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Entries in December (3)

Friday
Jan062012

December Jobs Report: Good News, Bad News

Tim Boyle/Getty ImagesANALYSIS
By ZUNAIRA ZAKI, ABC News


(WASHINGTON) -- We know the good news from Friday’s jobs report.  December had the most jobs added since September 2011 and the lowest unemployment rate since Feb-March 2009. For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. But all's not rosy, experts say.

The economy must add about 200,000 to 250,000 jobs every month to get the unemployment rate down below 8 percent.

THE GOOD SIGNS:

  • Manufacturing – After four months of little change, the manufacturing sector added 23,000 jobs.  These are generally highly productive good jobs and a sign that the economy is growing.
  • Wage growth – The average hourly earnings for all employees in the private sector rose by 4 cents or 0.2 percent in December.  This isn’t huge growth, but may be a slow crawl toward more robust growth so Americans will have more money to spend.
  • Hours worked – The average workweek for employees in the private sector grew 0.1 hour to 34.4 hours a week.  This again is not huge growth but could mean that there is more work and more demand in the economy that will eventually lead to employers hiring more people to do the work.

THE BAD SIGNS:

  • Long-term unemployed – There was little change in the long-term unemployed.  Of the country’s 13.1 million unemployed, 42.5 percent or 5.6 million have been out of work for six months or longer.   These millions of people risk being left behind as the rest of the economy moves forward.
  • Labor force participation – This is the rate at which people are entering the work force, and it did not change in the month of December.  A real measure of growth may be that people are coming into the labor force in large numbers and getting jobs quickly.  We are not seeing that right now.
  • Last year looked about the same – At this time last year there was considerable optimism about the health of the U.S. jobs market: the unemployment rate seemed to be coming down and the economy was adding jobs: but ultimately that optimism didn't bear fruit. While we have good news today, it needs to last several months before we can be sure that there are again more jobs in the U.S. economy.


Copyright 2012 ABC News Radio

Thursday
Dec292011

New Car Sales Warming Up in December

Comstock/Thinkstock(NEW YORK) -- Along with retailers who make 10 to 15 percent of their holiday sales the week after Christmas, car dealers are likely to have one of their busiest weeks too.

Alec Gutierrez, senior market analyst with Kelley Blue Book, said December sales tend to be either the strongest or close to the strongest for car dealers for two reasons.

Many consumers are awaiting for better deals on 2012 models, some of which began selling in September, while others are waiting  for 2011 models to drop in price.  Meanwhile, dealers and manufacturers are not only trying to meet their monthly goals but also trying to sell their cars from 2011 to make room for the new models.

“So if they’re running short of their goals, they will add additional incentives to sell their products,” such as increased cash incentives or cash rebates with attractive financing," Gutierrez said.  "Dealers will try to get a better price and negotiate with manufacturers for new cars also.”

Car deals in December of 2011 differ from those last year because supplies are slightly tighter in part because of supply disruption after Japan’s earthquake and tsunami. “There isn’t necessarily a limited capacity, but manufacturers and dealers do not have the excess numbers that they’ve had to unload in previous years,” Gutierrez said.

While Gutierrez said he has not seen as many cash incentives and rebates this year, especially for Japanese cars, he said financing -- often at zero percent -- is widely available and will continue to be offered through 2013.

Car sales will likely exceed 1.2 million units this month, putting December on pace to be the strongest month of the year, according to Gutierrez.  December was the strongest month last year as well.  In 2010, sales in December totaled 1.15 million units, he said.

Copyright 2011 ABC News Radio

Thursday
Jan202011

December Home Sales Hit Milestone Pace

Photo Courtesy - Getty Images(WASHINGTON) -- Sales of previously-owned homes hit  a milestone pace in December, providing a bit of good news to end a year in real estate that’s been short on positives.

The National Association of Realtors says people purchased existing homes at an annual pace of 5.28 million units. It’s the first time the pace has been above the five million mark since the government’s tax incentive program ended in June.

Economists were surprised by the strong sales of homes in December; they’d been expecting sales at around a 4.8-million-unit pace.

Some experts say a recent uptick in mortgage rates might be pushing some buyers to move quicker than they expected to so they can lock in lower interest rates.

About 4.9 million existing homes were sold during the 2010 calendar year. That’s the lowest number of annual sales since 1997 and is about five percent fewer homes sold than 2009. Housing analysts say the expiration of the Federal government’s tax credit program for home purchases slowed things down in 2010.

But December’s strong performance is giving people confidence that the housing market might stabilize in the next year.

“The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level,” said Lawrence Yun, chief economist for the realtors group. “The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

The median price of a home sold in December was $168,800, down one percent from the price a year ago.

Prices will likely start showing a little stability in the next few months as the supply of homes for sale is ticking lower. Realtors say there were 3.6 million “For Sale” signs on yards at the end of December. That’s 8.1 months supply given the current pace of sales and is getting really close to the six month supply economists say we need to see to get historically normal home price appreciation.

Copyright 2011 ABC News Radio







ABC News Radio