DOUBLE-DIGIT UNEMPLOYMENT RATE – Is It On The Way Down?
DOUBLE-DIGIT UNEMPLOYMENT RATE – Is It On The Way Down?
NATIONWIDE JOBLESS RATE FALLS TO 10.0% IN NOVEMBER – IL CHICAGO UNEMPLOYMENT HIGHER THAN NATIONAL AVERAGE!
There is an old saying in Real Estate –
"If people are fearful on Friday that they might not still have their job come Monday they are not going house hunting over the weekend."
For the real estate market in Chicago and elsewhere across the U.S. many practitioners and industry analysis ts feel continued high unemployment has dampened chances for a quick housing market recovery.
Here in the Chicago Area home prices in many Chicago Neighborhoods and Suburbs have fallen 20% or more over the last 24 months fueled by staggering numbers of short sale properties and bank-owned foreclosures. Mortgage Interest Rates hug historic lows – often less than 5% for a 30-Year Fixed Rate Loan for many borrowers.
But again if you fear for your job your hand is not likely to reach for such a long-term purchase as a new or larger resale home.
According to data released last week by the U.S. Labor Department and as reported in today’s Wall Street Journal by Reporters Kelly Evans Justin Lahart and Naftaly Bendavid the U.S. Unemployment Rate fell to 10.0% in November down 0.2% from the previous month. In November the department estimates that fewer than 11000 jobs were lost across the country last month. That’s the lowest rate of monthly job losses since the beginning of the current recession two years ago.
The latest Unemployment Rates for the Chicago Area (10.3%) and Illinois Statewide (10.5%) – both October figures – still eclipse the U.S. Average.
Revisions to previously-released September and October unemployment figures show the U.S. lost an estimated 159000 fewer jobs during this two month period than previously calculated.
Although it appears as if workers across the U.S. are still losing their jobs layoffs last month fell reducing the U.S. Unemployment Rate off its lofty 10.2% October number – the highest level of unemployment in 26 years.
Some economists including MF Global Chief Economist John O’Sullivan are hesitant to predict a new downward trend in unemployment. He still expects U.S. Unemployment to peak at 10.5% during the First Quarter 2010.
Although stronger employment figures could bode well for housing market improvement they open up another more frightening possibility. An economic turnaround might hasten the day when the Federal Reserve Board fearful of the return of inflation begins to consider increasing interest rates.
And if interest rates start to rise despite a stronger economy and fewer job losses will they lessen traction in a housing market recovery?
See Jon Hilsenrath’s article also in today’s Journal for a bit of caution.
DEAN MOSS & DEAN’S TEAM CHICAGO
