Construction Economic News

A month ago, the Employment Situation report from the Bureau of Labor Statistics reported a U.S. total jobs-count increase during September of +263,000. Now, for the month of October, a nearly identical change in total employment has been estimated by the BLS, +261,000 jobs. (By the way, September’s figure has just been revised to +315,000.)

After a gloomy patch in late summer and early fall, dominated by discussion of inflation and recession, the economic and construction news is beginning to lighten a bit. The first ray of sunshine has come in the 2022 third quarter advance estimate GDP report. Rather than retreating or standing still, Q3 real gross domestic product advanced by +2.6% seasonally adjusted and annualized, improving nicely on the -0.6% and -1.6% performances of Q2 and Q1, respectively.

Megaprojects Reignited Starts in September ConstructConnect announced today that September 2022’s volume of construction starts, excluding residential work, was $51.1 billion, an increase of +26.0 compared with August’s figure of $40.6 billion (originally reported as $40.0 billion).

The accompanying table records the top 10 project starts in the United States for August 2022.

Clichés are often true and it is the case that a picture can be worth a thousand words.

September’s Employment Situation report from the Bureau of Labor Statistics says that the total number of jobs in the U.S. economy rose by +263,000 last month. The gain in employment of a quarter of a million jobs was the weakest showing among all the months of this year so far, but it was still a pretty decent number. It’s not the sort of figure one would expect if the economy were becoming mired in a recession. That may still happen, but it isn’t necessarily here yet.

A strange thing is happening with the U.S. foreign trade balance. It’s improving significantly. It’s no longer as steeply in the hole as it was. And why this is so unusual is because it’s occurring while the value of the U.S. dollar is rising, making imports cheaper and more attractive and rendering exports more expensive and, therefore, a harder sell.

There are aspects to the current inflation problem that deserve an airing. First, while the U.S. all-items CPI-U increase, often referred to as the headline rate, is +8.3% y/y and the core rate, which leaves out price-volatile food and energy items, is +6.3% y/y, there is another measure that isn’t nearly as extreme.

In the United States, the Federal Reserve has just raised its key policy-setting interest rate, the federal funds rate, into a range from 3.00% to 3.25%. The intent is to cool inflation, which is +8.3% year over year for the Consumer Price Index (i.e., CPI-U, with U standing for urban consumers). The U.S. core inflation rate is +6.3%. Core leaves out price-volatile energy and food items.

There will be a lot riding on the hoped-for success of the U.S. manufacturing sector over the decade-plus ahead if the goals concerning carbon emission reductions by mid-century are to be met. There will need to be tremendously large investments in electric vehicle production line expansions, new EV battery plants, computer chipmaking operations, and in the fabrication of all the building products that will go into renewable electricity generation, utility-sized power storage units, coast-to-coast recharging stations, new hydrogen extraction facilities, and so on.