Recent reports indicate the private sector’s employment rate jumped somewhat in June. The rate of employment is a major component in the resurrection of consumer spending and makes up over two-thirds of the economy. Only, approximately, 13,000 private sector jobs were added in June—a number significantly lower than in May and far below analysts’ projections.
“The data is quite concerning,” said Nomura Securities International’s economist, Zach Pandl, “…if this weaker trend in private sector employment is confirmed…it would increase the risk of weak growth in the second half of 2010.”
Unfortunately, but not surprisingly, home buyer applications fell 3.3% according to the Mortgage Bankers Association, contrary to low borrowing costs and lowered home prices. Additionally, the MBA’s report says mortgage refinancing requests increased by about 12.6%, to its highest level since May of last year.
Overall, the country’s housing market is continuing to slide, despite its action-filled spring which saw many sales, promoted by Federal tax credits. “We’re not out of the woods yet,” said an Associate Finance Professor, James Angel, from Georgetown University’s McDonough School of Business in Washington.
Spring’s numbers, across the board have clearly led analysts and economists astray; their projections, based on consistently, and often misleading, changes have been perhaps overly optimistic.
So as the number of private sector jobs decrease, the trend continues: joblessness leads to lack of home sales. And rightfully so, after all, how can our country’s economy repair itself when such obstacles prevent consumer spending to rise? Government assisted homeowner/buyer programs and signs of employment seem, generally, too fleeting. They improve markets substantially, yet are hardly consistent enough to maintain full recovery.