December's Job Report : Good For Home Affordability
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called "the jobs report", the government's data include raw employment figures and the Unemployment Rate.
For this month, and for the rest of 2011, employment data will figure big in mortgage markets.
7 million jobs were lost in 2008 and 2009. Fewer than one million jobs were recovered in 2010. For the economy to fully recover, analysts believe that jobs growth is paramount.
Consider how job creation influences the economy:
1. More jobs means more income and more spending
2. More spending means more business growth
3. More business growth means more job creation
It's a self-reinforcing cycle and, as business grows, the economy expands, pushing stock markets higher. This tends to lead mortgage rates higher, too, because bonds can lose their appeal when stock markets gain.
According to the government, 103,000 jobs were created in December, and October's and November's figures were revised higher by a net 50,000 jobs for a total of 153,000 new jobs created. Economists expected a net gain of 135,000.
The Unemployment rate fell to 9.4, its lowest level since mid-2009. The December jobs report was "average", and home affordability is improving.
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