Today the Commerce Department's Bureau of the Census released its report on Housing Starts and Building Permits for November, 1995.

From October to November, privately owned housing starts rose 5.7% on a seasonally adjusted annualized basis. Typically, single-family home starts account for most of the month-to-month changes in this indicator. But, November was not a typical month. During November, the annualized rate of single-family starts was unchanged from the preceding month. The bond market rose on this news, apparently regarding it as a sign of further slowing of the economy. During the first 11 months of 1995, 1,257,400 housing units were started compared with 1,358,500 units for the same period in 1994 -- a decrease of 7.4%.

The seasonally adjusted annualized rate of housing units authorized by building permits in November was up 3.2% from October. Single-family permits were up 2% and multiple-occupancy permits were up 8% over October. During the first 11 months of 1995, l,234,200 permits were issued compared with 1,277,400 during the same period in 1994 -- a decrease of 3.4%.

What's all this mean? I went back and looked at the yearly totals for housing starts since 1985 and discovered that the unadjusted annualized rate of single-family housing starts for the first 11 months of 1995 was at the lowest level of the eleven-year period except for the two recession years of 1990 and 1991. Does this mean that we are slipping into a recession? It's too soon to tell. But, one thing we do know for sure is that, compared with eight out of the preceding ten years, fewer families were able to afford home ownership during 1995.

Retail sales reports today re-affirmed the post-holiday slowdown.

This morning, Mitsubishi Bank/Schroder-Wertheim reported that week-to-week sales at their survey sample stores were down 1.0% last week. This follows another decline of 2.6% the preceding week.

This afternoon, Johnson Redbook reported that retail sales for the first two weeks of January were down 0.9% from the same period in December. This means that the stores that Johnson surveys must have taken a pretty good hit during the second week of January, because the results for the first week indicated a 1.0% gain.

Elsewhere, super investor George Soros, speaking at a conference in Tokyo, expressed the opinion that the U.S. bond market would be a good investment during 1996. It appears that he foresees a further slowing of the U.S. economy.

Byline: Lafferty (MF Merlin)