Here's this morning's press release from the Department of Employment and Economic Development.
I'm trolling through it now. A few thoughts:
-- Minnesota construction jobs continue to get hammered, down 2,500 in August; down 8,100 from the same time a year ago and falling much faster compared to the construction sector nationally.
We noted earlier this week the hit construction jobs have taken during the recession.
This chart from the Minnesota Housing Partnership focuses only on residential building jobs, but it's pretty telling about the construction business generally.
Right now, there's not much hope for that trend line and all the people it represents.
-- Manufacturing continues to recover slowly. It lost 200 jobs in August but is up 5,600 from last year. Still, it's a long climb back from the glory days before the recession.
-- Only five of the state's 11 sectors added jobs in August. Professional and business services grew by 4,900 jobs but administrative and support services, which includes temporary help, accounted for most of the growth in this sector.
Experts typically view temp job growth as a positive leading indicator. But we've been seeing that for several months now and wonder when temp jobs will turn into permanent ones.
-- DEED identified 488 green jobs open in the state during the fourth quarter of 2009, most in environmental cleanup, education, regulation, renewable energy and sustainable agriculture.
See anything that jumps out at you in the data?
The news on the housing market is grim. To get another read on the market, I decided to look at what Morris Davis, professor of real estate and urban land economics at the
Wisconsin School of Business at the University of Wisconsin, Madison, is writing. He does some of the more insightful research into the dynamics of the housing and rental market. Maybe I decided to look him up because I'm at the airport near Green Bay, WI, (waiting the fly back to the Twin Cities). His latest paper is Reflections on the Foreclosure Crisis. It's from June, 2010, but it makes for sober reading.
He calculates that the foreclosure crisis is far from over. And "crisis" is certainly the right word. Davis notes that in the 27 1/2 year period between 1979 and mid-2006, for example, there was a cumulative total of 7.5 million foreclosure proceedings. That's a rate of 275,000 a year. Yet in the 3 1/2 year period between mid-2006 and year-end 2009, 6 million foreclosure proceedings had been started--an annual rate of 1.7 million per year. He expects 4 to 5 million foreclosures this year and next.
Davis argues that two triggers behind the foreclosure epidemic. First, homes are worth less than the mortgage. They're underwater. To paraphrase the philosophers, that's a necessary but not sufficient condition. The second foreclsoure trigger is unemployment. Well, the past few years have the worst housing market and the worst labor market in 60 years. " Both foreclosure triggers are still in place," writes Davis.
Specifically, the Congressional Budget Office is forecasting that the national unemployment rate will remain above 9.0 percent in both 2010 and 2011. Many homeowners will remain under water. Davis assumes that house prices and housing rents will increase at the same rate over the next few years--a reasonable assumption. In that case, he estimates that house prices could rise in nominal terms by somewhere between 1 percent and 2.5 percent a year for the next two years.
My read: The housing market will stagnate at best for the next couple of years.
Got to board the plane now.