Could we be turning the corner with unemployment and the economy as a whole? Signs of significant economic recovery have been appearing throughout the many economic reports that were released this week. Of course housing continues to be the only area of the economy that is not improving, however I still believe there is much to be excited about.
Today the jobs report came in the strongest we have seen since May of 2010. National unemployment dropped from 9% to 8.9% and the addition of jobs exceeded expectations. Let's add that first time jobless claims came in at the lowest point we have seen in a long time at 368,000.
Although the stock market did not rally with the improved employment news, I truly believe that we may finally be on the right path to employment recovery. It will be a long gradual road, with some bumps, however none the less I feel we are headed in the right direction.
I have written in the past that in order for the economy to improve, the psychology of the nation must improve first. The numerous positive reports this week can be the beginning of that psychological shift we badly need.
The ISM Manufacturing and Non-Manufacturing Indexes came in strong once again. New orders, new export orders and backlog orders are all showing sizeable increases which simply means that demand for goods is increasing at a healthy pace.
Retail sales are continuing to improve as well. More and more we are starting to see consumers purchasing items that are not necessities which is another strong indicator that the economy is moving in the right direction. Factory orders all came in stronger than expected for the month of January as well.
Now for the news I don't want to report. Unless you have been living under a rock, or just have not had to go to fill up your car with gas, you are already aware that gas prices are rising rapidly. Turmoil in the Middle East is only partly to blame. Oil speculators are driving prices up as well. "Haven't we seen this before?"
Housing continues to be the one main sector of the economy that is not showing signs of recovery however I think that is going to start to change. With employment, manufacturing and retail sales all showing strong signs of growth, I believe that over time this will translate to the desire for people to want to purchase homes again. It is important to understand that making the decision to purchase a home is not something that will change overnight. Consumers must develop a sustained feeling that the economy is recovering and then that will translate into buying desire for real estate.
The barrage of snow storms and miserable weather that has plagued many areas of the country this winter has seemed to ease. A change in weather can be a catalyst for change in thinking.
Economic news on tap for next week is:
• Wednesday March 9th - MBA Mortgage Applications
• Thursday March 10th - Jobless Claims
• Friday March 11th - Retail Sales and Consumer Sentiment
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