What the July jobs report means to housing industry


Monday morning, Kermit Baker, chief economist for the American Institute of Architects responded to the latest job numbers: "The July employment report was not strong enough to provide much support for the housing recovery. The national unemployment rate has been hovering around 9% for several months, which is still very high by historical standards. The 117,000 net increase in payrolls was better than the past two months, but not enough to generate much growth. The sense is that we need to generate about 150,000 per month on average just to keep up with new entrants to the labor force."

Originally posted Aug. 5, 2011

This morning, the U.S. Bureau of Labor Statistics released its jobs report for the month of July 2011. According to the report, employment rose 117,000 and the unemployment rate dropped from 9.2% in June to 9.1%. It's important to note the unemployment rate by month over a period of time: March 8.8%, April 9.0%, May 9.1%, June 9.2% and July 9.1%.

Throughout the year, both the National Association of Home Builders and American Institute of Architects have been vocal about the impact a hurting job market has on a housing market recovery. In June, during the Mid-Year Construction Forecast, David Crowe, chief economist for NAHB said a job recovery will "lead the country back to normal levels" - not residential construction.

In response to this morning's announcement Crowe says: "The jobs report today and the slight decline in unemployment are good news for the economy and housing, but real housing improvement needs consistent job gains at 200,000 or more per month. Today’s gain is not enough to make a significant dent in unemployment or in consumers’ confidence that a recovery is here to stay. Prospective home buyers need greater confidence in their own economic future before they can take advantage of the very low interest rates and home prices. A steady and consistent improvement in job gains will encourage home buyers back in the market."

Does the July jobs report make you more or less optimistic, or unaffected?