The recent Labor Department's October job report leads me to believe that a forecast that more jobs are right around the corner might seem over zealous...given our double digit unemployment rate. It also is quite optimistic given the significant NonFarm Business Sector productivity gains. Productivity increases, however, can only go so far because you can't continue to squeeze current workers to produce much more than they currently are. As has been said, you can't squeeze blood out of a turnip. Inceased productivity for the last quarter was up 4% even though hours worked was slashed by 5%. If we have any growth in the GDP we would stretch workers to the breaking point. According to the Bureau of Economic Analysis (BEA) the real growth in GDP was 2.8% with the previous quarter increase at .7%. Two consective quarters of growth is a good sign especially since the BEA reported that "The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures". It appears that the consumer is beginning to open their pocketbooks and spend again after having record rates in their personal savings rates.
In addition to the above news, inventories are being depleted at a rapid pace. Secondly, the cost of goods and services are lower due to the tremendous increase in productivity as well as the cost slashing used at many companies. Those two items with the increase in spending mean greater corporate profits which all lead to increased hiring demands by the business sector to produce the goods and services being demanded.
All of the above is not the total cure to our employment rate but it does bode well for lowering umemployment. Lower umemployment means more income coming into the pockets of employed workers, which in turn will increase GDP and increase the need for more workers. All of these factors should spell a reduced umemployment rate into next year.
More people employed means more potential consumption of real estate and the follow on services including mortgages. Hopefully it will mean that real estate agents don't have to chase the all elusive short sale as much which seems to be a difficult task given Active Rain blog posts I have read. It should also mean good business for mortgage professionals, especially the ones that are still in the business because they are IN the business and aren't here for the quick buck that was experienced in the past.
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