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Local Employment, Income Numbers and Rate Update

According to the Tribune, county employment numbers have gradually improved over the past three months. Since July, about 2,800 jobs have been added, which is an increase of 3 percent off the previous number.  County employment peaked in 2007 at 104,600 nonfarm jobs. After October’s gains, the number of jobs ticked up to 96,700, which is still down 8.2 percent from the peak. Despite the slight increase in jobs, unemployment actually increased to 9.7 percent from 9.6 percent in September.

The recession has hit the California middle class particularly hard. As reported by the Tribune, the Public Policy Institute of California released a study showing the proportion of “middle class” households has dropped to 49.7 percent of the population.  Middle class is defined as a yearly income of between $44,000 and $155,000.  The “upper class” accounts for 13.7 percent of households, and the “lower class” for 36.6 percent. Since peaking at 60 percent of the population in 1980, the California middle class has shrunk to the current 30 year low.

The Central Coast middle class has been hit the hardest in the state. Since 2007, median household income has declined by 17.9 percent.

Nationally, the unemployment rate is 8.6 percent. In a 60 Minutes interview, President Barack Obama indicated he thought it “possible” the rate would continue to decline and reach 8 percent come November election time.  Election prognosticators say that unemployment and job numbers will play an important factor in the campaign, as Obama entered office with an 8 percent unemployment rate that has only gotten worse amidst the global economic crisis.

The Dow dropped today on – what else – concern about European debt. Last Friday, the 17 nations that use the euro currency agreed to a plan detailing more fiscal discipline, debt protection mechanisms, and to donate 200 billion euros to the International Monetary Fund (IMF) to help eurozone members with debt problems. The market responded favorably to the announcement initially, but today (Monday) the Dow fell 162 points in part due to skepticism that the deal created a viable long-term solution. The drop ended a two week rally.

Rates are favorable this week. We have the 30 year fixed at 3.75 percent (3.884 percent APR) and the 15 year fixed at 3.250 percent (3.489 percent APR).  FHA and VA 30-years look extremely favorable as well, at 3.5 percent (4.543 percent APR) and 3.5 percent (3.736 percent APR) respectively.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile