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A Good Jobs Report: Good for South Lake Tahoe and all housing markets

May 8th, 2011 categories: Buyers Report, For Buyers, For Sellers, Interest Rates, Lake Tahoe Real Estate, National real estate news, South Lake Tahoe, CA, Stateline, NV

May 6, 2011 Jobs Report is a good one

With Jobs picking up steam, the South Lake Tahoe real estate market, and home values, will eventually follow.

We thought this news significant enough to let it get past its news cycle… and then review it again. The jobs report that came out last Friday was a good one, rather unexpected, and it's a continuum of reports like this that will eventually signify the return of home value growth, not only in South Lake Tahoe, but in all housing markets.

There were lots of different reports throughout the media on Friday, but there was only one set of facts. We're providing you to three of the reports here, and we'll look at one in particular.

CNN logo The article we thought most persuasive was a CNN news analysis entitled, "Jobs Matter, Employment Rate Doesn't" (here). Here are some of the key bullet points:

Ignore the unemployment rate, and ignore anything you read that highlights the fact that it increased from 8.8% in March to 9% in April. It doesn't matter. It's an irrelevant number.

There are more than 9% people unemployed: the rate would actually be much higher if all of them were counted– more like 16% or 17%.

This uptick to 9% shows that more people are returning to the work force. Some of these are those who have given up looking for work are not counted in the official unemployment rate. 113,000 people who weren't counted as unemployed in March jumped back into the labor force in April.

The only number that matters is the number of jobs created – 244K in April; WAY more than the most optimistic economists were hoping, and within striking distance of the threshold number of 300,000 news jobs the economy needs to be creating per month to get back down to the 5% unemployment rate before the recession.

We also saw the jobs-created numbers for February and March revised higher. April's gains aren't some kind of blip– they are spread across a broad range of industries: retail, business and professional services, health care, manufacturing.

Bottom line: April's jobs report is a good, solid one. The job gains still may not be enough to lower the unemployment rate, especially as we see more people try to find jobs. But it shows the economy is moving in the right direction, and hiring is gaining meaningful momentum.

In summary, It is that magic 300,000 jobs per month that we're looking for. What that starts to happen, it will not be long before interest rates go up, which will mark the inevitable ascent toward higher home prices and an eventual sellers market. In other words, home buyers do pay attention now.

Another article we read about this was, "Businesses Now Hiring at Fastest Pace Since 2006" (here).