Two key factors are holding back our economic recovery. No, it’s not Obama and uncertainty. It’s lack of consumer demand and the housing market.

One of the biggest if not the biggest economic drags from the overall troubled housing market can be seen in Housing Starts, or the monthly measure of new housing projects started. Look no further than this latest graphic of Housing Starts to see how bad this sector is hurting.

As you can see in the graph, every recession but this recent one has been followed by robust growth in Housing Starts. They’re pretty important to overall economic growth:

Housing starts is important because it is a leading indicator. Sustained declines in housing starts slow the economy and can push it into a recession. Likewise, increases in housing activity triggers economic growth.

The overall effect of low starts might not be that obvious at first:

“Housing market challenges continue to serve as a drag on manufacturing growth in a number of ways, both direct and indirect. First and foremost, housing starts are down from 2.1 million homes being built per year a few years ago to around 600,000 today,” said Chad Moutray, the chief economist for the National Association of Manufacturers. “That means less demand for building materials for construction, and appliances and furniture for furnishings. But it also means that we have that many fewer people employed in the construction sector_ all potential customers for manufactured goods.”

Many folks point to quick recoveries in the past and use that to lay more blame at President Obama’s feet for this sideways recovery. That is mostly off base but there is some blame to place. The President failed to significantly focus or follow through on the help for the housing market, seeking to increase economic activity in other sectors and to protect states from job losses instead.

Obama has started making the housing market trouble public again but it’s a little too late since Republicans in the House refuse to pass any meaningful solution. Now one of his only remaining tools is to remind voters that he supports reforms that would boost the housing market but opposition by Republicans make those proposals D.O.A.

The sad truth is that when Republicans call Obama a failure on the economy they’re hoping you aren’t smart enough to know role the housing market has played in slowing the recovery and how little Obama can do to stop that. They don’t want you to know either that what little Obama can do is all opposed by Republicans. That’s our modern Republican Party.

Source: http://www.watchblog.com/democrats/archives/007775.html

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