Monday, November 3, 2014

Private Office Construction Spending: The Pot of Gold!

Many seem to be dwelling on the awful construction spending report today. Not me! I'm going to cherry pick the part of the report that was looking good. It's a day for unbridled optimism!

The following chart shows total private office construction adjusted for inflation.

Click to enlarge.

Note the excellent exponential growth trend since the bottom! We're right on track! Again!

What bothers you about the chart? Sustainability? Seriously? Look, just because the current growth trend  is very similar to the previous two failed growth trends (as is seen in the similarity of growth rates), it doesn't necessarily mean the current exponential trend has to end in failure too!

Please allow me to alleviate your fears. If the Fed thought a 12%+ growth rate in real office construction wasn't sustainable and could lead to office construction bubbles, do you really think they'd allow it to continue not once, not twice, but a third time? I think not.

Are you still skeptical? Good grief, what's it going to take! Perhaps I just need to offer more supporting evidence to back my optimism. The following chart shows the one year moving average of the employment level of sales and office occupations. I have added a parabolic trend channel for your convenience.

Click to enlarge.

33.4 million is a whole lotta jobs! People always need a place to work! That's why office construction is doing so well! Why can't you see this? Because we're well below the peak? Because the long-term trend is looking like a complete disaster in the making? What is it with you and your ridiculous questions! Stop that! It's a day for unbridled optimism! Get with the program!

Now you are complaining about the parabolic trend channel failure too? Why! I understand that you can see what happened during the Great Recession, but that's well behind us. We've actually clawed our way back to the long-term trend! There's definitely going to be a pot of gold at the end of this rainbow! I can feel it! You should too!

What? Too much sarcasm? Well, it's not too late to vote!

November 3, 2014
Poll: Is There a Sarcasm Bubble?

You will find the poll in the upper left hand corner of my blog.

I probably shouldn't try to influence your decision with my opinions, but there's a bull market in sarcasm and I'm holding to maturity! Woohoo! Just look at the use of exclamation points in this post! The future's so bright I gotta ride the sarcasm wave, baby! That's right! Ride it!

Source Data:
St. Louis Fed: Custom Chart

No comments: