What Does One Report Mean?

With almost 900,000 jobs added in the previous four employment reports, the news that less than 90,000 jobs were added for the month of March came as quite a disappointment for the markets. The question is---how much does one employment report mean? On one hand, not much -- especially considering the fact that this report will be subject to additional revisions in the coming month. On the other hand, if it is indeed the start of a trend, then the markets may be right in being concerned. The markets have recent memories of an economic recovery that has been subjected to "stops and starts" for several years. Plus the government budget cuts are expected to make companies cautious as they unfold during negotiations.

Why might this one report not become part of a trend? Two words answer this question -- "real estate." In previous years of the recovery, real estate was not joining the party. There is growing evidence that this real estate rebound is for real and not only is the real estate sector contributing positively to the economic recovery, but construction jobs are being added on a monthly basis. The real estate data being released starting this week will be closely watched by the markets for any slowing trend. In the absence of any slowdown in the real estate sector, it is less likely that our one month of tepid employment growth becomes a trend. For now a dip in interest rates provides another opportunity for the nation to participate in the real estate rebound at bargain prices which may not last long if prices continue to rebound.

Mike Ervin
Senior Mortgage Banker
NMLS # 282715
Office: 650-735-5261
Cell: 650-766-8500
mike@mikeervin.com