UNEMPLOYMENT NUMBERS CONTINUE TO HURT HOUSING

By
Real Estate Mortgage Broker with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“Unemployment Numbers Continue to Hurt Housing”

 

A lot is being made of the drop in the unemployment rate to 8.1%. One of the speakers at the DNC made a great point. He said it is all about the arithmetic, brilliant!

 

WorkforceWe add 96,000 to the fortunately employed list and the unemployment rate drops to 8.1%, now that is good? Here is the problem with the arithmetic, over 300,000 left the work force or stopped looking for work. It continues to be widely agreed upon that the true unemployment rate is closer to 16% or double of what is being reported.

 

23 million out of work and we added 96 thousand jobs and we’re being told, by President Obama, he needs more time. I wonder how many of the 23 million will actually say OK to 4 more years?

 

 

Unemployment Drops to 8.1% as Economy Adds Just 96K Jobs

BY: Mark Lieberman, Five Star Institute Economist

The nation’s unemployment rate fell to 8.1 percent in August – the lowest level since April but the economy added just 96,000 jobs, the Labor Department reported Friday.

 

According to Labor, 581,000 people left the labor force in August leading to the drop in the unemployment rate which nonetheless remained above the election-critical 8.0 percent. At the same time, July’s job gains – originally reported at 163,000 – were reduced to 141,000 while June’s job numbers dropped to 45,000 from 87,000.

Within the “household survey” the labor force participation rate, which tracks the labor force as a percentage of all those over 16, and thus is a measure of confidence in the ability to find work fell to 63.5 percent, the lowest level since September 1981.

Economists expected payrolls to grow by 125,000 and the unemployment rate to remain at 8.3 percent.

Average weekly hours remained at 34.4 consistent with July’s revised number but hourly earnings rose for all workers fell to $23.52 from $23.53 adding pressure on household incomes.

With today’s report, the unemployment rate remained above 8.0 percent for the 43rd consecutive month – the entire Obama Administration – though it has dropped from its cycle peak of 10.1 percent in October 2009.

The weak payroll gains were consistent with a slowdown in corporate profits. The Bureau of Economic Analysis reported last week corporate profits rose just 0.5 percent in the second quarter, a poor performance which has not been followed by slow increases in payrolls.

The impact of the payroll gains in the last two months was muted further by an increase in the number of individuals holding two or more jobs: up 152,000 in the last two months, 64 percent of the 237,000 increase in the number of jobs.

As a result, the number of individuals classifying themselves as “employed” in the household survey taken for this Employment Situation report fell a combined 314,000 in the last two months even with an increase in jobs.

The number of persons unemployed fell 250,000 in August to 12,544,000, the lowest level since April, but the number of people employed dropped as well, by 119,000 to 142,101,000, the second consecutive month-month drop and the fourth decline in the last six months.

While the increase in the unemployment rate was encouraging, it was more a function of arithmetic than any improvement in the economy with the decline in the total labor force which is the sum of person employed and unemployed.

To be unemployed an individual over the age of 16 has to meet three tests: out-of-work, available-for-work and looking-for-work.

The unemployment rate is the result of dividing those unemployed by the total labor force if unemployment goes down – as it did in August by 250,000 – and the labor force drops, the resulting unemployment rate will also fall.

An alternative measure showed more strain in the labor sector.

The employment-population ratio which measures the number of people employed against the entire over-16 population, without qualifying definitions used to determine “unemployment” dropped to 58.3 percent.

The inverse of the ratio – 41.7 percent – represents the share of the over-16 population without jobs. At the onset of the recession in December 2007, the employment-population ratio was 62.7 percent and when the recession officially ended in June 2009 it was 59.4 percent.

Another widely followed alternative measure of employment which includes discouraged workers and others “marginally attached to the labor force” fell to 14.7 percent in August from 15.0 percent in July, again a function of a declining labor force..

