It is hard to believe that another year is just about to pass, but the end of
the year holidays are already here. It has been an interesting year. We began
with one of the harshest winters ever to hit the United States and it seems as
if we are ending the year with the same weather pattern, as the "polar vortex"
hit much of the nation in the middle of November. It is interesting that the
cold weather hit the same week that there was an announcement of a climate deal
between the U.S. and China. How can there be global warming when the weather is
so extraordinarily cold? Well, we can't get into the scientific arguments
regarding the debate, but we will note that one of the effects of global warming
is supposed to be more extreme weather, including precipitation. And these
extremes did affect our economy this year.
So, we will not be thankful for the colder weather and extreme storms, but we
will be thankful that the economy has moved forward in spite of these obstacles.
As a matter of fact, the last employment report was the best evidence that we
have had that the economy is getting better. Why do we believe that? Well, the
numbers were assessed as disappointing. We think that we have come a long way in
order for a month in which the unemployment rate went down and we added over
200,000 jobs to be labeled disappointing. Just five years ago the economy was
losing 200,000 or more jobs per month and the economy has not averaged 200,000
jobs growth per month since before the recession.
Sure, there are disappointing statistics associated with the report. There is
still a low labor force participation rate and stagnant wage growth, which means
that many of the jobs being created are lower paying. However, the solution to
both of these problems is the creation of more jobs. When there is a shortage of
labor, then wages will increase. And if 200,000 jobs added per month is our
"low-point" for the next year, there will be plenty of jobs created which will
help these numbers. And continued low interest rates and falling oil prices are
two additional things to be thankful for with regard to the economy. Yes, things
are not perfect, but when you compare where we are today to five years ago, we
are in a much better position to move forward with regard to a healthy economy.
If it doesn't snow all winter!
Hoping you and your family have a fabulous
Thanksgiving.
Mike
Tuesday, November 25, 2014
Tuesday, November 11, 2014
Veterans Day
The election is over. The October employment report has been released. But these important events should not obscure the real importance of this week. Today is Veterans Day, the day we give homage to those who have served our country by defending our freedom throughout our history. We only need to look at what is happening in the Middle East to be reminded as to how important those who have served are to each and every one of us. Many don't realize how extensive the population of veterans is in this country. There are well over 20 million veterans and active military, comprising approximately 10% of the adult population of the United States.
For those in business, this makes veterans a very important demographic. For example, did you know that over 15% of the new home sales in the United States are being financed through the Department of Veterans Affairs VA Loan Program? Veterans also own around 10% of all U.S. businesses and have an income which is approximately $10,000 higher than the average American. So, we should not only thank veterans for serving, but also as veterans come back from overseas, helping them assimilate into society is not only the right thing to do, it makes great business sense.
Of course, we could not completely ignore the events of last week. As for the election, the results are important because we will no longer have a "divided" Congress; however, this does not mean that all gridlock will be removed. The employment report was also newsworthy, as this report followed our strongest month of job creation in quite some time. The numbers released Friday were slightly below forecast, but were still strong and included an upward revision of the job gains for the previous month. Plus, the unemployment rate moved down to 5.8% while the labor force participation rate increased slightly as well. All in all, a report that shows the jobs recovery continues to be on track.
Mike Ervin
Branch Manager/Mortgage Loan Officer
NMLS: 282715
O: 650.735.5261
C: 650.766.8500
For those in business, this makes veterans a very important demographic. For example, did you know that over 15% of the new home sales in the United States are being financed through the Department of Veterans Affairs VA Loan Program? Veterans also own around 10% of all U.S. businesses and have an income which is approximately $10,000 higher than the average American. So, we should not only thank veterans for serving, but also as veterans come back from overseas, helping them assimilate into society is not only the right thing to do, it makes great business sense.
Of course, we could not completely ignore the events of last week. As for the election, the results are important because we will no longer have a "divided" Congress; however, this does not mean that all gridlock will be removed. The employment report was also newsworthy, as this report followed our strongest month of job creation in quite some time. The numbers released Friday were slightly below forecast, but were still strong and included an upward revision of the job gains for the previous month. Plus, the unemployment rate moved down to 5.8% while the labor force participation rate increased slightly as well. All in all, a report that shows the jobs recovery continues to be on track.
Mike Ervin
Branch Manager/Mortgage Loan Officer
NMLS: 282715
O: 650.735.5261
C: 650.766.8500
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