Surging construction costs to build a new home is not sustainable and is becoming a pain in the arse for home builders and prospective home buyers. From concrete to lumber to copper pipes to paint and even appliances, costs have surged over the past year.
Today is a double whammy for bad news for the US economy.
First, The Census Bureau monthly construction spending report reveals that highway and street spending rose 11.7% in January. The biggest decline was communication spending.
BUT, US residential construction spending slumped for the 6th straight month. It is beginning to resemble “The Matterhorn” plunge of the 2000s.
The second whammy is the FDIC report revealing that US banks reported $251 billion of “unrealized losses” on securities investments in 2018, the most since 2008.
For a less grim chart from The Federal Reserve (and a different metric), here is US Commercial Bank Liabilities Net Unrealized Gains (Losses) Available for Sale.
Source: Confounded Interest
…government spending rescued the headline as public construction rose 4.9% in Jan… thanks to a massive surge in infrastructure spending on Highway and Street improvements…