March 9, 2013

Housing market rebound pushes job growth, too

By DON LEE Tribune Washington Bureau

(Continued from page 1)

click image to enlarge

New housing under construction on Munjoy Hill, as seen in this aerial photograph Wednesday, Feb. 6, 2013. Construction is expected to be complete by the spring.

Gabe Souza/Staff Photographer

Friday's jobs report was based on the government's survey of employers and workers in mid-February, two weeks before $85 billion in across-the-board cuts to federal agencies' budgets started to take effect.

The nonpartisan Congressional Budget Office has estimated that the cuts, known as a sequester, could cost 700,000 jobs over time and slow the economy. The pain probably would be felt particularly in places with a large military or government presence, including San Diego; Washington, D.C.; and Colorado Springs, Colo.

"If it weren't for the sequester, I think the strength of the home-building recovery would lead to powerful growth in 2013," said Richard K. Green, a real estate expert at the University of Southern California. Still, he said, the housing market "will absolutely" cushion the blow from the budget cuts.

In February, government employment dropped by 10,000 jobs, all of which came at state and local offices. Federal payrolls were flat.

The jobs report was not entirely glowing. Part of the drop in the unemployment rate, from 7.9 percent in January, resulted from workers' leaving the labor force. Jobless people who are not actively seeking work are not counted as unemployed.

Among the 12 million officially unemployed in February, about 40 percent have been without work for six months or more, a historically high figure that has raised concerns about a large population who may see their skills erode and stay permanently unemployed.

But analysts were overwhelmingly encouraged by the report, which exceeded their average forecast for about 160,000 new jobs in February.

Given the weak and inconsistent pattern of recovery, economists were mindful of past spurts of job growth that fizzled out after a few months. But the new report raised hopes that the step-up in hiring was for real.

"I don't think this is a false start," said Carl Tannenbaum, a senior vice president at Northern Trust Corp., a Chicago wealth-management and banking company.

 

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