80/20 Rule: Leading Indicators for Employment and Economic Recovery - Part 1

Interestingly, FOUR industries account for 45 million jobs (41% of total enterprise employment) in America; they also account for over 5 million unemployed workers or 42% of all unemployment!

They are Retail, Construction, Professional Services and Healthcare/Social Assistance.

This 80/20 Blog Part 1 of 4 focuses on Construction.  While this industry represents only 5% of total employment, in 2010 it had a 20% unemployment rate and represented over 10% of all unemployed workers with an estimated 1.4 million unemployed.

One key leading indicator is the number of permits issued for private housing per year. 

A dramatic drop in permits in 2008 and 2009 signaled a dramatic rise in the unemployment rate in this sector.  The good news is that 2012 stats are now showing a positive trend.  This will be a key indicator to watch during 2013.  If we see permits rise to the average level of the 1990's (approx 1.3 million per year), we could see the creation of 750,000 jobs, reducing the sector unemployment rate to below 10% and national unemployment rate down by over 0.5%.

Note: Statistics above based on 2010 and other US Census data