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As expected, the employment report for November revised away some of the hurricane-related weakness in September and October and revealed good forward momentum in November. Nonfarm payroll employment rose by 215,000, above the average for the first eight months of the year, and the unemployment rate held at 5.0% — compared with an expansion low of 4.9% in August.

NAHB’s forecast shows healthy growth in payroll employment through 2006, and we expect the unemployment rate to tick down a bit as GDP growth runs a bit above potential for at least part of the year. Growth of both GDP and employment should settle to trend in 2007, holding the unemployment rate around 5%.

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