 months. I’ve also included monthly housing permits (blue), to show you that construction follows permits with a lag:

Now here is an update of the Atlanta Fed’s GDPNow calculations after yesterday’s economic data:

The forecast has now declined to +1.2% annualized.

Last year the housing market never really went negative, nor did that other big consumer durable purchase, motor vehicles. So, while I think we are seeing a real slowdown, undoubtedly also influenced by developments like the West Coast port strike, weakness in Europe, and strength in the dollar, I do not believe this is in any way a recession indicator, and I believe it will be transitory.


According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, blogger Hale Stewart has a total average return of 5.8% and a 67% success rate. Hale Stewartis Ranked #2583 out of 4254 Bloggers

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