Economy Watch: Apartment Vacancies, Absorption, U.S. Births Dip; Jobs Grow Moderately

Both apartment vacancies and net absorption were sluggish in the third quarter. The number of births in the country has dropped, indicating the economy as a possible cause. Job growth, on the other hand, seems to be picking up.
Courtesy of Creative Commons Flickr User Gregory Rallen

Reis Inc. reported on Wednesday that the national apartment vacancy rate was 4.6 percent during the third quarter, down a notch from 4.7 percent during the previous quarter. It was an improvement (for landlords), but the slowest quarterly downward movement of apartment vacancies since early 2010. During 2010 and ’11, vacancies were down an average of 35 basis points per quarter.

At 22,615 units, net apartment absorption was likewise sluggish in the third quarter, Reis reported. During the second quarter of this year, that total was 31,014, and during the first quarter it was 36,423. The third quarter’s net absorption turned in the lowest rate since the first quarter of 2010.

Even though absorption was a bit anemic during the third quarter, it still managed to significantly outpace the number of new units coming on line, which was 13,531, according to Reis. That might change in the coming years, however, as a largish wave of apartment units is now until construction, with delivery dates starting in 2013.

U.S. Births Drop Again 

National Center for Health Statistics reported on Wednesday that preliminary data indicates that the number of births in the United States was a bit over 3.95 million in 2011, or 1 percent fewer than in 2010. Moreover, the general fertility rate in 2011, which was 63.2 per 1,000 women aged 15 to 44, was the lowest rate ever reported for the country.

Birth rates don’t precisely follow economic distress, since other factors are at work, but there is some correlation. For instance, it’s well known that the number of U.S. births dropped precipitously during the 1930s, simultaneously with the Great Depression, but in fact the number had been already going down through much of the 1920s. Likewise, after the vast expansion of births during the prosperous late ’40s and 1950s, the numbers dropped again during the 1960s, presumably for social reasons and demographic factors, since the economy was still generally expanding until the early ’70s.

In any case, economic distress in our time seems to have had an impact on the number of U.S. births, which have dropped every year after 2007, the most recent peak. The 2011 number of births was 8.4 percent lower than during 2007.

ADP Reports Moderate Job Growth

ADP released its employment numbers on Wednesday; sometimes they jibe with the official Labor Department numbers released two days later, often not so much. In any case, the employment data specialists said that the U.S. economy’s private sector created 162,000 jobs in September. The estimated gains in previous months were revised lower: the July increase was reduced by 17,000 to 156,000, while the August increase was reduced by 12,000 to 189,000.

Wall Street ended Wednesday a bit in positive territory. The Dow Jones Industrial Average was up 12.25 points, or 0.09 percent, while the S&P 500 gained 0.36 percent and the Nasdaq advanced 0.49 percent.