Housing Slump Has Adverse Effect On Employment Sector
Another sector that had suffered a major impact due to the current housing slump is the employment sector. According to a government report released, only 88,000 jobs have been created by the economy in April 2007. This is the slowest rate at which jobs have been created in the last two years. According to this report, the unemployment rate has increased by 4.5 percent due to unavailability of jobs and sluggish business growth.
The biggest sufferer of this has been the manufacturing and construction sector that has lost around 29,000 jobs. According to Mark Zandi, chief economist at Moody’s.com, the job market in the real estate sector was reasonably good till recently. All the real estate contractors and agents are patiently awaiting an upward trend in the market. According to Zandi, many of these people have reaped huge amounts of money while the market was experiencing a boom time and are now unwilling to depart.
Several homebuilders and economists including Mark Vitner, who is a senior economist at a Wachovia Corp., believe that the housing slump would continue for another year, until 2008, without showing any signs of recovery.
According to the government report, the average increase in the workers’ wages has also been minimal. This might have a negative and indirect effect on the job market in future. This is due to the fact that there is a slight chance of shift in the future job market only if the U.S. consumers continue to spend. But lower increase in wages has resulted in lower spending. Apart from the manufacturing and construction sectors, other important sectors that have experienced significant job losses include healthcare, education, leisure and hospitality and various government services.
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