Federal Reserve Chairman Ben Bernanke may be about to get help boosting the economy from an industry at rock-bottom: housing. Housing starts probably will reach a three-year high of 739,000 in 2011, creating enough jobs to shave half a percentage point off the unemployment rate, said David Crowe, chief economist of the National Association of Home Builders in Washington.
Charles Lieberman, chief investment officer at Advisors Capital Management, says job growth and an increasing U.S. population mean home construction probably will improve in 2011 from its near-record low. Despite unemployment at 9.4% or higher since May 2009, the economy added 39,000 jobs in November (although 5,000 construction jobs were lost).
"The housing market is going to shock people," said Lieberman, former head of monetary analysis at the Fed Bank of New York. "Once we get the ball rolling, it becomes easy to roll. The most critical thing the Fed can do, which is not easy, is to promote job growth. If we see job growth we are going to see a very strong housing market."