"We will come back big time on employment when residential construction comes back," Warren Buffett said last year. "You will be surprised, in my view, how fast employment changes when that happens."

Well, look what happened this morning: Housing starts -- initial construction of new homes -- surged 15% to the highest level in four years:

Source: Department of Commerce.

September housing starts came in at an annual rate of 872,000. That was the highest since July 2008, and nearly double the pace seen at the bottom in early 2009.

As Buffett points out, don't underestimate how important a boost this could be for the economy. A home is the most expensive thing most people will ever purchase, and the amount of consumption and labor that goes into construction can spread throughout the economy as investment and spending begets more employment. It's a boost not only for the housing industry -- it's exactly why homebuilders like KB Home (NYSE:KBH) and Lennar (NYSE:LEN) have surged this year -- but nearly all domestic industries.

Today is a terrible day for the declinists.