Chart 1

The title of this chart is "Residential Construction Activity Accelerated in 2001 Despite Declining Employment in Some MSAs". It is a scatter plot of dots where the vertical position measures the absolute year-ago change in an MSA's nonfarm employment (in thousands) as of December, 2001, and the horizontal position indicates that MSA's absolute year-ago change in December 2001 year-to-date single-family residential permits. MSAs in the lower right-hand quadrant are those where employment was declining last year, but marginal housing supply was increasing, suggesting a potentially growing imbalance in housing supply. Atlanta is the MSA where this condition was most significant, followed by markets like Phoenix, Portland (OR), and Orlando.