The two economic data releases out this morning were minor, but both can be counted as good news. U.S housing starts beat expectations in January, and Canadian wholesale trade activity rose in December.

U.S. housing starts beat analyst expectations with a 0.2% gain in January. Starts are at their highest level in over 16 years, and they remain above the 12-month trend. The larger and more important single-family component accounted for all of the strength as multiple starts tumbled, notes BMO Nesbitt Burns.

Building permits slipped 5.9% in the month to 1.78 million units at annual rates. “Despite the fall, permits remain high, and well above their 12-month average,” says BMO. “Again, single-family units rose, but unlike starts, not enough to offset a sizable decline in multiple unit permits.”

“Not only do we not think that U.S. housing markets are in an overall bubble, we are also coming to pay more attention to the possibility that the appetite and ability of U.S. households to maintain the momentum as drivers of economic activity has once again been underestimated much like that which has occurred at several critical junctures over the past decade,” comments RBC Financial.

“We don’t like to read too much into January U.S. housing data, but the industry’s strength continues apace. This is one sector of the economy that doesn’t need Fed easing, nor do we think the economy as a whole requires lower rates,” concludes BMO.

Meanwhile the only Canadian data out was wholesale trade activity for December. It increased by 0.3% over November, slightly beating consensus expectations for a 0.2% gain. Seven out of 10 provinces saw increased wholesale trade activity, RBC reports. As did seven out of 11 trade groups, with lumber and building materials recording the biggest increase.

“Increases in food products, the “other products” category, and household goods offset declines in the automobile, computers and software sectors. The decline in sales of computers and software – which are captured in the wholesale trade data, not retail sales – suggests that computer retailers had a relatively poor Christmas,” says RBC. “Better things, however, are expected out of the rest of the retail sector which we expect will post a pick-up in December sales released tomorrow morning.”