Let's do the jobs math. In August, as in the preceding months, the number of jobs was 1.4 percent higher than last year. We're probably stuck at this growth rate which translates to 1.8 million new jobs per year.
Unemployment is at 8 percent but it rarely gets below 5 percent, so the “excess” unemployment is about 4 million. At 1.8 million per year it would take just a couple of years to put those 4 million back to work, but new people enter the workforce every day so it will probably take twice as long.
What will accelerate the recovery is construction, which has been below replacement levels as we coped with an excess 4 million homes built during the boom. We've almost absorbed that excess and there will soon be unmet demand in many local markets; home prices have bottomed out in half of the 315 markets we cover. Other construction will also increase as state and local governments spend on delayed infrastructure projects.
Low interest rates – which contributed mightily to the housing bust and financial crisis – can't create demand for housing (or for any kind of consumer spending, it's a bad policy in that regard) but they will facilitate the recovery in construction, both through low mortgage rates and low government bond financing.
The upshot will be a boost to the general economy just when it needs it. We don't want back all the three million construction-related jobs lost in the recession, that would put us back in another unsustainable boom, but a million new construction jobs over the next few years is a strong possibility.
Summing up the numbers: Jobs in August were up 1.4 percent from last year and unemployment eased down to 8.1 percent. Jobs were up 1.7 percent in manufacturing, up 2.1 percent in healthcare, up 2.5 percent at hotels and restaurants, and up 3.2 percent in business services. Retail jobs were up a sluggish half-percent and government jobs were down almost 1 percent. Retail sales through July were up 6 percent over last year, including a 9 percent increase for cars and for furniture, an 8 percent increase at bars and restaurants, and a 12 percent increase in on-line sales.