I just want to make the case that a tax cut shouldn't be passed for the reasons of preventing a recession, because it may not be fast enough. The most effective way of preventing growth rates from turning negative is to let monetary policy have its way. Don't expect unreasonable things from tax cuts, they have their limits. Sales of new homes surged at the end of last year. This is in a large part due to declining interest rates and expectations of declining interest rates.
Interest rates determine mortgage rates, which have a significant impact on the cost of a home.
This is indicative of a rising level of unemployment. Recently, companies have been talking about major layoffs, to take place in the near future, which should help to drive this number up even higher over the next few weeks. This was larger than most market participants had expected, and may have been a significant contributor to the fourth quarter GDP number. It will be interesting to watch and see if construction spending can remain robust in an economy with expectations of future downturns in the economy. Perhaps this is a sign that some people expect the current slowdown to be temporary, and that in the time frame of construction, perhaps demand will pick back up in the not too long run.