Trulia looks at three measures in the monthly jobs report to see whether housing is helping jobs and whether jobs are helping housing. Residential construction employment shows whether housing is helping jobs. Job growth for young adults (key age group for household formation) and job growth in "clobbered metros" (those hit hardest in the housing bust) show whether jobs are helping housing.
The April jobs report showed solid construction-job growth nationally, plus a continued jobs recovery in clobbered metros. But young-adult employment slipped a notch.
Residential construction employment, including residential specialty trade contractors, increased by 13.1 thousand in April versus one month earlier, and by 29.5 thousand versus three months earlier (see chart). That's steady growth: residential construction jobs are up 5.0% year-over-year, ahead of overall job growth of 1.7%. Why is construction employment still growing even though new-home starts fell 6% year-over-year in March? Because employment is more closely tied to the number of units under construction, which were up 21% year-over-year in March. Single-family homes are typically under construction for several months, and multi-unit buildings are typically under construction for a little over a year.
Young-adult employment stumbled. Employment among 25-34 year-olds, the prime age group for housing demand, was at 75.5% in April, after three months at 75.9-76.0%. But it's too soon to tell whether this downturn is a blip or a trend. Young-adult employment still isn't halfway back to normal: before the bubble, their employment-population ratio hovered in the 78-80% range -- see chart below. Having a job matters for housing. Just 12% of employed 25-34 year-olds live with their parents, versus 20% of 25- to 34 year-olds without jobs.
Job growth in "clobbered metros" was 2.2% year-over-year in March (released earlier this week), solidly ahead of national job growth of 1.7% for the same period. Among clobbered metros, Las Vegas (+3.6%), Fort Lauderdale (+3.3%), Orlando (+3.1%), and Miami (+3.1%) had especially strong year-over-year job growth, while Detroit (-0.9%) continued to lose jobs. Job growth in clobbered metros has outpaced overall U.S. job growth since mid-2011 (see chart). Year-over-year job growth in clobbered metros ran ahead of the U.S. overall until the bubble burst, then lagged the U.S. overall during the bust and recession. Employment in clobbered metros has increased 11% cumulatively from before the bubble (January 2000) to now (March 2014), compared with 5% for the U.S. overall.
Overall: a solid report for housing. Job growth in clobbered metros is especially good news for housing demand but the drop in young-adult employment is a red flag.