Atif Mian and Amir Sufi pondered why spending hasn't caught up to trend.
How would spending catch up to trend when employment hasn't caught up to trend?
And why would we expect employment to catch up when home construction lurks below the 1982 recession levels let alone below trend?
And even if employment were caught up, we're not going to have as much retail sales of home furnishings and such household goods until we have as many new homes to furnish.
Notice how in the early 1980s, home construction started up before employment. Just like how in 2006 home construction started slowing before employment ... and then started plummeting before employment.
Retail sales include paint, furnishings, and lots of other household goods. So really, is it any surprise that retail sales haven't recovered to trend but rather have only stopped dropping?
By and large, the home is where the retail sales live.
And why would a home builder ramp up construction when employment is low? Why is it again that we haven't restored the CCC and WPA this time around to get people working?