According to MSNBC.com, the unemployment rate dropped to 9% last month, which is its lowest level in 2 years. However, the U.S. labor market slowed considerably as only 36,000 new jobs were generated in January, the fewest in four months. These statistics offer a conflicting picture. Unemployment fell because the Labor Department’s survey determined that about a half-million people without jobs found work. Analyists believe that the severe winter weater led to the reduced number of job created in January 2011.
Job growth remains the economy’s weakest spot, even though there are many other signs pointing to a strengthening recovery. Another positive sign is that less people are filing for unemployment benefits.
What does this mean for the housing market? I have maintained that confidence will be the key to more people buying homes in 2011. If unemployment continues to decrease and less people are concerned about losing their jobs, the likelihood of buying a home will increase. If consumers have confidence in their job security, they will be more likely to move forward with a move-up or first time purchase. These are the buyers that will drive the market into a positive direction.