February development spending: nominal vs. actual makes all of the distinction
– by New Deal democrat
Because the flip of the Millennium, a downturn in manufacturing has not been sufficient to tip the economic system into recession. There should even be a decline in development as properly.
This morning’s development spending report for February painted a considerably totally different image relying on whether or not the information was checked out nominally or in actual inflation adjusted phrases.
Nominally whole development spending (blue within the graph under) rose 0.7% within the month to one more new all-time document; whereas residential spending (pink, proper scale) rose a pointy 1.3%, near a 12 month excessive:
However once we deflate by the price of development supplies, the image isn’t so rosy:
So adjusted, whole spending really declined -0.1%, and residential spending rose 0.4%.
The image for the main residential sector is that spending has been trending sideways (very like permits, begins, and gross sales) for the previous 12 months, whereas whole development is slowing. In actual fact in actual phrases it has not superior in 4 months.
Lastly, the increase in manufacturing development has additionally ended:
The general image for the whole items producing sector of the US economic system from this morning’s ISM and development spending experiences is that each manufacturing and development are nearly proper on the juncture between growth and contraction.
“ISM manufacturing index and construction spending report of a goods producing sector that is no longer expanding,” Indignant Bear by New Deal democrat
