Economy Watch: Job Growth Tepid in January; Asking Prices for Homes Up; Investors Back to Buying
- Feb 07, 2014
The U.S. economy created 113,000 jobs in January, according to the Bureau of Labor Statistics on Friday, a modest rebound from the slightly revised 75,000 in December. Employment increased considerably in construction and manufacturing, but dropped in retail and government, especially at the federal level. Job growth averaged 194,000 per month during all of 2013, so the current report is still relatively weak.
The official unemployment rate, which is based on a separate survey as the employment change, dropped from 6.7 percent in December to 6.6 percent in January; a year ago the rate was 7.9 percent. The BLS measurement of unemployment known as U-6, which includes the unemployed who are actively looking for work, but also discouraged workers and part-time workers looking for full-time work but who can’t find it, came in at 12.7 percent in January, compared with 13.1 in December. The U-6 a year ago was 14.4 percent.
On Thursday, the U.S. Department of Labor reported that for the week ending February 1, initial unemployment claims came in at an annualized rate of 331,000, a decrease of 20,000 from the previous week. The four-week moving average was 334,000, an increase of 250 from the previous week.
Asking Prices for Homes Still Creeping Upward
Trulia reported on Thursday that in January, asking home prices rose 1.1 percent month over month, the largest monthly gain since June 2013. But the quarter-over-quarter price increase of 2.1 percent remains below spring 2013 levels, when asking prices accelerated at their fastest rate in the recovery. Year over year, asking prices are up 11.4 percent nationally and are positive in 97 of the 100 largest metros.
The company also reported on home-price rises in the nation’s “tech hubs,” which – according to popular perception – are rising faster than in other markets. Strictly speaking, that might be true, Trulia says, but those markets are also coming back from steeper recessionary declines than most others, so recent rises don’t constitute a bubble. For the purposes of the report, “tech hubs” are San Jose, San Francisco, and Oakland; Seattle and San Diego; Washington, D.C., and Bethesda-Frederick-Rockville, Md.; Middlesex County, Mass., the home of Harvard and MIT; and Raleigh and Austin.
The year-over-year price gain in January for the 10 tech hubs averaged 13.4 percent, ahead of the 11.4 percent gain for the other 90 large metros. The reason for the gap, Trulia says, is that tech hubs had steeper price declines during the bust and have fewer homes stuck in foreclosure today. Adjusted for price declines during the bust and the current foreclosure inventory, the year-over-year price change is no different in tech hubs, on average, than in other large metros.
Investors Back to Buying
Wall Street, which has been in a downward – even correction-like – mood lately, scored a large up day on Thursday, perhaps in anticipation of the employment numbers on Friday. The Dow Jones Industrial Average gained 188.3 points, or 1.22 percent, while the S&P 500 advanced 1.24 percent and the Nasdaq climbed 1.1 percent.
Despite the uptick, U.S. stock indices are still down for the year. Since Jan. 1, the Dow is down about 5.7 percent. The S&P has lost almost as much, dropping about 4.1 percent for the year thus far. The Nasdaq’s downward movement has been more modest, coming in at about 2.9 percent.