While the unemployment rate rose 0.1 percentage point to 7.9%,
there are still solid gains in construction and retail employment. The
construction industry added 28,000 jobs, following a 30,000 gain in December,
which is suggesting that more homes are being built and employers are
increasing their construction crews. The retail sector added 33,000 jobs and actually
did pull back on hiring in anticipation of the increase in the payroll tax.
The
steady growth in jobs figures explain a lot. They explain why consumer spending and retail sales held up quite
well during 2012, in spite of the seemingly weak jobs numbers. They help explain why
consumers in general did a far better job keeping up with financial
obligations—from mortgages to credit cards. They help explain why more people were willing to take a plunge on
purchasing a home or buying a new car.
Buyers are starting to feel more confident, home values continue to
steadily rise and there is more optimism about the economic recovery. In end, the
financial situation of 2013 is rather bright especially in consideration of the
fiscal cliff deal. But the new tax increases for 2013 that was
worked into the fiscal cliff deal could still affect retail sales and other
measures of economic performance in coming months.
What
does this mean to the housing market? Very low inventory. Prices rising quickly and multiple
offers. This was a very unusual
real estate recession. Caused by a sudden crisis in liquidity in which
financing dried up overnight in late 2007. Now that financing is back in the market we are seeing the market
correct. It won't be long before we
reach the highs of 2006! Who would have thought prices would recover so
quickly? And interest rates are steadily rising!
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