The Bureau of Labor Statistics (BLS) Non-Farm Payrolls report for December exceeded Wall Street’s expectations by 5,000 net new jobs, showing 155,000 positions created in December.
The December tally raised the economy’s 12-month total to 1.84 million net new jobs created nationwide. Jobs added in December mark the 27th consecutive month of job growth.
Job sectors showing the strongest growth to close out 2012 included:
- Health Care
- Drinking and Eating Establishments
Private-sector hiring is driving the jobs market, too. 168,000 new private sector jobs were added in December. Government jobs fell by thirteen thousand.
Monthly job creation has averaged +153,000 jobs since 12 months ago. It’s a fine measure of growth but economists believe it’s not enough job creation to significantly reduce the national unemployment rate. 14.4 percent of workers are categorized as under-employed.
December’s national unemployment rate was 7.8 percent, representing 4.8 million job seekers. This figure matched Wall Street’s expectations and was equal to November revised unemployment rate of 7.8 percent.
The improving jobs market and national unemployment rate make an impact on both mortgage rates and Chicago home prices.
Job creation suggests an expanding economy, which typically leads mortgage rates higher. In addition, with more employed persons nationwide, the potential home buyer pool grows larger, which introduces new demand to the housing market. With more demand, all things equal, home prices rise.
Job growth is one reason why home values climbed more than 5 percent in 2012, according to the Federal Home Finance Agency; and why the national housing supply would be exhausted in fewer than 5 months, at the current sales pace. Demand for homes is high and today’s low mortgage rates are extending buyer purchasing power in Illinois.
For home buyers, the expanding U.S. economy and steady job growth suggests that home prices may not rocket higher this year, but will continue to increase, little by little.