With unemployment holding steady last month at 5.6%, the Seattle Times brings us the details of the employment numbers’ relation to housing:
For the past year, the construction industry has been the main driver of economic growth in the state, accounting for a whopping 19.4 percent of all new jobs. Not so in November.
In what may be a sign of an impending cooling in the state’s red-hot housing market, construction firms hired 400 new workers last month compared with 2,400 during November 2004 and notably less than the average 1,075 monthly gains of the past year.
Although some anonymous commenters on this blog believe that the claims of construction accounting for ~20% of recent new jobs are “bogus,” that doesn’t change the reality that construction has been a major driving force in Washington’s economic recovery. And as such, I find it interesting and possibly meaningful that November saw such a relatively small number of new construction hires. Does this mean Washington has finally seen the peak of its housing market?
“It’s hard to tell what’s going to happen,” said Rick Kaglic, chief economist at the Employment Security Department. “We’ll need a few more months of data to know if the long awaited slowdown is upon us.”
Homebuilders assure it’s not.
“If homebuilders have one complaint, it’s the backlog of work they’re facing, not a decline in demand,” said Sam Anderson, executive officer of the Master Builders Association of King and Snohomish Counties.
I’m going to reserve judgment until I start seeing more signs than just one month of unusual numbers. If we start seeing numbers like this persist for 6 months then I’ll start to believe that we’re seeing a turn around. As I’m fond of saying, only time will tell.
(Josh Goodman, Seattle Times, 12.14.2005)