You should never get too worked up about one months’ worth of anomalous economic statistics since there are always sample errors and other statistical noise to worry about, but the divergence between new housing starts and residential construction employment looks to have been going on for months now. In the chart above, the blue line is new starts of housing projects—an index that’s clearly ticked well up over the past six months. The red line is employment in residential construction, which has been flat or even falling.
So what’s going on? Is something being mis-measured? Is the construction industry experiencing a productivity boom? Are hours per worker surging but firms aren’t adding staff for some reason?
