Despite Soft Jobs Report, Housing Attitudes Stabilizing

Though the jobs report disappointed some, Fannie Mae's latest housing survey was once again optimistic.

The U.S. economy added 115,000 jobs in April, a relatively small amount that nonetheless reduced the unemployment rate, according to the latest data from the Bureau of Labor Statistics, but homeowner interest remains high in Fannie Mae’s latest National Housing Survey.

From March to April, the rate of unemployed fell from 8.2 percent to 8.1 percent, and since April 2011, the rate is down nearly one full percentage point.

In analysis cited by HousingWire, Econoday reported that the job gains were below the 154,000 additions in March and the 259,000 in February, and they were also below what analysts had predicted for April (most projections came in around the 165,000 mark. In comments accompanying its analysis, though, Econoday was measured in its analysis, pointing out the seasonal trough jobs often experience leading up to the summer.

“April jobs were softer than expected but there were upward revisions and the unemployment rate dipped to 8.1% from 8.2% in March,” it stated. “Seasonality issues apparently are still at play.”

Bill McBride of Calculated Risk said there’s another factor at play in the job losses – public sector jobs. Though private sector employment has risen since President Obama took office, the public sector has been, in McBride’s phraseology, hemorrhaging jobs since 2007, and it’s accounting for a big chunk of the recent job cuts.

“A big difference between Mr. Bush’s first term and Mr. Obama’s presidency has been public sector employment,” McBride wrote. “The public sector grew during Mr. Bush’s term (up 900,000 jobs), but the public sector has declined since Obama took office (down 607,000 jobs). These job losses are at the state and local level, although the Federal government has been losing jobs over the last year. There job losses are still a significant drag on overall employment.”

Like Econoday, though, McBride did point out one positive element of the declines: “It appears the state and local public sector job losses are slowing, and it is likely that the decline in state and local public payrolls will end mid-year 2012.”

Doug Duncan, the chief economist of Fannie Mae, echoed Econoday’s sentiments that the weather may be playing a factor in the data.

“If the slower pace of hiring is partly due to the payback from warm winter weather, then we may see some pickup in coming months,” Duncan said in prepared comments, adding that given the complex nature of the current recovery, some additional research may be needed to conclude what the latest jobs report means.

“[I]t will take some time to confirm whether this will turn out to be a temporary lull or a repeat of prior years’ disappointment after a promising start,” Duncan said. “The unemployment rate dipped 0.1 percentage points to 8.1 percent, marking ten consecutive months without an increase.”

But even with the tepid job numbers, Fannie Mae’s April 2012 National Housing Survey, which was released just this morning, continues to report stabilizing consumer attitudes towards household finances and home prices.

In comments accompanying the report, Duncan spoke to those improving attitudes.

“This month’s survey shows a continued gradual improvement in consumer sentiment and outlook for home prices,” said Doug Duncan, vice president and chief economist of Fannie Mae. “After flatlining at depressed levels for over a year, a growing share of consumers indicate that it is a good time to sell, suggesting rising optimism for the housing market. Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations.”

Some highlights in the survey included:

  • Confidence in the economy’s direction rose to the highest point in the survey’s two-year history this month, hitting 37 percent, an increase of 2 percentage points from last month.
  • Only 12 percent think that their personal financial situation will worsen in the next 12 months, consistent with February and March as the lowest value in more than a year.
  • Twenty-three percent of respondents saw an increase in their personal income from 12 months ago, a 2 percentage point increase from March and the highest level recorded during the past year.
  • Thirty-six percent say their expenses have increased significantly over the past 12 months, a 2 percentage point increase from last month and a return to the level recorded in January.
  • On average, Americans expect home prices to increase by 1.3 percent over the next 12 months, up 0.4 percentage points since last month and the highest value yet recorded.
  • The percentage of Americans who say it is a good time to buy decreased by 2 percentage points to 71 percent, while the percentage of respondents who say it is a good time to sell continued to increase this month to 15 percent.
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