Unemployment rate helps housing:
As I have reported over the last several weeks, the housing market has officially bottomed and has started its rebound. With shrinking inventories and mild thirty year fixed rates there is only one more ingredient that is needed for housing to really move. That last ingredient is employment.
We had three employment reports that all showed some strength that surprised economists. We stared the week off with the ADP report that showed job losses in the private sector fell from -463K to -371K. We then had the Initial Jobless Claims come in at 38,000 less than previous week. Our week was rounded out by Friday’s Unemployment Rate. The report showed a rate of 9.4% which is well below the consensus estimates of 9.6%. It showed non-farm payroll declines of -247K vs. last period’s decline of -467K.
The employment sector is starting to go through what the housing industry did 3 months ago, it is still shrinking but it is building up strength and declining at slower rates. As employment strengthens, demand for housing will naturally increase even further.
