Week of Oct. 18-26, 2004
Manufacturing, housing get multiple good news; most states add construction jobs
The homeownership rate in the third quarter was a seasonally adjusted 68.9% of all households, the Census Bureau reported Monday. That was slightly below the record high of 69.3% in the second quarter but up from 68.3% in the third quarter of 2003. Since the third quarter of 2000, the homeownership rate has grown the most for householders who are less than 35 years old (rising 2 percentage points from 41.1% to 43.1%, vs. a 1.3-point gain overall). That's a favorable omen for homeownership, since this age group will be growing more rapidly than the overall population as baby boomers' children reach adulthood. But the jump in ownership by an age group that historically rented for several years also helps explain why Census said the rental vacancy rate remained high in the third quarter at 10.1%, down slightly from the 10.2% in the second quarter and a record 10.4% in the first quarter but up from 9.9% a year before.
Existing-home sales in September rose 3.1% from August to a seasonally adjusted annual rate of 6,750,000, 1% above the pace in September 2003 and the third-highest on record, the National Assn. of Realtors reported Monday. Housing inventory levels at the end of September rose just 0.4% from August and the supply of unsold houses dipped from 4.6 months in August to a 4.4-month supply at the current sales pace. The national median existing-home price was $186,600, up 8.6% from September 2003. Earlier, Census reported October 19 that the number of building permits issued in September rose 1.8%, seasonally adjusted, from the upwardly revised August total and 3.2% from September 2003. Housing starts dropped 6% for the month, possibly affected by hurricanes and floods, and 1.2% from September 2003. And the National Assn. of Home Builders (NAHB) reported October 18 that its builders' confidence index rose strongly for the month.
Construction employment by state rose in 43 states and the District of Columbia from September 2003 to September 2004, according to Bureau of Labor Statistics (BLS) data released Friday. The biggest gains were in Nevada (12%), Idaho (11%), Utah, and Arizona (both 8%). The only decreases were in Wyoming (-5%), Louisiana (-3%), Michigan (-0.9%), and South Carolina (-0.1%). Two states were unchanged; data are not available for Hawaii. The number of gaining states and the leaders were consistent with total nonfarm employment changes. Nevertheless, 32 states still have lower nonfarm employment than in March 2001, the month the recession began, according to the Economic Policy Institute (www.epinet.org).
Today BLS released information on changes in employment and wages by county for the 317 counties with at least 75,000 employees, which covers 70% of total employment. These figures provide a clue as to where construction opportunities may occur. The largest percentage change in employment from March 2003 to March 2004 occurred in Prince William, Va. (8%), Rutherford, Tenn. (7%), Marion and Lee, Fla., and Placer, Cal. (all 6%). The report provides detail by industry for the U.S. and the 10 largest counties for the number of establishments (separate business locations, not temporary jobsites), employment and percentage change over the previous year, and average weekly wage and percentage change. Nationally, there were 811,500 construction establishments in the first quarter of 2004, with 6.5 million employees in March (up 3.5% from March 2003), earning an average weekly wage of $732 in the first quarter (up 1.4% from a year earlier).
The consumer price index (CPI) for all urban consumers in September rose 0.2% from August, seasonally adjusted, and an unadjusted 2.5% from September 2003, BLS reported October 19. The CPI for urban wage earners and clerical workers (CPI-W), which is used to adjust many wage contracts in construction and other industries, rose 2.4% for the September-September interval. Average hourly earnings in construction rose 1.1% over that span to $19.41 (23% higher than average earnings for all production or nonsupervisory workers). However, after deflation by the CPI-W, constant-dollar hourly earnings in construction were 1.2% lower than a year before. A steep drop in average weekly hours in construction drove down average weekly earnings by 3.2% in current dollars and 5.5% net of inflation.