On the downside, construction jobs decreased 35,000 and that signals an even deeper problem.
Part of the $787 billion stimulus was a program offering an $8,000 tax credit to new home buyers. The program ended April 30 and new home sales dropped abruptly to the lowest levels in 40 years.
“The tax credit expired as the peak home-buying season kicked off,” said Mark Vitner, senior economist at Wells Fargo Securities. “Imagine what would happen to retail sales if they canceled Christmas.”
The backlog of unsold new homes is 210,000 which is a drain on market values and only perpetuates the drop in new construction jobs.