Housing Turn Key to Employment, Buffett Says

New York, NY, July 8, 2011 -- A housing recovery is the key to increasing employment significantly in the U.S., businessman Warren Buffett told Bloomberg News.

Buffett said he believes there's a good chance that the economy could create more than 2 million jobs by the end of next year if housing construction picks up, which he called the key to the overall employment picture.

That turnaround could begin soon, he said.

"We will come back big time on employment once residential construction comes back," Buffett said. That will impact everything from companies like his Shaw Industries to transporation companies.

He predicted that unemployment could fall to around 6% once the housing market begins growing significantly, but he also noted that he couldn't predict when housing will turn around. Too many houses were built in the last boom, and it's going to take some time to absorb the overhang.

Buffett said that while homebuilding is still slow, household formation has been exceeding the availability of new housing for quite some time and eventually it is going to create significant demand for housing overall.

Ultimately, he said, the overall economy will begin growing once businesses see demand for their products and services.

Related Topics:Shaw Industries Group, Inc.