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Output and Job Growth Precede Housing Recovery, 300,000 Jobs Added in April
[Source:
www.nahbmonday.com
, May 13, 2010]
Employment in April increased by 290,000 jobs at a seasonally adjusted rate. On top of an upward revision for March of almost 70,000, this marked the fourth month of job growth and the largest increase since March 2006.
The added jobs in April included 80,000 in professional and business services, 45,000 in leisure and hospitality and 44,000 in manufacturing as well as the Census Bureau’s addition of 66,000 temporary decennial census workers in April and 48,000 in March.
As is typical at the beginning of a recovery, the gains on the employment front were not registered in the unemployment rate, which increased to 9.9% as news of hiring brought discouraged job seekers back into the market.
NAHB is forecasting that employment will continue to move to higher ground throughout 2010 and 2011, though not necessarily at April’s torrid pace. The unemployment rate is nearing a peak and by year’s end is expected to be around 9.3%.
Employment stability and job growth are keys to a housing recovery, alleviating the fears of existing workers that they will lose their paycheck and significantly improving the financial wherewithal of re-hires — both of which will boost the confidence of households that it is now safe to consider buying a home.
Gradual improvement in the employment picture provides the final ingredient needed to spur demand and launch a full-scale housing recovery as relatively low mortgage interest rates and house prices keep affordability at attractive levels.
Construction employment, in the meantime, has been turning in a mixed performance, with 10,900 residential construction jobs lost in April, up from 10,100 job losses in March, but a 15,400 increase in April’s non-residential construction jobs. The overall unemployment rate for construction climbed 1% to 20.3% in April.
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