With yesterday's releases of housing permits and starts, and industrial production and capacity utilization (all of which came in negative, defying positive expectations), now is a good time to take an overall view of growth in goods and services production and consumption.
Real retail sales, a proxy for consumption, show a 70% recovery from recession trough to the last peak:
Industrial production, despite its poor reading yesterday and downward revisions of the several months previous, still shows almost a 60% recovery in manufacturing from the recession trough to the last peak:
But residential construction, as measured by housing permits (a component of the LEI) are still scraping along the bottom of the trough:
It is difficult to say the least to have a high-flying recovery with such an important component of expansion completely missing. And that doesn't even count the Austerian stupidity that is requiring even more cutbacks in government spending at both the federal and state levels. (Reminder: almost half of construction workers are unemployed, we need several $Trillions of work done to efficiency-producing infrastructure, we can borrow at the lowest interest rates in our lifetimes to fund it, and there is not the slightest interest in Versailles in doing so).
Tomorrow (hopefully) I'll update the states' fiscal pictures.
3 comments:
Though it's worth noting that those austerity measures actually having the government spending MORE this fiscal year.
Totally off topic question but I'm damn curious. On the first chart of retail/food, anybody know what that enormous spike is around the 3rd quarter of 2001? Whatever it is, it looks like it didn't really do a whole hell of a lot. I mean you see a preceeding drop suggesting anticipation of it, followed by a spike and fall off that pretty much keeps the overall growth in line with where it ended up heading anyhow.
Steve:
That's 9/11 and its aftermath. Everything stopped for the rest of September, then bounced back in October.
Don't you remember, Steve, that in response to 9/11, President Bush literally told Americans to "go shopping"? Apparently, we did.
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