Relevant and even prescient commentary on news, politics and the economy.

First look at the 2021 economy: housing

by New Deal democrat

First look at the 2021 economy: housing

 

As I’ve pointed out for years, housing is a long leading indicator. It can give us a decent read on the direction of the overall economy 12 to 18 months out.

So the strength in the housing market in the past 6 months has been a powerful positive omen for the economy going into 2021.

Yesterday residential construction spending for October was reported and continued that string of very positive signs. The below graph compares inflation-adjusted residential construction spending with single-family housing permits since the construction series began in 2002:

These are the two least volatile of all of the housing metrics. Since sales have to be made first and permits obtained, before construction starts, typically construction – while the least volatile of all metrics – lags permits somewhat. But right now, both are at 10 year+ highs.

I put together a much more comprehensive overview of the housing market, including mortgage rates, sales, prices, and inventory, and it is posted at Seeking Alpha.

As usual, clicking over and reading puts a penny or two in my pocket to reward me for my efforts, as well as giving you useful economic information about the future.

Weekly Indicators for November 23 – 27 at Seeking Alpha

 by New Deal democrat

Weekly Indicators for November 23 – 27 at Seeking Alpha

A little later than usual, my Weekly Indicators post is up at Seeking Alpha.

While there has been no big deterioration, there are further slight signs that the out of control pandemic is taking a toll on the recovery that has been underway for the past 6 months.

As usual, clicking over and reading will bring you up to the virtual moment on the economy, and reward me a little bit for my efforts.

New Fault Lines in a Post-Globalized World

(Dan here,,,I think worth looking at in American Affairs)

New Fault Lines in a Post-Globalized World

By Marshall Auerback and Jan Ritch-Frel

November 20, 2020The economic damage of the coronavirus pandemic has upended the global economic system and, just as importantly, cast out the neoliberal orthodoxy that dominated the industrialized world for the past forty years. But Covid-19 has only accelerated a process that was already well underway, impacting trade negotiations between China, the United States, and the European Union and spreading throughout the world’s largest economies. Although many defenders of the old order lament this trend, it is as significant a shift as the dawn of the era of global trade that began with the birth of the World Trade Organization (WTO).

Economists, politicians, and pundits are often tempted to see new economic patterns through the lens of the past. Thus, we are likely to hear that we are returning to nineteenth-century mercantilism or that we will see a revival of 1970s-style stagflation. But this historical view misunderstands our present moment; the motives now are different, and so are the outcomes.

Instead, what we are experiencing is the realization by governments of developed countries that new technologies enable them to expand or initiate new and profitable production capacity closer to or within their own markets. The savings in transportation, packaging, and security costs that come with domestic production, along with benefits to regional neighbors and to domestic workforces, will increasingly enable developed nations to compete with the price of goods produced through the current internationalized trade system. American politicians from Donald Trump to Elizabeth Warren are increasingly joined by a chorus of European and Asian politicians who see the long-term political benefit of supporting this transition.

Weekly Indicators for November 16 – 20 at Seeking Alpha

 – by New Deal democrat

Weekly Indicators for November 16 – 20 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

Nothing definitive yet – after all weekly data is going to be noisy – but there is some indication that the recovery in coincident conditions in the economy have ceased to make progress, and maybe even have begun to reverse, probably due to the pandemic being out of control, and new restrictions put in place in some States as a result.

As usual, clicking over and reading should bring you right up to the moment, and reward me with a penny or two for the effort I put in to bring you this report.