Construction workers build a home in Palo Alto, Calif. A real turnaround seemed to take hold in the housing sector in 2012 after years of fits and starts.
The U.S. added 155,000 new jobs in December, the Labor Department reports. But California and Los Angeles County have been adding jobs at a faster rate than the country as a whole — in an important industry: construction.
Through November, California added jobs at a 1.9 percent pace and L.A. County nearly matched that, at 1.8 percent. The U.S. is adding jobs at a 1.4 percent pace, said Kimberly Ritter-Martinez of the Los Angeles County Economic Development Corporation in an interview after the national jobs report surfaced Friday morning.
For December, the U.S. added 30,000 jobs in construction. That trend could benefit California, where Ritter-Martinez said she’s seeing a looming housing shortage. She expects that a recovering housing market will be a source of growth in 2013. A number of economists and market observers already maintain that there's a housing inventory crunch in California, is driving up prices and inducing homebuilders to start nailing two-by-fours together again.
Ritter-Martinez also noted that, as the economy improves, young people finally getting jobs and moving out from their parents' homes will drive the demand for housing.
But there's a wrinkle on the jobs front. Wages aren't rising. This obviously means that consumers, over time, are going to exercise reduced purchasing power. It also means that inflation isn't likely to increase. In the U.S. it's running at about 2 percent.