V-Shape Recovery Flattened Out by Unusual Uncertainty

No one's predicting a V-shaped recovery anymore--unless they're saying the right half of the V has been run over by a truck.

No one’s predicting a V-shaped recovery anymore–unless they’re saying the right half of the V has been run over by a truck. Private employers hired 71,000 new employees during July, according to the U.S. Department of Labor on Friday, which wasn’t as many as expected, but nevertheless in positive territory. Just not positive enough to budge the unemployment rate or help deal with the problem of the long-term unemployed.

In a less-noticed release by the Bureau of Labor Statistics, the employment-population ratio for the United States–the ratio of adults employed to the total adult population– dropped from 58.5 percent in June to 58.4 percent in July, the third monthly decline in a row. The labor force participation rate–that is, the percentage of the adult population actually in the work force–also dropped between June and July, from 64.7 percent to 64.6 percent, which compares poorly with the historical average of around 67 percent during the past two decades.

In July, some 181,000 people left the labor force altogether, so the official unemployment rate didn’t change from 9.5 percent. However, some of the longtime unemployed still want (and probably emphatically need) a job, according to the BLS: About 6.6 million workers who have been out of work longer than six months are still looking.

Apartment Industry on the Upswing: NMHC Survey

Job creation may be sluggish, but jobs are being formed , so things are looking better for apartment owners and operators. The latest National Multi Housing Council Survey of Apartment Market Conditions, released on Friday, says the market is rebounding with considerable strength. Sales volume is up, debt and equity are more available, and markets are tighter.

“Apartment market conditions continue to improve across the spectrum,” said NMHC chief economist Mark Obrinsky in a statement. “Indeed, the average for all four NMHC indexes set a new record for the second quarter in a row.”

Indexes for both sales volume and equity financing registered all-time highs in July, at 78 and 73, respectively. The debt financing index jumped to 81 from 58, with 64 percent of respondents saying conditions for multi-family borrowing were better this quarter than last. The market tightness index, which measures changes in occupancy rates and rents, rose from 81 to 83.

CRE as a Whole Not on the Upswing

The CoStar Commercial Repeat-Sales Indices (CCRSI) for the first half of 2010 indicated that large metro areas were seeing increasing commercial real estate prices as investment capital gravitated toward those markets at the expense of smaller markets. But with the July numbers, that pattern might be changing. CRE prices seem to be softening everywhere.

Between May and June, the overall CCRSI dropped 7.7 percent, while the investment-grade property index was down 4.38 percent. Previously (during 2010, at least), the investment-grade property index had been moving steadily up.

Wall Street experienced a deep down day most of the time on Friday, but managed to climb to near the break-even point by the end of trading. The Dow Jones Industrial Average ended down 21.42 points, or 0.2 percent, while the Nasdaq also was down 0.2 percent. The S&P 500 lost 0.37 percent.