Key sectors of the economy that spent years squeezed by high interest rates are gaining momentum.
Why it matters: For years, manufacturing and construction were among the clearest signs that the Federal Reserve's tightening campaign — reversed only somewhat at the end of last year — was weighing on the economy.
Now, manufacturing and construction are early sources of job growth, helped by an AI investment boom that has so far been unconstrained by still-high borrowing costs.
What they're saying: "The private labor market has rebounded in 2026 due to a resurgence of the highly cyclical manufacturing sector ... while a robust buildout of data centers has propelled construction employment," Troy Ludtka, senior economist at SMBC, wrote in a note Monday.
Ludtka wrote that the AI infrastructure buildout should continue to underpin construction employment, while recent business surveys suggest manufacturing employment growth could keep revving up.
#construction #wrote
Why it matters: For years, manufacturing and construction were among the clearest signs that the Federal Reserve's tightening campaign — reversed only somewhat at the end of last year — was weighing on the economy.
Now, manufacturing and construction are early sources of job growth, helped by an AI investment boom that has so far been unconstrained by still-high borrowing costs.
What they're saying: "The private labor market has rebounded in 2026 due to a resurgence of the highly cyclical manufacturing sector ... while a robust buildout of data centers has propelled construction employment," Troy Ludtka, senior economist at SMBC, wrote in a note Monday.
Ludtka wrote that the AI infrastructure buildout should continue to underpin construction employment, while recent business surveys suggest manufacturing employment growth could keep revving up.
#construction #wrote
3 months ago
