I have been calling for some time for “a kick” in the US economy that would begin with rising auto sales and multifamily starts and then spread throughout the whole economy into a roaring boom.
Auto sales have been rising and now multi-family is moving higher
According to census, 5 unit or more starts are up 16% from last month and up 80% year over year. Right now, multi-family is pulling down 250K SAAR. I still think a rise to mulit-family at 1 million SAAR by late 2012, earl 2013 is completely realistic though unprecedented in the last 40 years
However, I caution that this is not yet the “kick” I am looking for These stats are all moving in the right direction but for a full on reinforcing cycle we need more. I would also like to see and end to government sector layoffs. This is something that I expected we would see by now, but it looks like we could have more layoffs going into early next year.
Still, the fundamentals are telling me the government layoffs are on their last leg. With the sales tax revenue increases that we are having and class sizes where they are I just don’t see many more parents going for even larger class sizes. And, remember that government worker and teacher are largely two phrases for the same thing.
What do I want to see?
I want to see multi-family cross 400K SAAR. I want to see autos pass 14.5M SAAR. I want to see two months of government payroll growth. Then we will call the kick.
Baring world wide financial collapse I think the fundamentals would then call for real US growth in excess of 5% per year moving into 2013.