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Jobs recovery spreading to more industries

8:44 AM, Mar 9, 2013   |    comments
(Photo: Jack Gruber, USA TODAY)
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Paul Davidson, USA TODAY

The jobs recovery is broadening as the housing revival and rising consumer wealth begin to lift an array of industries, from mortgage lending to charities.

The spread of employment gains to previously lagging industries makes for a more sustainable recovery that's less vulnerable to unforeseen events that could hobble certain sectors, says Wells Fargo economist Mark Vitner.

The development also helps reduce long-term unemployment by providing spots to long-idled workers in beleaguered industries, such as construction, says economist Chris Lafakis of Moody's Analytics. The share of unemployed Americans out of work at least six months was still high in January at 38.1%, but it was down from 43% a year earlier.

Job growth is still not booming. It has accelerated the past two years, but hasn't been strong enough to quickly bring down the 7.9% unemployment rate, which has been stuck near 8% since August. Economists estimate the Labor Department will report Friday that employers added 160,000 jobs in February and that the unemployment rate remained 7.9%.

Still, the housing upturn is expected to help offset $85 billion in federal budget cuts that could slow economic growth this year and reduce job gains by about 400,000.

Housing starts are expected to approach 1 million this year, up from 781,000 in 2012 and 612,000 in 2011, IHS Global Insight says. Existing home sales also have risen sharply.

The turnaround has helped boost construction payrolls by about 200,000 the past two years, but it's also rippling to sectors that benefit directly from an improved housing market. Kitchen cabinet and other wood product manufacturers, for example, increased payrolls by 9,000 the past year to 344,000 after years of layoffs.

Employment at sawmills similarly rose. Weyerhaeuser, the giant forest products company, added several hundred workers at its sawmills in late 2012 for the first time in several years amid the pickup in housing construction.

Staffing at furniture stores climbed last year for the first time since 2006. The Badcock furniture chain last year opened 12 new corporate-owned stores in the Southeast that employ 60 workers, its first significant expansion since the housing crash.

"We want to be positioned to capture the upside," says company Chairman Wogan Badcock III, noting that new homeowners typically spend about $10,000 on furnishings and other products.

Architectural firms and mortgage brokerages also saw job gains in 2012 after years of stagnation. After cutting its staff from 30 to six after the downturn, Urban Studio Architects of Tampa hired an architect and a marketing employee the past 18 months to handle new multifamily construction, says owner Mickey Jacob.

And the 400-employee Premier Nationwide Lending of Flower Mound, Texas, hired 50 workers last year and plans to add another 50 to 100 in 2013. Low interest rates, stronger job growth and rising home values are prompting more home sales, says area manager John Hudson.

Other lagging industries have just started to grow or, according to Moody's, are expected to the next few years:

• Rising consumer wealth lifted payrolls at charities and foundations last year for the first time since 2009. Their staffs are projected to increase another 13.8% by 2015.

• Higher office employment is poised to jump-start hiring in a variety of sectors, from janitorial services to call centers.

• A better advertising market should fuel solid job gains at TV and radio stations.

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