Goldman Sachs: Housing-Related Employment Should Boom

Friday, 15 Feb 2013 08:47 AM

By Dan Weil

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The housing market’s rebound should produce major gains in job creation, according to Goldman Sachs economists.

They predict in a report obtained by CNBC that housing-related jobs may start growing at a rate of 25,000 to 30,000 per month this year, perhaps doubling the 14,000 average of the past year.

But, "even at this faster rate, it will take many years before housing-related employment attains its prior highs," the report states.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

Total non-farm payrolls gained 157,000 in January.

The housing industry suffered worse job losses than other industries during the recession and has seen less of a rebound in hiring than other industries since the downturn ended.

This is the case despite the gains in home prices, home sales and home building last year.

The home construction sector shed 42 percent, or 1.5 million, of its jobs from the 2006 peak to the early 2011 trough. Only 100,000 of those jobs have been added back since the bottom.

A reluctance to fire even more workers during housing’s slump may be the cause of a reluctance to hire them during the recovery, the report says.

Fueling the future job gains will be 10 to 15 percent growth in real residential investment this year and next, Goldman economists forecast.

Yale economist Robert Shiller is much less enthusiastic about the housing market.

For the next five years, home prices could easily rise 1 to 2 percent annually, but they could easily fall by that amount too, he tells CNBC. “It's sort of flat.”

Home sales rose 9.2 percent last year, and single-family home prices gained in 88 percent of U.S. cities in the fourth quarter.

It’s difficult to know how much of the recent strength stems from seasonal factors, Shiller says
“I'm not confident at all that it will keep going up.”

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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