They Took Our Jobs! – July Jobs Report

August 5, 2012 by

I had a chance to look closer at the Bureau of Labor Statistics figures in the July Jobs report over the weekend.  After reading AGBeat’s article they pointed out a little hidden gem buried in the report.  They pointed out some good news for the 25-34 Age Group.

…among 25-34 year-olds, the prime age group for housing demand, 74.5% were employed in July, well up from 73.2% one year ago; their unemployment rate dropped to 8.2% from 9.7% one year ago. The job market has improved a lot in the past year for this prime age group for housing demand.

Read Full Article from AGBeat

Reading this  spurred me on to look closer at the age groups.  The 25-34 age group is the age group that has been struggling to get out and form new households because of lack of jobs thus holding back the housing recovery.  This is what is referred to as Pent Up Demand.  When someone buys their first home, the seller of that home then moves up to the next home, and that seller goes and buys another home  and so and so on…  so 1 sale triggers a series of sales.  The market has been slugging out foreclosures and short sales that don’t trigger another sale, if this age group hits the housing market we will be seeing a healthy housing market.

Upon verifying the claim from the article, I noticed something interesting.  The 35-44 and 45-54 age groups seem to be getting squeezed out of jobs by the 25-34  age group.   See chart below.

 

All age groups are having a tough time, but the 35-44 age group (Gen X) has been  getting crushed….  The 25-34 age group have have been seeing some improvement in their employment in the last year.  This doesn’t really give an explanation, but I would suspect that Gen Y’rs are getting hired before Gen X’rs because they may be willing to work for less money starting out.   The 45-54 age group has been struggling too, but not nearly as severe as 35-44 age group.

From 07/01/2007 to 07/01/2012 (5 year view):

  • 25-34 – Employment is down 1,083,000
  • 35-44 - Employment is down 3,627,000
  • 45-54 – Employment is down 1,591,000
  • 55+ Age Group- Employment is up +4,324,000

I don’t have any explanation for the 55+ age group..  The only thing I can think of is that many retired people may have gone back to work.  Afterall, 55+ is a pretty big spread in age.

 

(For the Gen X’ers:  As a Gen X’er myself, I couldn’t help but imagine a South Park episode on this…  “They Took Our Job!!” )

This covers a wide range of Employment, so there is more to these figures than meets the eye…

Employed persons consist of: persons who did any work for pay or profit during the survey reference week; persons who did at least 15 hours of unpaid work in a family-operated enterprise; and persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons. Each employed person is counted only once, even if he or she holds more than one job.

St Louis Federal Reserve source



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Minnesota Unemployment Rate & Employment Dec 2011
 
		
		
January 25, 2012  by   
		

			
Minnesota’s unemployment rate is down to 5.7% for December 2011.  Employment is a key component to the housing recovery.  Lately we  have been seeing improvement in the unemployment rate for Minnesota.


 




Let’s also keep in mind the actual jobs…  To buy a home, a buyer will typically need a job unless they are paying cash…


For Employment, we (MN) are at early 2004 levels, ironically enough that is where we are at for inventory of homes for sale too.  There is still a long way to go to get back to pre-recession levels, but there is a slow improvement.




 


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Minnesota Unemployment Rate down to 5.9% after losing 13,700jobs last month – the real numbers
 
		
		
December 15, 2011  by   
		

			
You have probably read that Minnesota’s unemployment rate is down to 5.9%, but we also lost 13,700 jobs last month.   The unemployment rate is rapidly becoming an obsolete number to track, with the current way it is calculated – it is not reflective of the jobs anymore.


For a better understanding of what the employment situation is like in Minnesota, we can look at the total number of jobs from MNDeed.


Here is a screen shot from MNDeed’s data center website.  These are the non-farm payroll jobs, not seasonally adjusted.  From this snapshot, it appears like we are at about 2004 levels for jobs, ironically enough – we are at about 2004 inventory levels for homes for sale in the Twin Cities too.  Wonder if there is a connection??   


Looks like we have a long ways to go in adding jobs.  Remember, not only do we need to get back to 2008 levels but we also need to add jobs from there to account for the increase in population..




