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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (29076)	2/3/2008 8:21:20 PM
From: TobagoJack	Read Replies (1) \| Respond to of 218083

if so, oil sands and gold will do well we are hedged

To: carranza2 who wrote (29076)	2/4/2008 4:07:53 AM
From: elmatador	Respond to of 218083

A plunge in construction spending threatens to drive the U.S. economy into recession. Strong construction spending was all that kept the U.S. economy out of recession in late 2007. Construction's pivotal role in U.S. economy By Floyd Norris Published: February 2, 2008 A plunge in construction spending threatens to drive the U.S. economy into recession. Strong construction spending was all that kept the U.S. economy out of recession in late 2007. Both statements are accurate. Falling residential construction was a major factor in slowing the economy to a tiny 0.6 percent gain, at an annual rate, in the fourth quarter of last year, according to estimates released by the U.S. Commerce Department this week. With home prices falling, and new home sales running at a rate of less than half that of two years ago, that sector's share of total economic activity has fallen to a 12-year low. But rapid increases in other construction spending made up for a large part of the decline. Nonresidential construction spending rose at an annual rate of almost 16 percent in the quarter, and local government investment spending - principally on such things as roads and schools - climbed at an annual rate of almost 10 percent. The contrasting pictures have moved to extremes. While the share of the economy going to residential construction has fallen, the share going to nonresidential construction is at its highest level since 1988, and the share going to state and local government investment is at the highest level since 1976, when Gerald Ford was president. In the next year, it is unlikely that residential investment will continue falling at the rate it fell in 2007. But it is likely that the other areas of construction will gradually come under pressure, some economists say. The credit crunch is making it harder for developers of some projects to get financing, among them a proposed development in New York City that would house what is now the New Jersey Nets team in the National Basketball Association. As can be seen from the charts contained in the multimedia section, left, spending by state and local governments has been highly volatile, growing rapidly one year and shrinking the next. That could be about to happen again. Falling real estate values threaten to reduce property tax revenue for many local governments, a fact that could reduce the number of new infrastructure and building contracts put up for bid. Pressure to hold down spending may be intense, in part because the new figures on the gross domestic product make clear that U.S. consumers are under pressure. They spent a lot more money on food and gasoline in late 2007, because of rising prices, and then spent less money on clothing and shoes. It was the first time since 1991 that there was such a decline in the final three months of a year. "There was less spent at Kmart and Wal-Mart because there was more spent at Ralphs and Mobil," said Robert Barbera, chief economist of ITG. One risk to economic growth now is that there will also be less money spent on construction projects by companies and local governments.