Housing Slump - no spill over into employment #s

Discussion in 'Economics' started by aeliodon, Nov 17, 2006.

  1. I thought the housing boom accounted for most of the new jobs created in the past few years. Now that we're seeing the biggest deflation in housing prices, sales, and construction in a long while, why is there no spill over into the employment #s.
    Apart from the Katrina related dip, employment has stood firm in the face of record high oil prices and now a recession in housing. Who's hiring?

  2. Starbucks and Wal Mart...
  3. BLip


    Read some posts in this thread, posted less than an hour ago:


    It may be that there hasn't been sufficient lag time yet.
  4. Yes there maybe a lag, but I don't buy that. We're already several monthes if not a year into the housing correction and no sign of job losses yet. A lot of the correction may already be behind us now, really strange.
  5. dac8555


    Great question. I would guess that these things do not end overnight. The homebuilders did not start to plunge until January.

    I think we will know more in a year.
  6. S2007S


    The housing boom has accounted for millions of jobs in the last 5 years.

    Between 2003 and 2006 approx 1.2 million jobs have been created in this industry. 30-40% of new jobs created over the last 3 years have been related to the housing boom

    I dont think the impact is being felt yet, I would say within 6-12 months you should see the outcome of the housing downturn within the economy and loss of jobs.
  7. Arnie


    Well, I think there is a lag. Mortgage brokers and Realtors are paid on commission, so many will try to tough it out for awhile. I read somewhere that 25% of California's employment is based on the housing sector.
  8. I have seen it firsthand. As I have mentioned before, my wife works in mortgage banking for one of the largest homebuilders. They just layed off about 20% of their staff a week ago. No notice, a few weeks severance, and walked out the door as they walked into work, literally. They expect more cuts in January since 4th quarter is their slowest time. They are cutting corners left and right, she tells me every week. I am sure many late to the party Realtors are revaluating their career changes as well.

    FWIW, employment #'s can and are manipulated. Alot of the jobs added in the last few year, that aren't home bubble related, are low paying service jobs.
  9. jheacock


    many of the construction jobs were illegal immigrants, so they probably won't be filing for unemployment.
  10. I guess then they would be a nonfactor all they way around. No taxes, no reporting, no unemployment.
    #10     Nov 17, 2006