articles about “Jobs Report”
Relative to Construction Activity, There Are Actually a Lot of Construction Jobs
Even though construction employment is rebounding more slowly than construction activity, there are more construction jobs per unit under construction than normal
In the monthly employment report for March, the Bureau of Labor Statistics (BLS) reported this morning that residential construction jobs increased 3.8% year-over-year. (We include both “residential building construction” and “residential specialty trade contractors” – here’s why.) That’s faster than the overall employment increase of 1.4% – reflecting that housing is now a critical part of the economic recovery.
A quick glance suggests that construction jobs aren’t keeping up with construction activity. Even though residential construction employment growth is outpacing overall employment growth, it’s puny relative to the rebound in construction activity, measured in housing units or dollars:
|
The Housing Recovery: Jobs, Housing Units, and Dollar Value |
||
|
% Change |
% Change since bottom |
|
| Residential construction jobs |
3.8% |
7.0% |
| New housing units under construction |
28% |
39% |
| Dollar value of residential construction (new construction only) |
34% |
50% |
| Dollar value of residential construction (new construction plus improvements) |
18% |
32% |
| Note: Jobs data through March 2013, from BLS; units under construction and dollar values through February 2013, from Census. Dollar values are adjusted for inflation and reflect the cost of labor, materials, contractor’s profit, and more. “Bottom” was January 2011 for jobs; Aug 2011 for units; May 2011 for dollar value (new only); and July 2011 for dollar value (new plus improvements). | ||
Not Just Construction Jobs: Housing Recovery Boosting Jobs Economy-Wide
The housing recovery has added 125,000 residential construction jobs so far -- plus more than 184,000 jobs in other housing-related industries
This morning’s Bureau of Labor Statistics (BLS) jobs report showed that job growth in all housing-related sectors–not just construction–is outpacing job growth overall. Several recent key measures of the housing market show clear recovery:
- Asking prices in February were up 7.0%, year-over-year.
- The number of units under construction–which is the measure that construction jobs track closely–was up 26% year-over-year in January.
- The number of conventional home sales (that is, excluding foreclosures and short sales) was up 29% year-over-year in January.
More construction activity means more construction jobs, of course. But the housing recovery is also creating jobs outside of the construction sector, including the manufacturing firms that make lumber and concrete; stores that sell building materials and construction supplies; mortgage and other housing-related financial firms; and real estate agents, brokers, and other real-estate-related businesses. In all of these housing-related industries (see definitions at the end of this post), employment is growing faster than for the U.S. economy overall:
|
Year-over-year |
Current versus peak |
Current versus trough |
Trough versus peak |
|
| U.S. economy overall |
+1.5% |
-2% |
+4% |
-6% |
| Residential construction |
+3.1% |
-39% |
+6% |
-42% |
| Manufacturing (housing-related)* |
+1.7% |
-31% |
+4% |
-34% |
| Wholesale and retail (housing-related)* |
+2.0% |
-13% |
+5% |
-17% |
| Mortgage and finance (housing-related)* |
+10.8% |
-43% |
+12% |
-49% |
| Real estate agents, brokers, and related activities* |
+3.0% |
-4% |
+5% |
-9% |
| All housing-related employment* |
+2.7% |
-28% |
+5% |
-31% |
| *Latest data published for housing-related jobs in manufacturing, wholesale/retail, mortgage/finance, and real estate agents/brokers/related activities—as well as for all housing-related employment—is for January, not February. Note: Peak and trough employment dates vary by sector. All figures are seasonally adjusted. Residential construction employment includes residential specialty trade contractors. Source: BLS. | ||||
Residential construction employment is up 3.1% — twice the overall employment growth rate of 1.5%. But other sectors are seeing job growth, too: employment among housing-related wholesalers and retailers–like building-supply stores–is up 2.0%, and job growth is up more than 10% in mortgage and housing-related finance jobs, too. Employment in all housing-related industries, including residential construction, is up 2.7% year-over-year, though still down 28% from its peak.
The trough-versus-peak, though, shows how much employment rose and fell with the housing market. While employment overall fell 6% from peak to trough, employment in housing-related sectors fell 31% peak-to-trough, with declines of over 40% in both residential construction and mortgage and other housing-related financial businesses. Even though employment in housing-related industries has had a strong recent bounce off the bottom, housing-related jobs are still far below their peak during the housing bubble.
Which NAICS codes did we count as “housing related”? Within construction, NAICS 2361 (residential building) and 238 part 1 (residential specialty trade contractors). Within manufacturing, 321 (wood products), 3273 (cement and concrete products), 3323 (architectural and structural metals), 33312 (construction machinery), and 33711 (wood kitchen cabinets and countertops). Within trade, 4233 (wholesale lumber and construction supplies), 4237 (wholesale hardware and plumbing), 42381 (wholesale construction equipment), and 444 (retail building material and garden supply stores). Within finance, 522292 (real estate credit) and 52231 (mortgage and nonmortgage loan brokers). Within real estate, 5312 (offices of real estate agents and brokers) and 5313 (activities related to real estate).
Better Off Than 4 Years Ago? Voters Didn’t Care
Obama got less, not more, of the vote in 2012 relative to 2008 in metro areas where unemployment fell and home prices rose during his first term.
(After publishing this post, we got great feedback and decided to do a more technical and detailed follow-up, which is here — JDK.)
Why did Obama win? Throughout the campaign and in exit polls, voters said the economy was their #1 issue. But election data shows that voters did not reward the President in markets where the jobs and housing recoveries are strongest.
