Wall Street Journal (10/18/12) Robbie Whelan
Residential construction picked up momentum in September and now is running at its highest level since 2008, a turn that could have a positive effect on the jobs market and the broader U.S. economy. Builders started work on new houses and apartments at a seasonally adjusted annual rate of 872,000 units last month, the U.S. Commerce Department reports, up 15% from August and 34.8% from September a year ago, far exceeding economists’ expectations.
Many economists believe that the rise in construction, if sustained, could boost job creation and economic growth. The National Association of Home Builders estimates that each home built generates three full-time jobs and $90,000 in new tax revenue. “The path between here and when we get to a sustainable pace of home building, should add, cumulatively, up to two percentage points” to the nation’s gross domestic product, says Michael Feroli, chief U.S. economist at JPMorgan Chase.
The recent growth in residential building “gives some hope in the coming months for more construction jobs,” said Anika Khan, a senior economist with Wells Fargo. “A lot of construction workers are the ones who have been discouraged and underemployed, on the sidelines. If these particular workers find work, it will have a big overall economic impact, because it will boost wage and salary growth and income growth.”
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