Last week initial jobless applications in the U.S. increased to 480,000 and those receiving extended benefits increased by about 242,000 (4%). Luckily the headline U.S. unemployment rate dropped to 9.7% in January.
∙ Perhaps At Some Point The “Unexpected” Shouldn’t Be Quite So [SocketSite]
∙ Unemployment Rate Unexpectedly Declines to 9.7% [Bloomberg]
Isn’t it wonderful that we can get the unemployment rate to go down just by not counting the jobless as unemployed?
“All the other Government BS aside, the real unemployment rate, known as the U-6, which is the one that includes discouraged workers and those underemployed who could only get part time work, rose from 17.1% to 18% in January.”
http://wallstreetexaminer.com/2010/02/05/the-real-unemployment-rate-3/
“Things are getting worse more slowly,” noted former Secretary of Labor Robert Reich when he returned to The Commonwealth Club in January to give its Bank of America Walter E. Hoadley Annual Economic Forecast.
The unemployment situation is not improving, and the stock market bounce of 2009 has ended, and reversed. This may prompt an extension of the home buyer credits, but regardless, the housing price decline in SF will accelerate again in 2010 as the 2009 lull is over. Look for continuing declines in sales volume and prices.
More smoke and mirrors from that Jack A*S!
I believe the explanation for the drop in the unemployment number is because of the ‘household survey’ which would count those individuals who have started small businesses out of their home as employed, where as the job lost number counts the decline in payroll at business across the US and would not capture many startup businesses.
Also, the U6 number, which is of course much higher then the official ‘unemployment’ number also declines several tenths.
Add to that that they avg hours worked increased again, overtime is increasing, temp hiring as increased for 4 straight months, and wages increased. The numbers are overall pretty positive.
Reading the analysis of how these numbers are calculated (and all of the seasonal adjustments and plug numbers), and knowing the history of revisions several months down the line after every report like this, I think it’s fair to say that things pretty much suck as much this month as last month.
For those of us like me who are waiting out this Recession for 2-3 years in hopes of renting out at a later date…
Can someone help me with this question:
Should I use these 2-3 years to improve my building to make it more desirable for renters?
I have the opportunity to transform my 2/1 into a 2/2 — would also greatly enhance the quality of both bathrooms.
Total project will be about $30,000 all-in.
How much will something like this increase my monthly rent potential (and ultimate re-sell costs)?
Should I pull the trigger on this project later this year, given that 9.7% unemployment means that construction and contractor costs are low?
NewBuyer,
Don’t count on that last statement, construction costs are not down, nor material costs. Plus permitting continues to skyrocket.
I agree with BDB – this is generally positive. SF Jack, your source (the “Wall Stret Examiner”) is also wrong. U6 unemployment was down 80 bps since last month. My guess is that they were using seasonally unadjusted numbers, which is misleading, but I guess it’s to be expected on blogs like that. Anyways, this is an improvement, but it needs to continue that trend before you can make any conclusions.
Is that true about construction costs, sparky-b? I work on big public sector civil projects, and those bids are coming in at an unbelieveable 30% discount to engineers estimates. I assumed something similar was happening in the residential market. I have to assume that folks are willing to take something of a haircut on their hourly rates to keep working….
^^ I’m curious about who’s right on the cost thing. Like curmudgeon, I work in the commercial construction industry. Although commodity/material prices have not come down much, our bids from subcontractors have been coming in about 15% less than ’08 numbers. sparky-b is much more in tune with the residential and remodel market – so maybe those costs are not declining.
“I think it’s fair to say that things pretty much suck as much this month as last month.”
You do realize that is now consider good news after the last year and half. Seriously, just not sucking more then the previous month is a reason to celebrate!
I find myself calling up subs when I get their bids and opening with, “You have got to be kidding me with this price don’t you know the economy sucks”.
Residential and Commercial are totally different animals. On the Res. front, the out of work GC’s and subs are the people who are new to the business or did lots of work for big landlords, or switched jobs all the time looking for the biggest paycheck (to commercial often). Good people are busy and have been busy, the amount of work expanded over the last 5 years but not like commercial did. So the contraction has been smaller.
In commercial there has been so much work for so long that lots of companies continued to expand and new companies came in and had tons of work. Then the work totally dried up. That is putting a lot more pressure on good companies to compete at lower rates. This is true of their subs as well and down the line (again not the case in Res.)
@NewBuyer:
Are you seriously going to wait out 3 years and not rent your places? For 1 2/1 that is ave $2400/month, 3 years at $86,000 out the window. I just don’t see how that math adds up any way you look at it.
Contact me if you want me to give you a more specific evaluation.
Lance:
“… blogs like that..”
… are pretty useful.
“All the other Government BS aside…”
… means no seasonal adjustment for either the December (17.1%) or January (18.0%) figure.