Despite the one encouraging sign in the report, other indicators were disappointing. The average duration of unemployment rose to 39.2 weeks in August from 38.3 in July, the third increase in the last four months.

The weak jobs picture touched all sectors of the economy. Manufacturing jobs, for example, fell 15,000 in August and July’s gain of 25,000 was revised downward to 23,000. Within the manufacturing sector though, the auto industry shed 7,500 jobs in August.

While professional and business services added 28,000 jobs in August, the gain was far below the 47,000 jobs added in July and the number of new temporary jobs actually fell 4,900 in August after growing 6,900 in July.

Temp jobs are often considered a gateway into permanent employment but also reflect a lack of confidence by employers who are reluctant to make a permanent addition to payrolls.

The sector showing the strongest job growth – 34,000 jobs — was leisure and hospitality, the sector with the lowest average weekly earnings: $348.40 compared with an average of $809.09 for all private sector jobs.

Despite a quarter-quarter 2.7 percent decline in profits, the F.I.R.E. (finance, insurance and real estate) sector added 7,000 jobs August, more than reversing the 2,000 jobs cut in that sector in July.

Within the financial sector, the number of real estate jobs fell 5,200 and the number of underwriting jobs dropped 1,100 in August.

While total construction employment nudged up a net 1,000 in August, residential construction jobs fell 1,100 and non-residential building construction jobs fell 2,400.

Gains though were registered in residential specialty contractor positions with 8,200 new jobs in August.

The number of government jobs – which has long been a drag on the employment picture – fell another 7,000 in August after dropping 21,000 in July. State and local government payrolls fell a combined 10,000 while federal payrolls rose 3,000.

According to the report, there were 2.8 million federal workers in August compared with 14.1 million local government jobs and just over 5 million state government jobs.

Since the onset of the recession in December 2007, government payrolls are down a net 476,000 with most of the cuts at the state and local level.

The payroll report was also affected – positively – by a strike of utility workers in New York City.

Those workers returned to work in August, boosting utility jobs by almost 9,000, reversing a similarly sized decline in July.

Jobs are only included in the payroll report if positions are paid during the week of the month including the 12th calendar day of the month. The 9,000 striking Con Edison workers were not on the payroll during the July survey period.

 image: jscreationzs/freedigitalphotos.net

Posted by

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

Like me on facebookfollow me on twitterConnect with me on linkedin

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the magnifying-glass to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
ActiveRain Community
Location:
Connecticut
Groups:
Wake Up Brokers
Connecticut Professionals
LOAN OFFICERS WHO AREA SERIOUS ABOUT MAKING MORE MONEY
Consumer Mortgage Tips
All About Mortgages/Mortgage Networking
Tags:
jobs
labor department
housing
president obama
unemployment

Comments 3 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the man to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Ambassador
2,279,924
Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

But, but, but, Joe. . . .

Folks LIKE him.

I don't believe any of the polls.  The polls are all designed to show the results we are given.

September 14, 2012 06:07 AM
Rainmaker
1,294,048
Roger D. Mucci
Lets shake things up at your home today!
Shaken...with a Twist 216.633.2092

I've been out of work since last November, apply for at least two jobs a week, most of which pay less than half of what I was making and I still can't find a job.

September 14, 2012 07:57 AM
Rainmaker
523,817
Patricia Feager, MBA, GRI, Cert Negotiations Expert, Military Relo Prof
The Little REALTOR® That Could
Keller Williams Realty

Joe,

Numbers are manipulated just like people. The job situation stinks. People who have been unemployed for years are no longer counted.

Have you ever seen or heard of a homeless politician? I didn't think so. Neither did I. And I was foolish enought to think politicians serve the people. Ha! They are all living good lives and have jobs! Government jobs!

September 16, 2012 10:48 AM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tshirt to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
782,223

Joe Petrowsky

Your Mortgage Consultant for Life
What mortgage questions can I answer for you
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the folder to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: