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If housing is slumping, then why aren't former boom areas' economies? For the most part, housing fortunes have clearly turned sour in parts of Florida, Arizona, California and other states that posted the biggest price gains during the surge years of 2002 through 2005.
But these areas' economies are far from flattened. In fact, their expected rates of employment growth -- a handy barometer of overall economic health -- will outpace the national average of about 1% this year. For example, Florida's pace of job creation will reach 2% or so, while California comes in at 1.3% and Arizona advances a whopping 3.1%.
Credit their economic diversity, which allows these regions to weather the housing storm by drawing strength from a number of other industries. In Phoenix, aerospace and electronics companies are going gangbusters. Southern California is thriving in high technology, energy research, health care and entertainment. Meanwhile, tourism revenues in Las Vegas aren't missing a beat.
The housing market in Washington, D.C., and its suburbs in neighboring Maryland and Virginia is in retreat. But the capital region's biotechnology and federal contracting industries are intact -- setting the stage for 1.5% job growth this year.
Broad economic mixes will be ongoing assets for these areas as the housing market continues to slump. Pay little attention to recent news that housing starts gained a surprisingly healthy 2.5% in April after falling in March. Odds are the uptick in activity was mostly weather-related. More telling is the 6% plunge in construction permits during the month, indicating that builders don't see much business on the horizon. What's more, they say cancellation rates are on the rise again after a couple of months of apparent recovery.
The nation's true economic laggards largely steered clear of the housing mania earlier this decade. Rather, their housing markets are more of the slow-and-steady variety. Their problems are mainly related to their dependence on a few industries that are in trouble -- particularly the auto industry -- or on a lack of population growth that would stimulate demand for goods and services.
The Upper Midwest, the heartland for U.S. auto manufacturers, is in the worst shape. Michigan is on track for a 0.7% decline in jobs this year, while Ohio is poised to hold about flat and Illinois will rack up a paltry 0.8% advance. States likely to post job growth of less than 1% include Maine, Kentucky, Connecticut, Rhode Island, Vermont, New Jersey and West Virginia.
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POSTED BY: timcoulter (May 23, 2007 12:13 AM)
Nonsense!
telephone surveys & birth/death ratios, don't make mortgage payments.
Leading indicators, retail sales & foreclosures - need some that tweedledee from above.
US Government data as a reliable source for economic data has long past. Exactly why did the total employment drop by 150,000? Why did the birth/death ratio triple this month @ 317,000? And why would Fed economist now be considering hamburger flippers as a manufacturing job?
So the media, can lap dog their garbage to keep the minions thinking "all is well"
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