When 7.2% unemployment looks good
When does 7.2 percent unemployment look good in Maryland? When it marks the end of -- or at least a pause in -- a rapidly worsening job situation. August was the fourth straight month of 7.2 percent, according to new Labor Department estimates. The rate ratcheted up to that point from 4.5 percent a year ago.
There's been a lot of chatter about the "R" word this week because Federal Reserve Chairman Ben Bernanke, in a Q&A after a speech, said he thinks the recession is likely over. A majority of you disagree -- or at least 60 percent of you who took the poll that was part of Friday's live chat.
I took a look at Bernanke's remarks, and they're hardly "happy days are here again." He cautions that job growth probably won't be any great shakes next year, saying that most forecasters think the "pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession":
And the arithmetic is that unless the economy grows, you know, significantly faster than its longer term growth rate, it’ll be relatively slow in creating jobs over and above those needed to employ people coming into the labor force, and therefore, the unemployment rate would tend to come down quite slowly. So that’s a risk, that’s a possibility.
The health of the housing market is influenced by the ease with which people can get and keep jobs. (Obviously there's a housing connection, or I wouldn't be blogging about it.)
But sometimes it's the loss of a job that prompts someone to buy a house.
Louis Gagliano, a Baltimore County resident who lost a business analyst job, said it's been very difficult finding a company ready to hire. He's had several interviews of the "you're the one we want if we grow down the road" variety.
In the meantime, he bought a home in Baltimore's Highlandtown neighborhood and is rehabbing it to sell. He dipped into his savings and tapped his 401(k) to finance the project.
He figures it will be ready for sale in October, three months after he acquired it and about a year after the wave of layoffs at his company.
"We're working like crazy," Gagliano said.
I can think of several other locals who got into real estate investing after a layoff. Would you? Or is it more risk than you'd be comfortable taking?