As we discussed a while back, construction now drives changes in employment. The earlier post focused on construction spending. Let's now take a quick look at the same relationship with respect to housing starts.
Here is a chart that compares initial jobless claims with US total housing starts. The housing starts number (from the US Department of Commerce) comes out monthly, while initial claims (from the Department of Labor) is a weekly measure. Nevertheless the relationship is clear. In this environment construction growth is key to stop the blood letting in employment.
From the US Department of Housing and Urban Development:
BUILDING PERMITSThat increase in starts translated into a sharp drop in initial claims. It doesn't necessarily mean the US economy has recovered (there is a long road ahead), but some stability with respect to jobs is a very much welcome sign. With manufacturing struggling , that stability in employment will come from improvements in construction.
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 563,000. This is 8.7 percent (±3.0%) above the revised May rate of 518,000, but is 52.0 percent (±3.6%) below the June 2008 estimate of 1,174,000. Single-family authorizations in June were at a rate of 430,000; this is 5.9 percent (±1.4%) above the revised May figure of 406,000. Authorizations of units in buildings with five units or more were at a rate of 109,000 in June.
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 582,000. This is 3.6 percent (±11.3%)* above the revised May estimate of 562,000, but is 46.0 percent (±4.3%) below the June 2008 rate of 1,078,000. Single-family housing starts in June were at a rate of 470,000; this is 14.4