The latest jobs
report for February shows sign that our economy is headed in the right
direction. In February the unemployment
rate dropped to 8.9%, the lowest level in almost two years. 192,000 factory, education, construction and
professional service jobs were added to our economy. Yet, the
Our economy is
growing far too slowly to have a real impact on our job growth. Approximately, 8-million jobs were lost during
our Great Recession, which ravaged
our economy beginning in 2007 and continues, today. Our current pace of job growth has been the
slowest in all post World War II recoveries and started long after the bulk of
the stimulus package was spent.
There are still
13.7 million Americans officially unemployed, along with another 2.7 million
that stopped looking for jobs.
43.9% of those without jobs have been out of work for at least six
months. Some say that the main reason
the unemployment rate dropped last month was because the number of working age
Americans, not in the labor force, dropped by 2-million over the past year.
The good news is
the private sector added 220,000 workers in February which could be attributed
to slowness in hiring in January due to weather-related issues across the
country. Analysts aren't sure if our
economy can sustain this job growth and if we are truly recovering lost
jobs. The March jobs report should offer
a clearer picture if our economy is indeed improving.
The public sector
continues lay-offs of government employees at the state and local level as it
struggles to deal with historical cost over-runs while attempting to balance
its budgets. Many states are on the
verge of bankruptcy with limited aide going forward from the federal government
as programs expire for most states.
The real estate
sector still is dead in most
areas. Yet, the latest job report shows
a marked increase in hiring construction personnel. This is a great sign for the real estate
industry and may indicate that real estate is finally picking up after the
collapse of the banking system which sent this recession into motion. Assisted living and the multi-family rental
buildings remain the most active while the residential sector is still bleeding.
Many homes are
still "under water" as more foreclosures hit the market as the banks are eager
to dump the properties. This continues
to bring housing prices down and halts residential real estate developers from
building new projects, until the inventory of homes decreases. It's a vicious cycle that appears will take
many years to correct.
The message from
the February jobs report is that we are indeed adding jobs, but not at a pace
to dramatically decrease the high unemployment rate. Some analysts say that at least 190,000 net
jobs must be created over an 11-month period to bring the unemployment figure
to a more manageable 5%,
The question is,
"Where are those jobs being created?" In
my opinion, our job recovery relies on the housing market. As the values of real estate trend higher,
the unemployment figure will trend lower.
This will take at least another three years with 2012 starting to look
much better for both real estate and jobs.
In the interim, having a job, any job, is the best scenario to ride out
the storm. Even collecting unemployment benefits is a real plus for those still
searching for employment. We just need to hang on. The sun is coming!