Pondering Today's Gigantic Miss on Construction Spending
Economists at Econoday expected construction spending to rise 0.4% in October. Instead, spending fell 0.8%.
Worse yet, the Census Department revised september spending from 0.5% to -0.3%.
All told that is a gigantic economic estimate miss of a full 2.0 percentage points.
Despite glowing new home sales reports, residential construction spending peaked in February of 2018.
Government spending has kept total construction spending flat.
If this was a single report, I would suspect an outlier. But the key chart lines point to early 2018.
New Home Sales Highest in 12 Years
Six days ago I reported New Home Sales Highest in 12 Years.
Q: Does today's report make sense?
A: Actually, it does.
Median Sales Price of Houses Sold for the United States
The median home sales price peaked in the fourth quarter of 2017.
Builders are building cheaper homes because no one can afford anything else.
Mike "Mish" Shedlock