According to the Fed’s Beige book released last week, “economic activity expanded at a moderate pace” recently with housing leading the way. That is reflected in the data released.

Housing starts were at the highest level since June 2008. The monthly increase was a related to a surge in multi-family starts (there is significant month-to-month variability in multi-family starts), however single family starts were up 28.7% year-over-year, a strong increase too. And even with the recent increase in starts, housing starts – especially single family starts – are still low, and we will probably see continued growth over the next few years. Since residential investment is usually the best leading indicator for the economy, this suggests the economy will continue to grow over the next couple of years.

Of course manufacturing is seeing more sluggish growth (as reflected in the Empire State and Philly Fed manufacturing surveys for April). And initial weekly unemployment claims have increased recently – perhaps related to the sequestration budget cuts.

But overall the data suggests continued growth (Source: Calculated Risk).