Weak Housing Market Hampers Job Growth
MSNBC reports today that since the middle of last year, a downturn in the U.S. housing market has taken its toll on a wide group of people and companies.
In particular, the market slump has pummeled home builders, condo flippers, borrowers with bad credit, just about anyone with a home for sale and just about every mortgage company who overstepped its credit bounds.
Now the real estate slump is hitting yet another target: housing-related jobs, a long list that includes everyone from the home builders and real estate agents who sell homes to makers of appliances and furnishings.
That’s a sharp contrast to the height of the housing boom in 2005-06, when the industry was responsible for creating some 25,000 to 50,000 new jobs every month, according to Mark Zandi, chief economist at Moodys.com.
In the recent months it’s been laying off workers at a pace of 25,000 to 50,000 per month,” Zandi said.
“And I think the next couple of quarters we’ll start seeing job losses of between 50,000 and 75,000 per month. I think the housing market is going down a whole other notch.”
With the global stock market on edge - in no small part due to bad credit mortgage uncertainty - and analysts debating the odds of recession, the government’s monthly jobs data, due out Friday, will be scrutinized more closely than ever for hints of what lies ahead.
Housing-related job losses are expected to put a dent in the overall pace of February job growth, which economic forecasters believe will slow to 100,000 new jobs or less — down from a gain of 111,000 in January.
Market watchers got a preliminary read on the job numbers Wednesday with the release of a separate survey from payroll processor ADP, which showed non-government job gains of just 57,000 in February.
Since the ADP report doesn’t include government jobs, that’s equivalent to job gains of just 75,000 in the official government numbers. But what’s to come in the next few months, if home loan problems persist?
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