Housing Starts Pull Back in April but Top Estimates; Philly Fed Sours — Evening Brief – 05.21.26

U.S. housing starts fell in April but came in above expectations, while a closely watched regional manufacturing gauge delivered a sharp surprise to the downside, and the labor market offered a modest encouraging signal, according to data released Thursday.

Housing starts declined 2.8% month-over-month in April to a seasonally adjusted annual rate of 1.465 million, topping the 1.410 million consensus estimate, the U.S. Census Bureau reported. March’s figure was revised slightly higher to 1.507 million from an initial read of 1.502 million. On an annual basis, starts rose 4.6% from the April 2025 rate of 1.400 million. Single-family starts, however, slid 9.0% from March’s revised 1.022 million to a rate of 930,000.

Building permits rose 5.8% month-over-month to an annual rate of 1.442 million, surpassing the 1.380 million consensus and the unrevised prior reading of 1.363 million — though the figure came in 0.2% below the year-ago rate of 1.445 million. Single-family authorizations dipped 2.6% from the prior month’s revised 895,000 to 872,000. Housing completions climbed 4.8% from March to a seasonally adjusted annual rate of 1.449 million, while single-family completions edged down 1.0% to 903,000.

On the manufacturing front, the Philadelphia Fed Manufacturing Index unexpectedly fell to -0.4 in May from 26.7 in April, well below the consensus of 17.6. New orders plunged to -1.7 from 33.0, and shipments weakened sharply. Prices paid eased to 47.9 from 59.3, while the employment sub-index improved marginally to -2.8 from -5.1. Forward-looking indicators, however, continued to point toward expansion over the next six months.

Initial jobless claims for the week ended May 16 fell 3,000 to 209,000, below the 213,000 consensus. Continuing claims for the week ended May 9 came in at 1.782 million, under the 1.790 million estimate.