That’s what Ed Leamer famous again in 2007. Residential development employment, spending, housing begins, new house gross sales, all normalized to 2021M11.
Determine 1: Residential development employment (blue), residential development spending deflated by PCE (tan), housing begins (inexperienced), new homs gross sales of single household items (crimson), all seasonally adjusted, in logs 2021M11=0. Supply: BLS, Census, Census/HUD, BEA, and creator’s calculations.
Again in September, Leamer didn’t see an imminent recession. Undecided what we’d make of the present knowledge. In reality, he argues that housing is a much less dependable predictor of recession, given the shortage of a giant buildup in housing within the face of continued robust demand, and the final energy of the monetary system, in distinction to 2007.