Article source: ConstructConnect

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.

The Federal Reserve has often indicated that when it comes to assessing inflation, the measure it turns to initially is the Personal Consumption Expenditures index (PCE), less food and energy. This yardstick is currently (July) +4.6% y/y, which is significantly high, but it’s not nearly as runaway as the +8.3% y/y for CPI-U. Also, it’s only a percentage point higher than it was a year ago in July 2021 (+3.6% y/y). (By the way, the U in CPI-U stands for urban consumers.)

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Article source: ConstructConnect

In the U.S., 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.

A higher interest rate regime is meant to stamp out excessive consumer spending. But it’s also known, through corresponding bumps in mortgage rates, for almost always having a detrimental effect on residential real estate demand and new home construction.

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Article source: ConstructConnect
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 EV production line expansions, new EV battery plants, computer chip-making 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.
Already, in 2022, there has been an unprecedentedly large number of mega-sized industrial projects that have been given go-aheads. One wonders to what extent the Federal Reserve’s current program of aggressive interest rate hikes will slow this work down. For a variety of reasons, as set out in the five following bullet points, perhaps not as much as one might suppose.
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Article source: ConstructConnect 

Statistics Canada’s August Labour Force Survey report was a ‘downer’. It set out a third straight month of total jobs count decline. In August, the employment step back was -40,000 jobs. In the two preceding months of July and June, the retreats were -30,000 and -43,000 respectively.

The current year’s monthly average of total jobs-count change through August has been only +19,000. Last year, for the first eight months, the comparable figure was considerably better at +57,000.

Canada’s seasonally adjusted (SA) unemployment rate has risen to 5.4% from 4.9% in July. In August a year ago, it had been 7.1%.

The not seasonally adjusted (NSA) unemployment rate now sits at 6.0%. But the NSA U rate calculated according to the same strict rules about who is truly out of work as are adopted in the U.S., remained tight. At 4.2%, it wasn’t far off America’s figure of 3.8%.

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Article source: ConstructConnect

It’s always helpful to know which U.S. cities have the hottest economies and one way to make that assessment is to look at their labor markets.

Table 1 ranks the 51 largest U.S. urban centers in two ways: (1) by year over year jobs creation, from fastest to slowest; and (2) by current unemployment rates. (For ease of presentation on social media, Table 1 is a condensed version of Table 3, which shows the results for the full set of 51 cities.)

Dallas-Ft Worth (+7.2%) is number one for y/y jobs growth, with Las Vegas (+6.3%) second, Houston (+6.1%) third, and Austin fourth (+6.0%). It’s astonishing that three cities in Texas are in the Top 4. San Antonio is well down the chart.

The ranking for unemployment rates is headed by Minneapolis-St Paul (2.0%), with Salt Lake City (2.1%), and San Jose (2.2%) close behind. But here’s a remarkable achievement. All four of Florida’s major cities are in the Top 10: Miami, Tampa, Jacksonville, and Orlando.

Also notice that two renowned West Coast high-tech centers have exceptionally low unemployment rates: San Jose (2.2%), and San Francisco (2.5%).

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Article source: ConstructConnect

The other day, I wrote about U.S. city labor markets. Today’s article presents the same subject matter and graphics for Canada.

Table 1 ranks 33 Census Metropolitan Areas (CMAs) in Canada according to two criteria: (1) year-over-year change in number of total jobs, fastest to slowest; and (2) unemployment rates, lowest to highest.

The Top 5 cities with both good jobs growth and low unemployment rates are shaded green. The next best tier of 5 CMAs appears with purple shading.

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