Friday, April 1, 2011

At Last: Solid Job Growth Numbers

The Lehmann Letter (SM)

216,000: That's the March job-growth number. And the private-sector figure was even larger: 230,000.

You can see for yourself by going to the Bureau of Labor Statistics website:

This is the second month of solid employment gains. These figures are preliminary and subject to revision, but the trend so far is certainly positive.
You can see from the chart that a robust economy brings job gains of between 200,000 and 300,000 per month. We enjoyed that kind of growth from 1995 to 2000 (dot-com boom) and in the middle of the last decade (real-estate boom).

Job Growth

(Click on chart to enlarge.)

Recessions shaded

But the unemployment rate remains high at 8.8%. We can't say we've reached full employment until that rate drops below 5%.

That means the economy must grow swiftly enough to provide between 200,000 and 300,000 new jobs each and every month for several years into the future. This letter has expressed doubt that the task can be accomplished without the revival of the residential real-estate industry.

Unfortunately homebuilding remains in the doldrums. We will have to wait and see whether or not the economy can return to full employment without a strong contribution from one of its most important sectors.

(The chart was taken from [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2011 Michael B. Lehmann

1 comment:

zhonglin said...

The housing market and employment are interaction and mutual promotion. High unemployment, banks put tighter lending standards and uncertainty about home prices have kept lots of people from buying homes, despite currently low mortgage rates and home prices have fallen a lot since the peak of the housing boom. I think the job market (or the unemployment rate) needs to improve before the housing sector can recover. This is the prerequisite for our real estate recover. And not all markets will recover very quickly, such as California, Florida, Nevada, Arizona……, because those states is hit hardly by foreclosures.