Key Rate Indices

State of the Market

Below is a summary of some of the most important recent economic releases:

Personal Consumption Expenditure (PCE) in March was 0.3% month-over-month (MoM) and 2.7% year-over-year (YoY).

The Federal Reserve’s preferred inflation measure, PCE, was somewhat re-accelerated in March. This topic will be discussed at length later in the newsletter.

Real GDP increased at 1.6% Annualized Rate in Q1

The U.S. economy grew at a slower pace than expected in the first quarter of 2024, with real GDP expanding at a 1.6% annualized rate. This growth rate is lower than the 2.6% annualized rate recorded in the fourth quarter of 2023.

Weekly Initial Unemployment Claims Decrease to 207,000

The number of Americans filing new claims for unemployment benefits fell to 207,000 in the week ending April 20, 2024, marking a decrease from the previous week’s revised level of 215,000. This decline suggests that the labor market remains resilient, despite concerns about a potential economic slowdown.

American Institute of Architects (AIA): “Architecture firm billings retreat further in March”; Multi-family Billings Decline for 20th Consecutive Month

The AIA’s Architecture Billings Index (ABI) indicated a further contraction in architecture firm billings in March 2024, with the index falling to 47.2 (any score below 50 indicates a decrease in billings). The multi-family sector has been particularly affected, with billings declining for the 20th consecutive month, highlighting the ongoing challenges faced by the multi-family housing market.

Multifamily Starts Down Big – 44% YoY in March    

The U.S. housing market showed mixed results in March 2024, with overall housing starts and building permits experiencing declines compared to the previous month. Single-family housing starts and authorizations decreased from February but demonstrated YoY growth, while multifamily starts and authorizations saw significant YoY declines.

Single-Family Housing (SFH)

  • Starts in March were down 12.4% from February.
  • Permit authorizations in March dropped 5.7% from February.
  • Starts decreased in March but were up 21.2% YoY.


  • Starts for units in buildings with five or more units were at a rate of 290,000.
  • Permit authorizations for units in buildings with five or more units were at a rate of 433,000.
  • Multi-family starts decreased in March compared to February and were down 44.3% YoY.


  • Privately-owned housing starts in March 2024 decreased 14.7% from February and 4.3% from March 2023.
  • Building permits in March 2024 decreased 4.3% from February but increased 1.5% from March 2023.
  • March 2024 housing starts data came in well below expectations, despite upward revisions to January and February figures.
  • The mixed results suggest volatility and potential challenges in the housing market, with multi-family starts showing significant YoY declines while single-family starts demonstrate more resilience.

Inflation Concerns Persist

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, increased by 2.8% in March 2024 compared to the same month a year earlier, surpassing economists’ expectations.

Some thoughts from this data release:

Housing inflation is still keeping overall inflation numbers higher than desired.

  • Shelter (CPI) increased by 5.6% year-over-year in March 2024, a decrease from 5.8% in February and a significant drop from the cycle peak of 8.2% in March 2023.
  • Housing (PCE) rose by 5.8% year-over-year in March 2024, slightly lower than the 5.8% increase in January and a notable decline from the cycle peak of 8.3% in April 2023.
  • Asking rents are, and have been, mostly flat YoY, indicating that Shelter (CPI) and Housing (PCE) measures will continue to slow down over the next 12 months.

Once accounting for housing inflation data, PCE and CPI are both very close to the Fed’s target inflation range.

  • The PCE Price Index is at 2.5%, Core PCE Prices are at 3.0%, and Core minus Housing is at 2.4% on a 6-month annualized basis.
  • The PCE Price Index, Core PCE Prices, and Core minus Housing, are slightly above the Federal Reserve’s target on a 6-month annualized basis.
  • The Fed targets 2% inflation, a level that the core PCE has been above for the past three years.

Persistent inflation continues to push back interest rate cuts.

  • “Given the momentum for the economy and prices, we don’t expect the Fed to strongly consider easing monetary policy until its September meeting at the earliest,” wrote Nationwide economist Ben Ayers.” [CNBC]
  • Rate futures are pricing in about a 17% chance of no rate cuts at all this year, down from 20% before the March report, but still elevated compared with a few weeks ago, when two or even three rate cuts this year was seen as most likely.

For more information, questions, or comments, please call or email.

Drew Daly

Managing Partner

C: (206) 228-6166