On the positive side, construction spending had a nice rebound in November.
Construction spending during November 2019 was estimated at a seasonally adjusted annual rate of $1,324.1 billion, 0.6 percent (±1.0 percent)* above the revised October estimate of $1,316.8 billion. The November figure is 4.1 percent (±1.5 percent) above the November 2018 estimate of $1,271.4 billion. During the first eleven months of this year, construction spending amounted to $1,201.6 billion, 0.8 percent (±1.2 percent)* below the $1,211.8 billion for the same period in 2018.But growth in overall construction is better than the declines that we were seeing at the end of 2018 or the stagnation we had in the first half of 2019 (which is why year-to-date spending was still below 2018), and the last 4 months have now had a cumulative increase of 2.5%.
Residential construction was especially strong in this report, up by more than $9.6 billion (1.8%). But interestingly, most of that residential construction increase was not in new homes.
Change in residential spending
New single family construction +$3.2 billion (+1.2% from Oct)
New multifamily construction +$0.02 billion (+0.0% from Oct)
All other residential spending +$6.5 billion (+3.4% from Oct)
TOTAL RESIDENTIAL INCREASE +$9.7 BILLION (+1.9% from Oct)
So I don’t know what this would be. Home improvement projects? Another odd aspect of the construction spending report is that non-residential private construction slid by more than $5.3 billion in November, with declines in every category outside of “amusement and recreation” (which was still down 14.1% vs November 2018).
Much of that loss in private non-residential construction was offset by an increase in non-residential public construction of $3.0 billion, including $2.1billion in highway spending (more of that small-government conservatism). I suppose these trends are to be expected in a Bubbly time of low interest rates, higher home prices and higher government spending encouraging more construction.
But for another blue-collar sector, it wasn't so good. A major national survey says that manufacturing’s recession deepened as 2019 ended.
The Institute for Supply Management said its manufacturing index slid to 47.2% last month from 48.1% in November, marking the fifth straight contraction. It’s softest reading since June 2009 — just as the U.S. was exiting the Great Recession…But wait, I thought all of the Phase One trade deal talk was going to turn everything around with “increased confidence”??!! That’s what the stock market was trying to tell us, but we sure aren’t seeing it on Main Street so far.
Economists surveyed by MarketWatch had forecast the index to total 48.8%.
What happened: The ISM’s index of production sank 5.9 points to 43.2%, hitting the lowest level in almost 11 years. Boeing and GM played a big role in the decline, but the most other industries reported contraction, too.
The index for new orders fell slightly to 46.8% while a gauge of employment slid 1.5 points to just 45.1%.
Only three of the 18 industries tracked by the ISM said their businesses expanded in December. That’s matches the fewest since 2009.
If you dig into the actual ISM report, the weakness is widespread, with notable drops in production, employment, and rising prices all being particularly concerning.
Reports like these two make me wonder what changes first in 2020. Does our current easy-money Bubble pop and the construction spending increases go into reverse, or does the manufacturing recession end and our economic growth becomes more complete? That answer will do a lot toward answering whether the blue-collar part of the economy will be improved or in further decline ahead of the 2020 elections.
Seen at a statewide level, 15.99% of the 2018 Wisconsin workforce is employed in manufacturing. But in Wisconsin’s “prosperity zones” that percentage is smaller, only 13% for residents in Milwaukee’s Historic Third Ward. This formerly depressed and decaying section of the city has become a turnaround triumph and an economic success story that makes Milwaukee-hating Republicans seethe.
ReplyDeleteDane County is another prosperity zone. The most recent data I found was for 2010, in which manufacturing employed 7.7% of the Dane County workforce. In the City of Madison proper the percentage is even smaller.
With manufacturing employing such a small percentage of the state workforce, and with that percentage trending downward for more than three decades, why did Walker and the GOP-dominated legislature strive so single-mindedly to lure manufacturing concerns to Wisconsin, and waste so much taxpayer money doing so, only to see their attempts collapse, repeatedly and spectacularly?!?!
It’s a great question to ask every Republican who masquerades as a “state legislator.”
These tools will have no coherent, rational explanation. It was, in fact, a notably stupid idea, an ideological conceit so baseless, so backward, so “WMAC-and-Americans-for-Prosperity-musta-pulled-this-one-outta-their-collective-ass,” that had the media been responsible enough to point out how stupid an idea it was, and demanded evidence from Republicans that such ass-backwards ideas were sustainable, we’d have a Democratic majority in both houses of the state legislature, and witness actual economic recovery, spurred by redistribution of taxpayer monies to sustainable economic growth practices.
Every crackpot Republican giveaway of taxpayer money to charlatans masquerading as “instant job creators” would vanish. Every senseless tax break for one-percenters and corporations would be repealed. “Deals” like FoxCon would die in the mind of every trickle-down-spouting Republican moron, though the fetid decay might still leak from their mouths.
There was never any sound basis or sane rationale for trying to bring Gogebic Taconite to the northern counties, or FoxCon to the Racine area, or Kestrel Aviation to Superior. These pipe dreams were not vetted to expose how slipshod they were, how fraught with loopholes that let these “entrepreneurs” and “businessmen” collect and keep taxpayer money they had no right to receive.
Republican legislators were ignorant of the economics, ignorant of the role of government in the economy, and ignorant about their responsibilities.
Are you getting the impression that Republicans are ignorant?