Interesting news from Freddie Mac on our economic outlook, new construction, and the impacts on our unemployment rate.
- Expect GDP growth in 2013 to be about 2 to 2.5 percent, below its 3 to 3.5 percent potential.
- As of April 2013, the percent of the population participating in the labor market was at 63 percent, lower than any time since 1980.
- The relationship between the unemployment rate for construction workers and job openings has not shifted, as it apparently has for all other workers.
- Forecasting housing starts will increase by about 200,000 units in 2014 compared to 2013, which suggests the unemployment rate for construction workers should fall by around 1.5 percentage points and add 100,000 to 200,000 additional jobs in construction alone.
- As of March, the median time-on-market for new homes was 5 months, which is in line with historical averages, and down sharply from the Great Recession high of over 14 months.
Attributed to Frank Nothaft, Freddie Mac vice president and chief economist.
- “While the broader labor market might be facing a skills-match challenge, in the construction sector, it’s a matter of structures, not a structural employment problem.
- “Household formations are expected to gradually rise to a 1.2 to 1.4 million annual pace in coming years, supporting a sustained level of construction. Supplement this with replacement of existing stock and building for the second-home market housing starts should rise to 1.7 to 1.8 million dwellings by 2017. This will supply the juice to help strengthen the recovery.”
Freddie Mac compiles data on major economic, housing, and mortgage market indicators and offers forecasts based on those indicators.