Dean Baker joins with others (e.g., here), adding his two-cents worth once again on impending, housing market crash recessionary gloom. From his blog and a linked paper, we find the plot continuing to thicken…
Housing Crash Recession Coming [12/04/06]: …The Commerce Department reported that non-residential construction fell by 0.7 percent in October following a downwardly revised fall of 0.6 percent in September.
This should put to an end silly claims that growth in the non-residential sector would offset plummeting residential construction. The residential sector is twice as large as the non-residential sector, which by itself made such an offset unlikely. Furthermore, there was no basis for any sustained boom in the non-residential sector. There is still plenty of vacant office space, retail stores are cutting back, the manufacturing sector is stagnant or declining -- what would support a boom?
Friday's data also included a release from the Institute of Supply Management that showed the manufacturing sector declining in November and weaker than expectd car sales. In addition, on Thursday we had a sharp jump in weekly unemployment claims (erratic data, but serious cause for concern). Throw in earlier releases showing declining orders for durables goods in both September and October and the continued decline in house sales and prices and you have what could be the beginning of a recession. …
Recession Looms for the U.S. Economy in 2007 [PDF]
November 2007, Dean Baker
[In depth, on: Housing, Consumption, Investment, Exports and Imports, Government Spending, Job Growth, Inflation, Interest Rates and the Dollar, After 2007... ]