The latest data on housing starts shows that there is an (well expected and even overdue) slump in housing starts. While the total number of new housing permits fell by 6.5%, the West is hit hard – the decrease of 12.4%.

12% less of new homes that are going to be build means that 12% of construction workers, and good % of associated folks like real estate agents, mortgage brokers and related industries factory workers will be laid off.

According to calculated risk there are 3.3 million residential construction workers. My careful and educated guess will be that 20% will be let go in the next 3 months, or about 25k people per week. Last new claims figure was at 315k lost jobs per week. Expect the number to bounce to 340k by mid-September. Just mark my words and see if I’m right.

And this is the vicious circle, as laid-off people will have to sell their houses and depress prices, which, in its turn, will decrease housing starts even further. Our checkpoint is September 1st, when the unemployment rate and construction spending will be released.

Thanks Greenspan and Republicans for our tax cuts!