November Jobs Report Bodes Well for Housing Market
The November-retrospective economic reports disclosed during the start of this month were overwhelmingly positive. One of the standout statistics pointed to the unemployment rate as the lowest since 2008, with a recent CNN Money story pointing to the unemployment rate holding at a flat 7%. Economic analysts predicted the United States would add 183,000 net jobs in November, a figure that was dwarfed by the true total of 203,000.
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This is exceptionally positive news for job market skeptics, especially considering that gains in the job market were broadly distributed. As the CNN Money report further outlets, the jobs growth was balanced between low-paying sectors as well as typically high earning ones. Much worrying was directed at the inflation of job growth statistics based solely on “McJobs” – low wage or temporary jobs with little benefit fro the American public and our economy as a whole.
Taking all this into consideration, the job recovery through this point had been sluggish. While there was clearly some degree of rebound, it was occurring with far less strength than market observers would have wanted. However, the CNN Money report quotes major auditor Deloitte’s CFO as stating outright, “This was a strong, good quality report, showing continuing momentum.” The professional and business services sector yielded 35,000 new jobs alone last month, a field that is known for its high-income and, high-stability jobs.
So What Does this Mean for the Housing Market?
The echoes across the housing market will likely be positive and long lasting. Younger buyers are one of the demographics impacted most sharply by the unsteady job market. If 20 and 30-somethings are uncertain professional ground, or otherwise concerned about a financial future that might be suffer from unsteady career growth, they’re less likely to put down money for a mortgage.
If anything, the housing report spells stronger long-term benefits for the housing market than it does short-term benefits. As Deloitte CFO Frank Friedman noted about his firm’s hiring plans, “We’re optimistic about 2014, and we continue to hire at a pretty robust pace.” Assuming the job recovery maintains this brisker pace, it spells a bulwark of healthy home sales rates down the line. The upsurge in financial and professional security among young buyers will ensure the housing market’s largest untapped demographic keeps coming to the table.
Photo: Chris Hunkeler