In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment insurance claims.
- Good news on the job front this week: Fewer initial claims for unemployment insurance were filed in the week ending July 13 compared to the previous week, with claims dropping to 334,000, a decrease of 24,000 from the previous week’s level. The number of initial claims filed has been trending downwards and is back to the “normal”, or pre-recession, level of about 350,000.
- Although the economy has been experiencing fewer job losses, the level of net jobs still needs to accelerate to make a dent in lowering the unemployment rate, which as of June was at 7.6 percent. Federal Reserve Board Chairman Ben Bernanke testified yesterday before the House Financial Services Committee essentially stating that monetary policy will continue to be accommodative until there is a substantial improvement in the labor market. So while this week’s unemployment claims data is a piece of good news, the Federal Reserve seems to give indication that monetary policy will continue to remain loose until job gains accelerate.
- What this means to REALTORS®: NAR expects about 2 million net new jobs in 2013. Fewer job losses and more job gains will provide support to increased home sales and rental apartment demand. However, much faster job growth is required to lower the unemployment rate.