Summary

  • The U.S. economy has been increasingly stable since the beginning of the 1980s. The variability coefficient of quarterly economic growth since 1984 is just 46% of what it was during period between 1960 and 1983.

  • The residential construction sector’s importance to the overall economy should not be overlooked.

  • Many consumers feel that now is no longer a good time to buy a home. As a result, adjustments within the sector appear to be far from over yet.

Weekly indicators

United States – Personal income rose 0.5% in September. The core PCE deflator, the Fed’s favorite inflation gauge, rose by 0.2% for the month and by a 2.3% annualized rate for the quarter. The employment cost index was up 1% in Q3. Consumer confidence came in at 105.4 in October, marginally below the September reading of 105.9. The ISM report for the manufacturing sector reached a 40- month low of 51.2. Both new and unfilled orders were down in October. Construction spending dropped 0.3% in September, but remained 2.9% above its level of one year ago. Non-farm productivity was unchanged in the third quarter. Light vehicle sales were down to 16.2 million units in October, compared to 16.6 million in September. Factory orders up 2.1% in September, but extransportation they fell 2.4%. Total non-farm payroll employment increased by 92K in October, following a revised 148K gain in September. The unemployment rate was 4.4% in October, compared to 4.6% a month ago

Canada – Canadian GDP increased by 0.3% in August. Wholesale (+1.7%) and retail trade (+1.1%) were among the main drivers. The average weekly earnings of payroll employees, for the first eight months of 2006, rose 3.3% compared to the same period last year. Prices charged by manufacturers, as measured by the Industrial Product Price Index were down 1.6% in September, following a 0.5% drop in August. The Raw Materials Price Index was down 5.2% in September, following a 3.7% decline the previous month. In October, 51K jobs were created. Full-time jobs were up 68K while parttime employment declined by 17K. The unemployment rate edged down to 6.2% in October from 6.4% in September.