Wednesday, November 29, 2006

(not so) Well put 

If you're thinking that revision to GDP today is a sign that the economy is stronger than we thought, I'd say think about what it means to have real final sales flat at 2.1% growth versus last quarter. As I said last month, that's the number I pay attention to most, and a goodly part of the upward revision was just firms being shown to increase inventories rather than decrease them. Most of the rest of the increase was a revision downward in the number for imports -- the international data are often sources of these revisions. Altogether, a blah report.

The Beige Book report from the Fed for the 9th District (Minneapolis) reported a tight labor market. The housing sector is as bad elsewhere in the state as we've said about St. Cloud and indeed the rest of the nation.
Commercial construction was up. Recent commercial construction activity was robust in the Bismarck, N.D., area, according to a representative of a commercial real estate firm there. The value of October commercial building permits in Sioux Falls, S.D., was about even with last year's record levels, and office construction was up slightly. A Minneapolis developer hired a design firm to begin plans for a large new office tower in its central business district. Plans were announced for the redevelopment of a historic skyscraper into a luxury hotel in downtown Minneapolis. However, residential construction continued to slow. October residential construction permits for Rochester, Minn., were down 42 percent in value from a year earlier.