Part 3/9:
Previously, we explored the manufacturing sector, identifying durable goods and motor vehicle manufacturing as key drivers. Now, we shift focus to residential construction, which along with manufacturing, constitutes the cyclical economy segment. The phrase "housing is the business cycle" captures the essence of how vital residential construction is, although it requires more nuance to fully grasp the implications.
Housing tends to be categorized as a leading indicator in the economy; however, not all housing metrics can be lumped together within this category. Critical leading indicators include building permits and the volume of new and existing home sales, which can shift rapidly in response to monetary policy changes.