With the drastic downturn in oil prices reaching a sub-$40 price per barrel level for West Texas Intermediate, a 60% drop from $100 in mid-2014, the travail of copper is even worse.

Having peaked at near $3 per lb. as late as May 2015, copper had plunged to near $2 as the fourth quarter end approached. In both oil and copper, the China purchasing power deflation played a major part in their price demise, but for different economic sector reasons.

What oil and copper have in common is both had become heavily dependent on the seemingly insatiable demand by a Chinese economic superpower that seemed to be forever expanding.

But, as everyone has unfortunately learned, the Chinese economic dragon has come down to earth, and is now in the throes of reorganization of its exports, imports and production. Since copper is still the predominant element in all aspects of construction, its main impact on American manufacturers, distributors and contractors is in the arena of usage for the finished product.

Although this may reduce the value of inventory that construction’s distribution channel may have to reevaluate, the real hit being taken is by major corporations that are in the exploration, excavation, production and sales of this raw material.

Shares of Glencore, one of the world’s largest copper producers, has been particularly hard hit, as has Freeport McMoran, which has already shut mines and reduced capital spending in recent months, while greatly reducing its employment personnel.

Global copper output was expected to reach a record 22.89 million tons per annum, with global demand considerably less, according to financial experts. But faced with a product faucet that can’t be shut off fast enough, at least an additional million tons were in the “pipelines” in 2015, which will likely cause additional downward pressure on prices.

With no hope of equating the Chinese reduced purchasing debacle, copper, like oil, will have an increasingly negative impact on major producers’ prices, while distributors, installers and users will reap the benefits of such discount levels.

Will housing continue its surge?

One of the big surprises in an otherwise lackluster 2015 U.S. economy was the comeback of housing construction/sales in general, and single-family housing starts in particular. This momentum looks to continue, at least during the early months of 2016 in a still flaccid U.S. economic growth.

When residential housing construction is added to the booming overall automotive sales for the last two years, the residential U.S. economic sector, comprising 68% of the U.S. gross domestic product, seems to solidify the underpinning of America’s 2016 economic stability.

Preliminary results of single-family and multifamily starts combined have indicated a total of more than 1.1 million home starts annually, the first million-plus number since 2007, the year prior to the Great Recession. Most significant in this number is the rebounding commitment by the millennial generation to single-family homes, despite an iffy, although improving overall employment market.

This trend is being supported by more than 500,000 new home sales and 5.3 million existing home sales activity. Although the average 30-year mortgage rate is expected to jump from 4% to 4.4% by the end of 2016, such an increase will not be enough to deter purchases, even as prices are expected to increase. While housing prices were up almost 5% during 2015, a similar increase is expected in 2016, as the Federal Reserve Board increased its federal funds rates by a quarter of a percent for the year. Facilitating this increasing housing activity are Fannie Mae and Freddie Mac, pseudo-government financial institutions.

These are supporting downpayments as low as 3% of assessed home valuation, in addition to a liberal assessment of the loan applicant’s overall income potential.

With commodity prices, especially those of oil and copper, not expected to improve much throughout the year, and wages projected to increase more assertively, the available monetary liquidity in the American public’s pockets will tend to support the projected 2016 upward tilt.

With public sentiment showing signs of increasing improvement by both the respected University of Michigan reports, as well as the Federal Consumer Board index, it’s expected that the overall housing forecast can be relied upon to show continued improvement over 2015’s leap forward.

Consumer retail spending down

It’s been a matter of historical fact that America has consistently dominated the world in the amount and percentage of consumption (the consumer sector) comprising its unprecedented $18 trillion annual gross domestic product.

But in a continuing soft global economic marketplace, which has seen commodity prices plummet to rock bottom, even the United States’ enviable consumption sector is showing signs of weakness. The conventional wisdom had previously indicated that the savings of energy products at the residential, as well as the commercial/industrial level, would loosen the purse strings.

These had visibly tightened after the financial scare of the 2008-10 financial crisis and its aftermath. The personal savings rate had jumped to high single digits, after years of greater personal debt accumulation during the halcyon days extending 20 years upward from 1985.

But as has been proven during the post-holiday periods of recent Thanksgiving, Christmas and New Year, this did not materialize. Despite the Federal Reserve Board’s seven-year reprieve in raising federal funds interest rates from a 0.25% bottom, this activated corporate stock buybacks, mergers and acquisitions, and pent-up activity in automotive and construction.

It did not, however, instigate a new surge of spending much more on nonindispensable outlays, a favorite American pastime during the second half of the 20th century.

This has shown up in the recent poor financial performance of department stores such as Macy’s and Nordstrom’s, with post-holiday purchases casting a dark shadow over their performance of former years.

Economic projectors, who had foreseen a “major private expenditure surge,” blamed this disappointment on the fragility of good news from domestic and foreign policy events. Also weighing on public confidence is the upcoming presidential election. All this forces a continued personal spending restraint by America’s consumers (two-thirds of GDP), which could magnify the chances of a new forthcoming overall recession.

With the first quarter of 2016 in its early stages, such subsequent clarification, either good or bad, will have made itself felt before mid-year 2016 is reached.

Speaker Ryan in 2016

With the rare unification of the Republican House membership, U.S. Rep. Paul Ryan, R-Wis., took over the speaker’s gavel, despite an early reluctance to make himself available. This was due to his higher comfort level as chairman of the House Ways and Means Committee, a post he has held since the GOP won the House in 2010.

Being an outstanding expert on finances, taxes and budgets, Ryan, who had run unsuccessfully with Republican presidential nominee Mitt Romney as his vice presidential candidate, was supported by moderate and conservative wings of the GOP. He easily won the Speaker of the House position, allaying the fears of a long, drawn-out intra-party battle.

The big advantage of Ryan replacing long-standing predecessor John Boehner, R-Ohio, was the latter’s perceptive tendency to be too cooperative with the Obama administration. It was even questionable he would receive enough votes to be re-elected. Even more important is Ryan’s overall respectful standing, especially due to his in-depth expertise regarding a long overdue comprehensive tax structure that has changed little since President Ronald Reagan and House Speaker Tip O’Neill, D-Mass., collaborated to jointly agree on the last major tax law re-orientation in the mid-1980s.

Ryan’s leadership will be critical in launching an overall new structure, which also calls for a revision of the Internal Revenue Service. The nation’s tax collector has been presumably beset by a tilt toward the reigning administration, to the point of using IRS offices for sectarian political purposes.

With a host of prospective resolutions, including the realities of population numbers and income levels makeup, together with corporate capital gains and the tax inversion driving corporate headquarters abroad to foreign locations due to lower taxes, Ryan is considered the outstanding director of this overdue tax structure.

While such a massive undertaking will likely not be launched until after the Jan. 20, 2017 presidential inauguration, Ryan is well-positioned to lead such a far-reaching initiative, provided the Republicans maintain their House majority, as expected.