Article source: ConstructConnect

Since climbing interest rates are a primary concern governing the outlook for construction activity and since the reason interest rates are being adjusted upwards by the Federal Reserve and the Bank of Canada is to slow the economy and dampen demand for many consumer goods, the topic of runaway inflation has taken on huge significance.

The rapid price inflation currently being experienced in the U.S. and Canada has roots in supply chain bottlenecks; worker shortages and exaggerated wage hikes; and the deleterious impact of the war in Ukraine on energy markets.

But there’s another cause and, like most things economic, it has a self-correcting aspect that will soon be kicking in and serving to modify the official reported year-over-year advances in the Consumer Price Index (CPI), which currently stand at +8.6% in the U.S. and +7.7% in Canada.

That self-correcting feature relates to the mathematics of the year-over-year CPI calculation and the ‘low base effect’. For many items in the CPI, the outsized percentage gains in price this year are at least partly due to the early recovery levels they’re being compared with from last year.

(more…)

Article source: ConstructConnect

The angst over whether all the talk about a possible looming recession may be affecting the U.S. jobs market can be set aside, at least temporarily, based on the latest Employment Situation report from the Bureau of Labor Statistics (BLS). May’s month-to-month change in the U.S. total jobs count was +390,000. That’s a little down from the year-to-date monthly average for 2022 of +490,000, but it’s still strikingly good.

The seasonally adjusted (SA) unemployment rate stayed at 3.6% for the third month in a row. The not seasonally adjusted (NSA) unemployment rate ticked up to 3.4% from 3.3% in April. But U rates in the mid-3.0% range are about as low as they ever go.

The construction sector achieved decent hiring success in May, with a gain in employment of +36,000 jobs. That was the second best monthly showing this year, behind only February’s +54,000.

(more…)

Article source: ConstructConnect

The graphic featured below maps ConstructConnect’s type-of-structure categories for ‘starts’ to the Census Bureau’s put-in-place designations, while also showing year-to-date results for both series through April 2022.

As the text box says, ‘starts’ lead put-in-place numbers. Therefore, it’s possible to draw inferences concerning the likely future direction to be taken by many of the put-in-place sub-categories from the starts results.

(more…)