Just as the Miserable Weather in December, January and February Froze Housing Markets, the Warming Spring is Spilling into the Economy.

Just as the miserable weather in December, January and February froze housing markets, the warming spring is spilling into the economy. April job growth pegged 288,000 net new jobs – the largest since January 2012. It was the fifth best monthly gain since February 2006 and ranked the ninth best month in the past 10 years.

The following graph shows the net change in jobs from the prior month since 2005.

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The next graph shows the net change in the prior 12 months in non-farm payroll employment. From peak to trough the U.S. lost 8.71 million jobs, but is now within 113,000 to tie the all time record reached in January 2008.

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Within employment sectors, net changes include:

  • Professional and Business Services, the top performer at 75,000 new jobs created in April. In the past year, this segment has grown by 738,000
  • Retail Trade, which gained 327,000 jobs in the prior 12 months, was up 35,000 in April.
  • Construction, +32,000 in the past month, has grown by 189,000 jobs in the past year.
  • Leisure and Hospitality added 28,000 jobs in April and 412,000 in the prior 12 months.
  • Manufacturing grew by 12,000 in the month and 99,000 in the past year.
  • Government employment, overall, increased by 15,000. The Federal government shed another 3,000, while states gained 1,000 and local governments hired 17,000. In the prior 12 month, total government employment has declined by 6,000.

Given the slow growing new housing market, the following graph shows the total employment within the residential construction industry. This category includes both single and multifamily workers. After peaking at 1.022 million in April 2004, the number of residential construction jobs fell by almost one-half to 556,400 as of April 2011. Single family construction made up 48.2 percent of the segments jobs in April.

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This many jobs is going to create a good deal of demand for housing of all types as it spurs household formation rates. I stick with my forecast of a 4 to 6 percent increase in existing home sales this year.

Historically, from 1.25 to 1.5 new jobs warrants an additional dwelling. In the 12 months ending March 2014 (since building permit data for April 2014 are not yet available), the country added 2.282 million net new jobs, but only issued 933,578 building permits, equaling 2.44 new jobs per new dwelling. This portends continued rising home values and rents.

I tried to come up with a saying akin to “April Showers Brings May Flowers.” My best was “April’s Jobs is Going to Help Housing Gobs.”

We will soon see.

What’s your version?



  1. Daniel

    What is your estimate for Q2 GDP? Would these flowers bring any significant change to the scenery? I’m concerned about regulation holding back the banks and letting businesses do their things, as long as that goes on can there be any real growth?

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