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How Lumber Lost Its Mojo as Economic Indicator
For years the price of lumber futures has been a pretty good leading indicator for a variety of economic data, especially the series related to the housing market. But recent events have caused lumber to not be a good leading indicator. It is likely just temporary, and hopefully lumber will get back to being a good messenger about what the future holds. So we should not expect the data on U.S. housing starts in this week’s chart to echo lumber’s big blowoff top. Housing starts data usually follow the dance steps of lumber prices with about a 10-month lag. This is some of the magic of what lumber prices used to be ... (full story)