Tuesday, November 19, 2013

November 19, 2013 Real Estate Report - Maybe It's Not a Fluke

Maybe It's Not a Fluke Two weeks ago we published a column entitled "Words of Optimism." Last week a surprisingly strong employment report was released. Was this a coincidence or was it an accurate prognostication? We do know that the jobs data can be tricky. What looks strong one month can be reversed the next month as the new month's data is always accompanied by revisions of previous numbers. Thus, we would need to see two or three months of strong jobs reports before we declare a turnaround and a great prediction (or a lucky guess). On the other hand, the words of optimism were based in fact and those facts included the important numbers regarding increased household formulation. As a matter of fact, household formulation and jobs data are clearly linked. As more jobs are created, more households are created as children move out on their own. This demand for housing -- both rental and purchase -- creates more jobs. This relationship created a vicious cycle during the recession. Today it could influence the start of a virtuous cycle in which the economy is buoyed by both factors working together. Again, our thoughts are not just the result of rampant speculation. A recent report by the Federal Reserve Board indicated that the employment rate was set to fall in the coming months -- "Across the board, these indicators show the pace of the labor market recovery has increased compared with a year ago," wrote Mary Daly, the San Francisco Fed's deputy research director, and colleagues Bart Hobijn and Benjamin Bradshaw. "We take this as evidence that the recovery in the labor market is robust, broad-based, and likely to continue, if not accelerate, over the coming months." (Reuters). So, perhaps the surprising jobs report was not a fluke. But we still need to see a few more months of data to really determine if this is the case. Keith Stewart 773-529-7000

Tuesday, November 12, 2013

November 12, 2013 Real Estate Report - Employment Report

Employment Report A busy week included both an Election Day and a release on the employment numbers for October, as well as numerous additional points of data. The employment report was surprising to say the least with the markets assuming that the government shutdown would have held a lid on hiring during the month while government workers were furloughed. Not only was the addition of over 200,000 jobs more than expected last month, but the previous months' data was adjusted higher as well. Economic data measuring activity in the manufacturing and service sectors also exceeded expectations. This strong data is important with regard to influencing measures of consumer sentiment which had turned lower during the month as the shutdown drama unfolded. From here, stronger consumer sentiment is critical. Why? Because it is shopping season. November is the start of the Holiday Season and market analysts will be at the malls more frequently. Perhaps they will be doing some shopping, but more than likely they will be measuring early data regarding how busy the shopping season will be. Each year, store traffic becomes less important because so many are shopping on line. We are approaching both Black Friday and Cyber Monday in a few weeks. Though the word is that many stores will be open on Thanksgiving Day and perhaps Black Friday will become Black Thanksgiving Weekend. Certainly on-line shopping is open on Turkey Day so why not the stores? Well, those who have to work Thanksgiving Day certainly will not be thrilled -- unless they don't like turkey and football. Let the games begin! Keith Stewart 773-529-7000

Tuesday, November 5, 2013

Real Estate Report - Election Day - November 5, 2013

Today is Election Day. With all the partisan issues we have had over the past few years, we do understand that many Americans are turned off by politicians. Plus today's Election Day does not focus upon national races such as the President and Congress. We believe that exercising your right to vote is what makes our nation great. And the people who are elected in local and state races are those who will be running for Congress in the not too distant future. In essence, this is our chance to stock up the "farm system" (baseball term) for a stronger future. Thus, even though off election years tend to have low participation rates, we believe that these years may even be more important for ours and our children's futures. Meanwhile, we are on data overload as our government gets caught up on economic data releases delayed during the shutdown. Two things about these releases. First, we are not sure if they are as accurate as usual. Second, weaker data released may be temporary due to the effects of the shutdown. For example the release regarding consumer confidence absolutely showed sagging confidence as a result of the shut down. The real story will be told after this data clears and we see how the consumer rebounds. A consumer rebound is all-important especially because of the time of the year. Yes, the Holiday shopping season is here. This season accounts for the results for many companies during the year. So we would like to wish you Happy Election Day and a great start to the season of purchasing! www.ChicagosMortgageChoice.com