After April's weak sauce jobs report, PoliticOlogy said we'd have to wait a few weeks to tell if the dip in hiring was a blip—likely an adjustment from the warm winter spurring inflated job growth—or an indication of a new, longer-term slowdown.
Early numbers suggest the former. New housing starts climbed in April, almost three percent over March but 30% over the same period last year. "The housing recovery," Calculated Risk concludes simply, "continues." Andrew Leonard at Salon draws out the long game: "New housing starts mean more construction employment and rising retail sales to fill those new houses."
Chart, via Calculated Risk, showing the housing market's slow climb out of the post-bubble collapse:
Meanwhile, much of March and April's slowdown occurred in industrial and manufacturing, both of which are already showing signs of turning around, albeit by tiny increments. Still, industrial production is 5% more robust than the same time last year. Chart, again via Calculated Risk:
Finally, gas prices are dropping. PoliticOlogy is on record as not really caring about gas prices one way or the other, cuz Death To Exurbs!!! But to the extent that low gas prices ease individual financial burdens and make life easier on business, the lower the better.
All of this is good, none of it is worth popping a bottle of Andre over. It's unclear how much modest boosts in manufacturing and construction will translate to meaningful job growth. The U.S. economy needs to add 250,000 jobs a month from now till forever to get back on track. April saw an increase of 119,000. That's a big gap, one that's not filled in any timely measure by monthly 1.1% increases in manufacturing. Economic revivification is impossible without serious, sustained job growth, and economic confidence among both voters and the market won't improve until jobs do.
Another worrisome point: foreclosures remain high, though they are gradually decreasing. Via the Wall Street Journal: "The percentage of American homeowners behind on their mortgage payments fell during the first quarter to the lowest level since the end of 2008. But the share of loans in foreclosure remains stubbornly high." High foreclosure rates cast a shadow over the gaining housing market. There's no direct connection between the mortgages of the housing bubble and the mortgages being handed out today, but it does raise the specter of the continuation of the same reckless lending policies that helped land us in a depression recession in the first place. Is it possible to improve the housing market without feeding into the cycle of debt that does little to create a stable economy?
Job numbers for May and June should tell us more about whether these improvements will be felt in the job market. Until then, fingers crossed.
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Related: April Jobs Report As Bad As Expected
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