Wow, what a miss on February housing starts. At just 897,000, the read was 14 percent below expectations of 1.04 million units on a seasonally adjusted annual basis. That is an enormous miss, and because this is the housing data that is directly plugged into GDP, it is cause to sit up and take notice.
The only good news is that there is clear evidence that poor weather was the major factor.
Read More Housing starts drop in Feb, setback likely temporary
While all regions saw a decline, the areas hit the most by weather (Northeast, Midwest) declined much more.
February new home starts vs. January 2015 (source: Census Bureau)
- Northeast: down 56%
- Midwest: down 37%
- West: down 18.2%
- South: down 2.5%
Permits, which do not require any construction, were up three percent, to 1.09 million, the second highest level since the end of the recession. I would be more comfortable saying this suggests a spring rebound, except the gain was driven entirely by multifamily permits, which were up 19 percent. Single-family permits were down 6 percent month-over-month.
Read More Investors slash US exposure on rate hike fears
Regardless, we now have a long string of disappointing releases for February: industrial production, capacity utilization, NAHB Housing Market Index, retail sales, regional Fed surveys. Only ISM Services and nonfarm payrolls (arguably the most important report) have been above expectations.
All of this suggests that while the FOMC may indeed remove the "patient" phrase from its forward guidance on interest rates, the members will still act with patience.
Read MoreSee CNBC's economy coverage here