Don't Drink the Tea. Think With the WE.
Sep
2011
2

“Today’s construction spending data makes it even more imperative for a federal jobs policy that infuses construction dollars into the economy.”

Construction spending fell by 1.3% between June and July this year to an annual rate of $789.5 billion, according to the U.S Census Bureau news release. This is 32% less than July 2007 when the annual rate of construction was $1.2 trillion. The largest percentage fall in construction spending came from public construction, including educational, which fell by $5.9 billion in seasonally adjusted annual rate.

July also saw a significant drop (6.2%) in private manufacturing construction. On the positive side, there was a slight pickup in commercial, as well as highways and street construction.

Today’s construction spending data makes it even more imperative for a federal jobs policy that infuses construction dollars into the economy. Simulations of the Moody’s Economy.com macroeconomic model show that every $1 spent on infrastructure generate $1.59 in near term GDP. This is one of the highest rates of return on investment, from any other type of spending or tax cut. The size of the construction spending deficit that would return the nation to the pre-recession spending levels is over $350 billion annually.

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