Sunday, November 20, 2005

The Economy and Housing

From todays NY Times.


"Asha Bangalore, an economist at Northern Trust in Chicago, tallied figures from the Bureau of Labor Statistics for sectors like construction, building material and garden supply stores. She found that from November 2001 to October 2005, housing and real estate accounted for a whopping 36 percent of private-sector payroll job growth. "In four years, 2.3 million private-sector jobs were created in the U.S., and 836,000 were related to the housing sector," she said.

Given everything else happening in the corporate world, the housing sector was the ideal place to have an investment boom. Building, selling, decorating and renovating homes is labor intensive. And unlike much investment in the broader manufacturing sector, the money pouring into the housing industry creates demand for American labor. Yes, some housing materials come from overseas. But virtually all the labor associated with housing - the roofers, the investment bankers who securitize mortgages into bonds, the clerks at Home Depot - is based in the United States."



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