Make it week number three in a row that we have very strong economic data pointing to economic recovery. I know you are reading this and saying, “Huh…Recovery, What Recovery?” Here’s the deal, outside of modest employment improvement, there are signs everywhere that the economy is rebounding. Now you are probably asking yourself “how can we have improvement when un-employment is still so high?”…“The answer is simple my dear Watson”.

Technology is advancing so rapidly that the need to hire back people into the same positions simply does not exist. The great recession of the 2000’s taught major corporations and small business owners how to leverage technology. In addition, I am sure that you have also noticed that employees are being required to do more for the same money. Just as our parents that lived through the Great Depression learned how to save money, today those of us that lived through the Great Recession have learned how to maximize resources and technology.

As far as proof that the economy is improving for real, let’s take a look at the data that has been coming out for the last 3 weeks.

Housing data has been improving in that we have seen increases in Existing Home Sales, New Home Sales, Pending Home Sales, and New Construction.
Manufacturing has increased for the last 3 months and the demand for goods and services continues to rise.
Consumer Confidence is at its highest point all year.
Retail Sales have been increasing for 3 months straight.
Sales on Black Friday, as well as Cyber Monday set all time records. Not only did they break records, they blew through every analyst’s expectations.
Many major companies are showing increasing profits and sales.

As you can see there are many things improving in the economy. It may not feel like that to the average consumer but the data does not lie. Also remember the media focuses on reporting the negative, so no matter how much things are improving, negative headlines will always dominate the broadcasts which keeps us feeling that things are not getting better.

If you own a home, or are thinking about purchasing a home, right now I can’t tell you what is happening with home values because this week we have two reports on home values that contradict each other. The S&P Case-Shiller Home Value Index reported that home prices dipped another .6% in September for 20 major metropolitan areas. On the flip side, the Federal Housing Finance Agency reported that home values increased .9% during that same period. (In poker terms, I will call this a “push”)

National Unemployment for the month of November dropped a much larger than expected .4%, down to 8.6%. Although this is great news, the numbers don’t reflect the real picture. There are two reasons why unemployment dropped, the first being that the economy added 120,000 jobs in the month of November. The second reason is that the overall size of the workforce decreased which makes the increase in jobs have a more dramatic impact on the percentage of change. Regardless, employment has improved and this news is a great shot in the arm for the psychology of the country.

Your Mortgage Consultant,

JJ Mack
916-517-1800