Improvement in Business Construction Activity

Today, the Commerce Department reported a 0.6% fall in November's construction spending. This was better then the 1.3% drop that analysts had expected. A surprising 0.7% rise in non-residential building activity partially offset a 4.2% loss in housing construction. If business are increasingly building to expand, then the economy must not be as bad as is generally thought.

The real-estate stock market sector has gone up 28% faster than the S&P 500 since turning things around in early December. Stock market sectors frequently change direction before the effects are seen in the economy. For example, the banking sector of the market had gone up compared to the S&P 500 during January 2008 but then started a bearish trend that lasted until the middle of July. This bearish trend starting in late January happened one and one-half months before the March 17th news of the financial crisis that was launched with Bear Stearns.