 


 


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NAHB Improving Markets Index
 
		
		
November 10, 2011  by   
		

			
National Association of Home Builders
Image via Wikipedia


The National Association of Home Builder (NAHB) is tracking the Improving Markets Index (IMI).  The latest report adds 9 more Housing Markets that are improving.  Minneapolis/St Paul has not made the list yet, but I expect we will hit this list sometime in 2012 as our pricing stabilizes.


The index identifies metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in November


“Texas continues to dominate the list of improving housing markets in November, increasing its net number of entries to eight and continuing a trend in which energy-producing metros seem to be doing better than the average,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “Meanwhile, the geographic diversity of metros also continued to expand this month, with the states of Colorado, Georgia and Ohio all represented for the first time. This is further evidence that all housing markets are uniquely dependent upon local conditions, and some are leading the way toward an eventual, broader recovery.”


“The November IMI remains heavily weighted by smaller cities, with Pittsburgh and New Orleans as the only major metros represented,” said NAHB Chief Economist David Crowe. “This is indicative of the tough conditions that continue to prevail across much of the country, particularly in larger markets that have been hit hardest by job losses and foreclosures during the recession and that will take more time to heal. However, momentum is building in pockets of the country where energy and agriculture are the dominant industries and where consistent, measurable improvements in economic conditions are now becoming apparent.”


The two metros that dropped off of the improving markets list in November were Iowa City and Wichita Falls. These metros experienced declines in their employment and permit data, respectively.


The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.


Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.


I like to get a visual of where these markets are that are improving.  They are still concentrated in the Energy Production states and a little bit of agriculture.  These are the job growth sectors and housing is directly tied to employment. (This Map is interactive).



View NAHB IMI Map in a larger map


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Map: Where Minnesotans Are Moving to
 
		
		
October 19, 2011  by   
		

			
Forbes has an online interactive map showing migration around the Country.  Below is an image I got when I clicked on Hennepin County, MN.  The red lines are showing people moving out of Hennepin County and black lines are showing people moving in.  About the data, they are saying their data comes from the IRS and is for the year 2008.  I know 2008 sounds like really old data, but if you remember the twin cities losing population post – that is when we saw the decline in population and the height of our unemployment in the Twin Cities.  Reversing these trends requires job growth in our region.  I would like to see more recent data also, but this is some really interesting information – click on the image to go to their interactive chart and click around the Country to see if you begin to see a pattern.


click on map to link to Forbes interactive map


 


 


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Chart of the Day: Housing Starts vs. Unemployed
 
		
		
October 9, 2011  by   
		

			
Sometimes a Picture is worth a thousand words…  This one speaks volumes.


click to enlarge


Linked from Captain Capitalism


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Minneapolis/St Paul Residential Construction Employment
 
		
		
October 9, 2011  by   
		

			
I was inspired to see what kind of data was available for the Twin Cities metropolitan area for the Construction Employment from a post on Calculated Risk.


The graph below shows the number of total construction payroll jobs in the U.S., including both residential and non-residential, since 1969.




Construction employment is down 2.175 million jobs from the peak in April 2006, but up 53 thousand this year through the September BLS report.


Unfortunately this graph is a combination of both residential and non-residential construction employment…


…Usually residential investment (and residential construction) lead the economy out of recession, and non-residential construction usually lags the economy. Because this graph is a blend, it masks the usual pickup in residential construction following previous recessions. Of course residential investment didn’t lead the economy this time because of the huge overhang of existing housing units.


Read Full Article


 


I decided to take a look at our Region’s Construction Employment.  Minnesota Department of Employment and Economic Growth, MN Deed, breaks it down to Residential Construction.  The data here only goes back to 2005, but it paints a pretty good picture of our situation.




We had a peak Residential Construction Employment of 12,409 jobs in the Twin Cities metro area in July 2006, we have continually lost Residential Construction Jobs since.  We are down 58% to 5,157 Residential Construction Jobs as of August 2011.  Keep in mind, the impact goes a LOT deeper into the economy than this figure.  Think about all the auxiliary business that is created with new housing; appliances, building materials, landscaping, financing, decorating, the list goes on and on.


I am having difficulty drawing the same conclusion as CalculatedRisk based on this information. From our Region’s perspective, we are still bouncing on the bottom with no major improvement in Residential Construction employment. The key difference is that we are comparing Residential Construction Employment to their “Construction Employment”.


