Everyday Economics: Fed Caught Between Persistent Inflation, Cooling Jobs Market

by Orphe Divounguy
AOL

(The Center Square) – Next week’s calendar is packed with major economic reports and influential Fed speeches. However, expect continued mixed signals, with data spanning manufacturing, construction, and the jobs report. Here’s what to watch:

Construction Spending: A Temporary Setback or the Start of the Downturn?

Spending on construction projects surprised to the upside at the end of 2024, driven primarily by a rebound in residential construction. In December, residential construction spending reached an annualized $939.5 billion – 1.5% (±1.3%) above November’s revised $925.5 billion estimate. This aligns with the strong rebound in housing starts at the end of 2024.

However, January’s unusual winter freeze is expected to dampen spending. That said, anticipation of new tariffs may have pushed some investment forward, mitigating the expected decline – despite the drop in housing starts for January.

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