What is the difference?

Do you need or want a job?

OR

Do you need or want work?

The Washington DC beltway politicians are again using unemployment numbers, rates and stories to gain political leverage with voters. It is interesting to me that the unemployment rate can decrease from 9.0 to 8.6% by creating only 140,000 new jobs. Yes, I know they are reporting that 310,000 people stopped looking for jobs and thus are no longer counted in the unemployment rate.

The drop in the unemployment rate is good but it doesn’t at all signify the economy is getting better. I think we need to focus on work rather than jobs!!

There is ONLY 64% participation in the labor force.

50% of all corporate profits are from overseas business – how will this work out in 2012?

There are jobs out there!
But very little work!

Let’s get ready to generate some work in 2012!

Statistics, Politics and Reality

As per the Bureau of Labor Statistics: (in thousands)

                                                Dec 2009                          Dec 2010                               Nov 2011

Civilian Labor Force                154,142                            153,889                                  153,683

Employed                                139,877                            139,064                                  140,070

Unemployment Rate                   9.3%                                9.8%                                       8.6%

Unemployed                             14,265                             14,825                                     12,613

Not in Labor Force                  81,659                              83,941                                    86,757

I am not a statistician but the reality from Dec 2009 to Nov 2011 seems to me:

1. the total civilian labor force is about the same
2. the number of employed people is about the same
3. the total number of the unemployed has decreased and thus the unemployment rate looks great or at least the trend is in the right direction,
4. the total number NOT in the labor force has increased by about 5,000,000 people. This is over a 6% increase over the past two years.

You have to be the judge on the trend of the economy.

Is the “spin” that the unemployment rate is trending down and that is a good sign the economy is improving?

OR

Is the ‘spin” that the number of people leaving the workforce is trending up because there is no work?

Peak of the Week

Welcome to the Peak of the Week -- a Wednesday when we look back at housing price trends and peek forward to what changes may be in store for housing prices. Remember, this is a national overview by the leading expert in tracking housing prices. Your local market may very well be different than the national trend and even different than your closest MSA (Metropolitan Statistical Area).

The two graphs basically tell me that most of the experts have no clue what is going on TODAY let alone forcast into the future. In the past year (August 2010 - 2011), the starting price level dropped about $7,000 (jsut over 4% reduction in price) and the projected bottom has been exetended out 6 months. This seems consistent with everything that I have read on the housing price problem.

The leading expert in the field is projecting August 2011 price levels to be reached again in about 2-years!!
Until the economy recovers hand in hand with housing, you must prepare for the worst and pray for the best.

As I have said many times ----- AS Housing Goes.........SO Goes the Economy!
What does this mean to YOU?

Revisiting Congress

I posted the following on August 4, 2011:

Do You Know How Much Members of Congress Earn?


I guess there would be a debate on if they earn their salary but they do get paid!
In 1991, their annual salary was $101,900
In 2011, their annual salary is $174,000

In today’s Congress nearly 50% of all senators and representatives are MILLIONAIRES.

No wonder they are out of touch with US.
At a salary of $174,000 per year, they would be paid $14,500 per month.
In reviewing the congressional calendar for August – December, 2011, they will be in session 44 days.

$14,500 x 5 months = $72,500
$72,500 / 44 days = $1,647 per day
$1,647 / 8 hours = $205 per hour --- this is salary only and does not include benefits.

Some members in Congress are worth their salary and some are not. At least we have a chance to decide on who should stay and who should go by voting! Regardless, we should demand term limits.
 
Now we know how how congressmen obtain their wealth ---- "insider trading".
Illegal beyond the Capitol doors but legal for our elected officials.
Unethical beyond the Capitol doors but ethical within the halls of Congress.
 
WAKE UP AMERICA --- the double standard is with our elected officials.
Read --- "Throw Them All Out"

Consumer Confidence will Turn Around WHEN?

Our economy is based on 70% consumer spending. If the consumer lacks confidence, our economy will only limp along. As you know, many of the sectors of our economy are improving but the most important, housing, continues to be problematic. Certainly, the financial industry is approaching housing with a ten foot pole. The pendulum swings again. Lending is an important component of housing but in the marketplace FEAR is the overriding factor:

Fear of the buying process – not understanding how the system works


Fear of losing their job and/or the lack of job security

Fear of their ability to make monthly payments

Fear of being “house poor”

Fear of the daunting loan process

Fear of qualifying and credit scores

By combining consumer fear in housing with the total lack of consumer confidence and you have an economic problem. What do we need from the government to solve these problems?
Government policies? Government Regulations? or Leadership?
We need leadership to instill confidence in the American Dream -- we can do anything!

Housing - Pent-Up Demand & Lack of Supply -- Really?

I have shown the above graph in other forms but this illustration clearly shows the over building that happened during the real estate "bubble". It also clearly shows the lack of new housing construction required to meet demand. A demand caused the increase in population and family formations. Due to the economic conditions, less families are being formed and home buyers are delaying decisions. All of which results in a pent-up demand. I really thought it would be 2012 because a Presidential election cycle was enough of an incentive to make something happen with the economy.

The "experts" say the economy is improving but slowly. That is a good thing. However, we the people will not feel good about making a home buying decision until the 'fear' has been replaced with optimism. In my opinion, single family housing starts will remain below the 1,400,000 housing starts requirement to keep pace with the housing NEED through 2012 and well into 2013.

Knowing the construction cycle, financing, and sales -- follow this line of thought.
November 2012 - elections
Holiday and Winter months follow when construction is typically slow
Spring 2013 --- New optimism and Hope!
We start to buy!!!!!!!!!
Builders may be ready to build but spec building will still not be permitting by lenders -- thus a housing start will not occur until the loan is approved for the buyer and for the construction loan for the builder

• Construction will start in early summer 2013 - assuming the workforce is available and the builder has lots to build on.
• First closings will be in late summer 2013.
• Because of the lack of supply and the pent-up demand, prices will escalate rapidly.
• Interest rates will rise and monthly costs will increase.

Plan for the worst ( is this the worst case? ) I don't think so! Let's pray for the best and I think this is the best case scenario.
What are your thoughts?