"We find that the red-hot housing sector alone, which typically represents just 5% of the total economy, accounted for an astounding 50% of the overall growth in the U.S. economy by the first half of this year, and more than half of the private payroll jobs created since fall 2001 were in housing-related sectors,"
"We argue this represents an unhealthy and disproportionate share of economic growth. The overreliance on residential investment leaves the economy very vulnerable if housing demand and prices cool -- prices do not need to even fall; just a slowing in the pace of home price appreciation would have a noticeable negative impact on economic growth -- not unlike the fallout following the frenzied tech overinvestment in the late 1990s."
Monday, August 29, 2005
Merrill Lynch economists Kathleen Bostjancic and David Rosenberg said in a economic commentary:
Posted by David at 1:00 PM