Construction Industry Loses 26000 Jobs in October

[CAwireman]

"The Labor Department reported that despite the overall growth in employment, the manufacturing sector lost 39,000 jobs in October and the construction industry, buffeted by the plunge in the housing market, lost 26,000."

                    Link

Republicans applauded the .2 % drop in unemployment from last months reports. 

                   But 

"The economy added only 92,000 jobs in October, fewer than the 125,000 consensus prediction of private economists."

                  However

"But the Labor Department revised upward its preliminary estimates for August and September by a combined 139,000 jobs, more than offsetting the disappointment of the October figure."

What's a bubble watcher to do? 

 

 

 

[L_Thek_onomics]

Relax. The 26,000 jobs are not necessarily “lost” jobs.
In the construction industry the fall layoffs are part
of doing business. I suspect, the 26,000 number is an
interpretation of number of filing for unemployment
benefits. I have no data for previous years, but I’m
sure the numbers are very similar year to year.

L Thek

[powayseller]

The unemployment numbers are confusing and are leaving me whiplashed. There is so much revision, you wonder if the initial number is of any use. Has anyone looked at the types of jobs gaining? Is it mostly service jobs in fast food joints, more temporary help in Professional and Business Services, and government and health care, all the same old stuff? We know that housing and auto are slowing down, so it will show up in the numbers soon enough. It definitely will show up. Besides, employment is a lagging indicator. As Ann Marshall from the California Labor Market department told me this week, “employment shows where we are now”. It is a snapshot of today, not the future. I would say it shows where we have been, as Joseph Ellis shows in his book Ahead of the Curve that employment often rises even after a recession started, because it lags so much.

Ellis says many people make the mistake of gauging the economy by employment. It’s the biggest mistake that investors make, according to Ellis. Likewise, the unemployment rate is highest when the recession ends, and instead of getting back into the stock market, people are scared off by high unemployment numbers. Employment lags by several quarters, so it is natural for it to be rising as we go into a recession.

Leading the economic cycle is consumer spending, then capital spending. Both are starting to slow.

[unlawflcombatnt]

Another telling indicator of where the economy is going is the declining GDP growth. There is a great article titled ” The Big Picture: Actual GDP: ~0%” describing the still unbelievable 3rd quarter GDP growth of 1.6%. The author points out the lower-than-expected GDP deflator (1.8% instead of the predicted 2.8%) as well as the “surprise” increase in auto sales of 26%. He suggests that 3rd quarter GDP will be revised down to 0% growth.

Many economists are now calling for a recession in the near future. And it’s the bursting of the housing bubble that’s leading the way. Both the loss of home equity loan-financed consumer spending and massive job loss in real estate-related fields will exacerbate the slowdown.

Home prices will take an even greater hit with the income loss from employment declines in real estate-related fields.

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