Jobless rate to show no real improvement: Independent Financial Advice
The jobless rate in tomorrow’s monthly employment report should show 133,000 new jobs based on my sources. See the good article in New York Times about employment rate. After adjusting for population growth of 125,000 a month the “real’ job growth rate will be close to zero. The average growth has been 150,000 a month for the past 12 months. The growth in winter was skewed by the extremely warm, dry winter, so in “real” terms adjusted for weather the job growth for the past 12 months was probably 120,000 monthly and if that figure was adjusted for population growth then there was a tiny loss of jobs in the past 12 months. And this is despite massive stimulus and tax cuts. Also much of the job growth has been low wage service jobs that have suffered pay cuts. This is deflationary, which explains why the bond market today reached record low yields.
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Since home buying is constrained by the ability to get a loan which is constrained by employment and income then expect home values to stagnate. The exception is for homes located near Silicon Valley or Manhattan or Washington,DC where there are lots of good jobs.
The Treasury bond market has already anticipated and priced in the coming recession, however the economy could get worse than the bond market's forecast, making Treasury yields even lower.
I wrote an article “Record low Treasury interest rates today” and “Bond bull market to continue” and “7 things about deflation you must know”.
Investors should seek independent financial advice.