As tangible proof that the United States economy is highly dependent on the health of its housing market, a major home improvement and hardware retail chain has announced a boost in seasonal and permanent hiring. A recent corporate announcement by Lowe's indicates that the American retail giant intends to boost their staff by 45,000 seasonal employees to help them through the busy home remodeling season, which begins place in the early spring.
The announcement by Lowe's comes at a time when real estate analyst are forecasting that the housing market will continue its steady recovery for the next few months. Lowe's seasonal hiring in 2013 will be 13 percent higher than last year, and the company also plans to add 9,000 permanent employees to the payroll this year. The boost in permanent staff is geared towards busy weekday customer service, which mainly consists of independent contractors working in nearby neighborhoods.
More Jobs Please Stock Analysts
Analysts at Sanford C. Bernstein & Co. in New York recently spoke to Bloomberg news about the hiring boost announcement by Lowe's. They expect the company's stock to perform along with the market just as home improvement will rise along with the housing market. This forecast is highly dependent on low mortgage interest rates, which the Federal Reserve Bank intends to keep at record-low levels for the next few months.
The stock of rival home improvement chain Home Depot has also been the beneficiary of the rising housing market. In late January of 2012, shares of Home Depot traded around $45; nearly a year later, shares are trading around $65. Both Lowe's and Home Depot dodged a bullet last year as the dockworkers and port strike in the United States was resolved before major losses could affect the holiday shopping season.
Home Improvement Picks Up
With existing home sales expected to rise a little over seven percent this year, Lowe's and Home Depot are bound to bask in the glow of the housing market. The Harvard University Joint Center for Housing Studies estimated that home improvement expenditures will climb 11 percent in the first quarter of 2013, followed by a forecast of 17 and 20 percent in subsequent quarters. This is a strong appreciation over the nine percent increase in 2012.
By the time springtime rolls around and more residential contractors are busy working on newly-acquired homes or fixing up houses that will be sold, the U.S. home improvement industry would have seen a cash flow of about $127 billion.
