Pretty Colors – Do they tell a story about one major cause of unemployment?


Since 1971, unemployment downturns have ALWAYS reversed when the new housing market reversed and moved upward.

That was not true prior to 1971 but we changed many things in that year … and chances are (minus available data) that this relationship was probably true prior to 1971 as well although manufacturing played a very major role in your weekly paycheck — back when things were Made in America.

USA Housing and Employment Relationship
Jobs and Housing
Chart: www.CalculatedRiskBlog.com

Reality Check: the Ownership Society is kaput. The middle class is broke. This trend has been in a gradual downward spiral since 1980 when real annual income growth for the lower middle class stalled. It has remained stalled ever since. Still, the middle class was healthy enough and fluid enough that it still thrived as long as there were jobs. That too stalled in the late 1990s when the percentage of eligible Americans employed began constantly and steadily decreasing every year since 1998.

The Question: Do we need to build more houses? Haven’t we really been trading up for almost 40 years … and now we need to trade down? Maybe? If so then … bad news … or can we turn the question and ask ‘what else could we build (or replace)?’.

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2 Comments

Filed under Economic Recovery, Economics

2 responses to “Pretty Colors – Do they tell a story about one major cause of unemployment?

  1. George S. Harris

    Gee, I just read a report that linkedthe downturn in unemployment to the death of honey bees (no citation). And there may well be a corrrelation between the increase in the death of bats due to white nose syndrome and unemployment–again no citation. I can think of a several other things that might be the cause–off shoring of our manufacturing base, changes in technical knowledge requirements, raising the experience bar–you just ran an advert for a job that wanted TEN years experience to be eligible for consideration. This is happening all over I suspect–plumbers must have 15 years experience and hold a master’s ticket for an entry level job, same with roofers, carpenters, framers, auto assembly line personnel and it just may be that eventually McDonald’s will require 10 years experience flipping burgers to qualify for the midnight to 8 shift as the potato frier and then you can work up to putting the mustard and ketchup on the basic $0.99 hamburger–maybe.

    • And then there is the WTOP story that squirrels and deer are also having a hard time of it.

      Seems that too much rain retards the availability of acorn production. Now we are being warned to expect more squirrels and deer darting across the roadways in search of their next meal.

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