Hey, Republicans: The Economy Is Growing
We know that lots of you have been skeptical about our thesis that the economy is accelerating. Yet here it is.
The official figures for construction spending rose 0.3 percent in March, far exceeding the expected 0.1 percent again. The prior month was revised down from a 0.1 percent decline to a 0.3 percent fall. Compared with a year ago, construction spending is up 3.8 percent.
Our point has been that the housing market is already in recovery, a big problem for a central bank trying to cool off inflation.
But you don’t have to take our word for it. Our friends at the Wall Street Journal have noticed:
The building boom has helped push unemployment to around its lowest level in more than 50 years. That is perplexing investors who want to see the Federal Reserve switch course on interest rates.
Construction spending and employment have risen to new records this year, boosted by government outlays for infrastructure, a domestic manufacturing renaissance and a wave of apartment building that got off to a slow start during the pandemic when prices for building materials, such as lumber, were sky high.
Construction companies with jobs ranging from airport overhauls to bathroom renovations say they have enough work booked to maintain payrolls—for years in some cases. Even home builders, who slowed down last year when rates began to rise, are ramping up into spring.
In summary: the economy is not losing steam at the rate many economists expected. To the contrary: we appear to be accelerating.