How Obama Fared In 2012 Versus 2008
To see how the local housing and jobs recoveries affected the election, let’s first compare Obama’s margin in 2008 with Obama’s margin in 2012, using county-level election results compiled by the U.S. Election Atlas. Nationally, the latest count shows that Obama won 50.6% of the popular vote in 2012 compared to 47.8% for Romney – a margin of 2.7% (the numbers don’t add up due to rounding). In 2008, Obama won 52.9% versus 45.7% for McCain – a margin of 7.3%. Nationally, therefore, Obama’s margin fell from 7.3% in 2008 to 2.7% in 2012 – a drop of 4.5 percentage points.
In general, in metro areas where voters favored Obama in 2008, they favored him again in 2012. (The correlation between Obama’s margin in 2008 and Obama’s margin in 2012 across metro areas was 0.99.) But Obama’s margin grew in some metros between 2008 and 2012 while falling in most metros. Comparing the presidential votes in 2008 and 2012 among the 100 largest metros, Obama’s margin increased most in Miami and New Orleans. His margin also increased in New York and the upstate metros of Syracuse and Albany.
|
Where Obama’s Margin Increased the Most |
||||
| # | U.S. Metro |
Change in Obama’s margin, 2012 vs 2008 |
Obama’s margin vs Romney, 2012 |
Obama’s margin vs McCain, 2008 |
| 1 | Miami, FL |
7.6 |
23.7 |
16.1 |
| 2 | New Orleans, LA |
6.1 |
-0.1 |
-6.2 |
| 3 | New York, NY-NJ |
2.4 |
48.3 |
45.9 |
| 4 | Baton Rouge, LA |
1.8 |
-12.4 |
-14.2 |
| 5 | Edison-New Brunswick, NJ |
1.5 |
3.1 |
1.6 |
| 6 | Syracuse, NY |
1.5 |
16.9 |
15.4 |
| 7 | San Jose, CA |
1.0 |
41.3 |
40.4 |
| 8 | Albany, NY |
0.9 |
15.5 |
14.6 |
| 9 | Fort Lauderdale, FL |
0.2 |
34.9 |
34.7 |
| 10 | Columbus, OH |
0.2 |
6.1 |
5.9 |
| Among 100 largest metros. | ||||
In the other direction, Obama did worse relative to his Republican challengers in 2012 than in 2008 in most metros – and more than 10 points worse in Salt Lake City, Indianapolis, and Lake County – Kenosha County (just north of Chicago).
|
Where Obama’s Margin Decreased the Most |
||||
| # | U.S. Metro |
Change in Obama’s margin, 2012 vs 2008 |
Obama’s margin vs Romney, 2012 |
Obama’s margin vs McCain, 2008 |
| 1 | Salt Lake City, UT |
-19.5 |
-20.1 |
-0.6 |
| 2 | Indianapolis, IN |
-10.5 |
-8.0 |
2.5 |
| 3 | Lake County-Kenosha County, IL-WI |
-10.3 |
9.0 |
19.3 |
| 4 | St. Louis, MO-IL |
-9.4 |
6.6 |
16.0 |
| 5 | Grand Rapids, MI |
-8.5 |
-9.6 |
-1.1 |
| 6 | Kansas City, MO-KS |
-8.3 |
-3.1 |
5.2 |
| 7 | Omaha, NE-IA |
-8.3 |
-10.9 |
-2.6 |
| 8 | Austin, TX |
-7.0 |
7.1 |
14.1 |
| 9 | Ventura County, CA |
-6.9 |
5.3 |
12.2 |
| 10 | Allentown, PA-NJ |
-6.7 |
2.6 |
9.3 |
| Among 100 largest metros. | ||||
How Long Will You Need to Save to Buy a Home In Your City?
Originally published on The Atlantic Cities on August 28, 2012.
How long do you have to work in order to afford a home? Ahead of the upcoming Labor Day weekend, we calculated how many years it takes to save enough for a down payment in the 100 largest U.S. metro areas, factoring in both local average wages from the Bureau of Labor Statistics’s Quarterly Census of Employment and Wages and local housing prices based on the median asking price per square foot of homes listed on Trulia.
We assumed that people saving for a down payment set aside 10 percent of their pre-tax earnings – even though of course that depends on your earnings and how much you want to put away – and will earn an annual return of 1.5 percent on those savings. We also assumed a 20 percent down payment, the traditional norm, though many mortgages (including FHA-insured mortgages) require less than a 20 percent down payment (see note at end).
Feb Jobs Report: More Jobs for Young Adults Today = More Housing Demand Tomorrow
The jobs picture keeps getting better for 25-34 year-olds, and construction employment kept pace with solid overall employment growth.
The February 2012 jobs report, released this morning, was once again very strong for housing. First, the jobs picture keeps getting better for 25-34 year-olds. Second, construction employment kept pace with solid overall employment growth.
Unemployment among 25-34 year-olds
Why does this indicator matter for housing?
Between the ages of 25 and 34 is prime time when many people form households with a spouse, partner, roommate, or by themselves, then start families and buy their first home. During and after the recession, household formation dropped for this age group, and more of them than ever were living with parents or other adults rather than renting or owning their own place. These folks will wait to form their own households and consider homeownership only when their job prospects improve. A key measure for housing demand and homeownership is the unemployment rate for this group and the share of this age group that is employed.
What happened this month?
In February, the unemployment rate for 25-34 year-olds dropped to 8.7% from 9.0% in January and is at its lowest level in three years. The unemployment rate for all adults stayed steady at 8.3%. The recession hit this age group especially hard: their unemployment rate peaked at 10.6%, compared to 10.0% for all adults, but this gap is now closing. In February, 74.7% of 25-34 year-olds were employed (the rest were unemployed or not in the labor force because they’re in school, discouraged from looking or not looking for other reasons), up from 73.9% a year ago, but still way below the normal level of almost 80%.
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