When assessing the strength of America’s leap-frog economic growth of the late 1980s, 1990s and early 2000s, it’s readily apparent that the overwhelming automotive and housing construction sectors provided the backbone.

While automotive has surprisingly rebounded with unexpected vigor, any million-plus annual new residential construction units appear to be unattainable after the “housing implosion” that occurred during the Great Recession. Conventional wisdom relegated additional future housing to long-term leasing, rental and speculative developments, rather than a personal long-term asset to be held indefinitely by the owner. This belief system traces back to the post-World War II return of the GI millions and lasted up to the mid-2008 crash.

While today’s residential construction circumstances are clouded by prospective owners’ doubts about resale, and the belief of many that homeownership has switched from asset to liability, recent indicators show a more sanguine attitude toward individual homeowning:

• New 2015 home sales exceeded the previous year by 22% at mid-year (440,000 homes sold). According to expert analysts, existing U.S. home sales will increase by 6.8% this year, with new construction up about 9%.

These observers believe 2016 new home sales will rise 23%, while new housing starts are projected to rise into the double digits. Most of such activity will benefit traditional single-family houses.

• Most significant is about one-third of new home buyers will consist of first-time purchasers. This includes older, more seasoned buyers, rather than the job-entry-level young buyers that comprised the long span of the previous housing boom.

• Although the free-and-easy push on bankers to lend mortgages to unaffordable clients is not being repeated, borrowers with less than superior credit are being treated more favorably by financial institutions. They are hoping to participate in what appears to be a solid “new housing” recovery. This is being supported by government-backed Fanny Mae and Freddie Mac, as the Obama administration is hoping to light a new fire under additional housing construction in the future.

With the slow but steady employment improvement indicating greater numbers of families staying put, there seems to be a new warming trend toward homeowning. This is being abetted by the unexpectedly high rental and long-term lease costs in a greater number of cities and middle-sized towns across the nation.

If this preliminary trend evolves into a solid residential construction recovery, the overall employment picture of both automotive and housing could be the forerunner of a stronger-than-expected 2016 overall U.S. economic expansion.

Supreme Court short circuits EPA

With the current administration committed to climate control as a prime mandate during President Barack Obama’s second term, it came as a surprise when the U.S. Supreme Court passed down a negative decision this summer. This dealt the U.S. Environmental Protection Agency a major blow on its “free-wheeling” restraints on business in general, and power plants in particular. These restraints were meant to force controls on mercury emissions and other toxic air pollutants.

The EPA had taken upon itself to put limits on electric utility production emissions and other climatic elements that could be construed as air pollutants, no matter what the cost, negatively affecting America’s business and industry.

The court, in a 5-to-4 majority opinion by Justice Antonin Scalia, demanded that the EPA must “reconsider the mercury rules, because it didn’t take into account industry costs before imposing a restraint on these emissions.

This unexpected ruling has brought to the surface the ongoing debate, raging for the past six years, regarding the EPA’s decision-making capacity no matter what the cost to industry before arbitrarily adopting such regulations. What is particularly significant in this late June decision is that President Obama had ratcheted up climate control into the top spot. This Supreme Court edict forces the EPA to justify both current and future limitations on business and industry. It encourages an accelerated attempt to fine-tune limitations on electric power generation, as the Obama term winds down 14 months from now. This was reaffirmed by the high court, making it impervious to any further reactive limitations in the foreseeable future.

The EPA has openly admitted the consequential costs of these restraints had not been considered in its decision to further tighten controls, which it considers deleterious to the global atmosphere.

Although President Obama signed an agreement with China’s Chairman XI Jinping for future cooperation in a worldwide environmental restraints program, this agreement carries no forced implementation. It was considered as a sop by China to convey commitment to global cooperation on the earth’s future environment.

While no preventive action, other than that of the United States, has been taken to implement this program worldwide, it’s problematic whether the President’s environmental care inhibitions will be given the same level of support that the EPA now enjoys.

New economic determinant?

It’s becoming ever clearer that with the greater frequency of the Federal Reserve Board’s highly-publicized decisions, the Fed has become the apex on which the broad financial community — stock markets, traders and investment decision-makers — take their cue.

This undisputable dominance as the prime instigator of ongoing economic decisions has put America’s Central Bank into this spot. This is due to its singular position of respectful independence and increasing clarity.

Gone are the days of former Federal Reserve Board Chairman Alan Greenspan and others, whose main public exposure rested on the anticipation of whether the Fed funds rate (the basis from which commercial rates emanate) would go up, down or stay the same.

The turning point came in the early fall of 2008, when the Great Recession began to evolve. This brought into play the then recently appointed Federal Reserve Board Chairman Ben Bernanke, who, together with then U.S. Treasury Secretary Hank Paulson (2006-2009) and future U.S. Treasury Secretary Tim Geithner (2009-2013), fashioned a brilliant solution to an oncoming disaster.

This expert trio, sanctioned by President George W. Bush at the time, was successful in containing what could have become a worldwide depression. This was done by shoring up the banking system and lending Treasury Department support to automotive giant General Motors and major insurance conglomerate AIG, among others.

With Fed Chairman Bernanke recognized as the key architect of this catastrophic containment, the Fed had gained new stature as the independently qualified agency to which the U.S. economy has now turned for future direction.

While previous Fed Board chairmen would limit their oversight to semi-annual presentations to the U.S. House and Senate, the broad Bernanke spectrum has been assumed by current Fed Chair Janet Yellen. Utilizing the vast informational resources available from the 12 Fed regional board presidents, together with the amplification of the economic communications media, the Federal Reserve Board has become the ultimate U.S. economic action focus.

Even more, it has become influentially active with its multiple quantitative easings, which were instrumental in shoring up the U.S. Treasury debt. This was done by buying up billions of dollars of worthless mortgage-backed derivatives, which had been clogging up the big banks’ lending arteries, while also participating actively in the Treasury’s multiple weekly auctions.

The Fed also has become instrumental in setting rating standards for the nation’s leading banks. These have provided a new standard of balanced soundness to those financial institutions, which have been qualified by the Fed’s thorough assessment.