What Are Plunging Lumber Prices Saying About U.S. Economy?

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What Are Plunging Lumber Prices Saying About U.S. Economy?

Lumber’s Performance

Home and lumber prices often send important messages as to how the economy is doing. The chart above looks at lumber prices over the past 11 years.

So far this year, lumber and the Dow Jones Home Construction index is diverging against the broad market. This chart highlights that lumber is now down over 40% from its peak earlier this year.

Below compares the performance of the S&P 500 to the DJ Home Construction index this year.

What Are Plunging Lumber Prices Saying About U.S. Economy?

Dow Jones Home Construction Index

Investors might want to keep a close eye on lumber and home construction going forward, because weakness in the sector may be sending an important message about the macro picture going forward.

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