Today, the Bureau of Economic Analysis (BEA) released their third and final installment of the Q1 2007 GDP report showing truly anemic growth of 0.7% weighed down by, amongst other things, continued weakening to fixed residential investment.
As with last months preliminary report, major praise has to go to Professor Nouriel Roubini for his accurate forecasting having called this deceleration to GDP well in advance, virtually nailing the actual figure as well.
Residential fixed investment, that is, all investment made to construct or improve new and existing residential structures including multi–family units, continued its historic fall-off registering a decline of 15.8% since last quarter while shaving .89% from overall GDP.
Housing continues to be, by far, the most substantial drag on GDP subtracting an amount far surpassing the contributions made by ALL non-durable goods including food, clothing, gasoline, fuel oil.
The following chart shows real residential and non-residential fixed investment versus overall GDP since Q1 2003 (click for larger version).