If we look at the similar data they are using, we can see that in the Chart below.  This is the  seasonally adjusted construction Employment for Minnesota, includes greater Minnesota. The construction employment gains do not appear to be coming from the Residential sector at this time.




Are we at the bottom?  I believe we are, but I also believe we will be “Catfishing” or “bouncing” along the bottom for a while longer.


 


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MN Adds 5,800 jobs in August – Unemployment Rate unchanged
 
		
		
September 15, 2011  by   
		

			
Ever wonder how you can add employment and yet the unemployment rate stays the same?  It always seems like “fuzzy” math to me…  But then again, I am no economist – I am only looking into the employment situation because this is the key factor holding the real estate market down.


Basically the report indicates Minnesota added 28,400 jobs in August, of which 22,600 were government workers going back to work after the State shutdown.  (wow.  that’s a big number!) 


According to their news release:  5,800 private sector jobs were created and we still hold at a 7.2% unemployment rate.


 …other sectors that gained jobs during the month were trade, transportation and utilities (up 4,100), construction (up 2,200), education and health services (up 1,400), manufacturing (up 1,200), and professional and business services (up 700).


The construction industry has added 7,500 jobs in the past four months, the first gain in jobs during the summer construction season since before the housing crash in 2006.


Job losses occurred in Minnesota last month in leisure and hospitality (down 3,300), financial activities (down 200), other services (down 200) and information (down 100). Mining and logging was unchanged.


Read Full Report from State of Minnesota DEED (Department of Employment and Economic Development)


 


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US Bureau of Labor Statistics Report: Unemployment Rate unchanged – Sept 2 2011
 
		
		
September 2, 2011  by   
		

			
This report was released this morning which looks like it sent stocks tumbling.  I am not certain why the stock market reacts to this – was their really expectations that the unemployment rate changed?  Really?


Again, this is a very important figure for the housing market both nationally and regionally here.  This report is the national unemployment report:


US Bureau of Labor Statistics Report 9/2/2011


Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today.  Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected

a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.


The number of unemployed persons, at 14.0 million, was essentially unchanged in August, and the unemployment rate held at 9.1 percent. The rate has shown little change since April. (See table A-1.)


CalculatedRiskBlog does great graphs on this data:


CalculatedRisk Blog Chart


 


 


 


 


 


 


 


 


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Hennepin County & Minneapolis/St. Paul, Minnesota Unemployment Rates August 31 2011
 
		
		
September 1, 2011  by   
		

			
 I have been preaching for many postings about what our real estate market needs to recover is JOBS.  It is difficult to buy a home if you don’t have a job…  The pricing won’t recover until we get the unemployment rate back to 3% – 5%, this gets more and more challenging the longer the recession (or this “recovery”) continues.  Assuming we retain population and households, we continue to add people to the workforce and need that many more jobs.  (as a side note, this may not be a problem referring to a  previous posting on the twin cities population and households moving away - which is directly related to JOBS.)


Twin Cities Region Unemployment Rate 07/01/2011 Released 09/01/2011


These charts come from US Department of Labor, Bureau of Labor Statistics graphed by the St Louis Federal Reserve, just released today.


This chart shows us the unemployment rate for Minneapolis/St Paul - Bloomington region, aka. the Twin Cities metro area.  As you can see we are not back to where we should be,  we are at 7.5% unemployment rate.  A far cry from the 2% to 3% we were experiencing in the late 90′s and early 2000′s.


We can zero in a little further to just Hennepin County.  Hennepin County is doing slightly better running at 6.9% unemployment rate.   Again a far cry from the 2%-3% unemployment rate and the 4%-5% rates through the first decade of the 2000′s.


Hennepin County Unemployment Rate 07/01/2011 Released 09/01/2011


   


If you are interested in seeing the real estate market turn-around restoring your home’s value – then we need to solve this employment problem.


How do we encourage business to stay or locate here and hire more employees?


Do we shift the tax burden over to the business’s property taxes so we can see our single family home’s property taxes stay lower? (which is what many municipalities are proposing..)  This is every bit as damaging to property values as higher single family property taxes, be it  in an indirect way. 


You will need to make your voices heard at the City, County and State level.  We need to create an environment to attract and retain employers in order to have employment, which in turn will provide economic growth including property values stabilizing or increasing. 


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