JOBS DROP FOR FIRST TIME SINCE 2003

The consumer, due to strong job growth, has kept us from recession. That trump card may have been played out at this time. This was the first job loss for the country in nearly 5 years. The biggest declines were seen in manufacturing, losing 28,000 jobs, and construction, losing 27,000 jobs. Construction has now lost over a 1/4 million jobs since the peak in 2006.

I read this as positive for our future. We need lower interest rates to move the housing market into recovery. If the economy would have been weaker last year, lower interest rates may have pushed off "sub prime II" in August. The strong economy had sent interest rates higher in May of 2007, which pushed home sales down. As home sales declined more homes went into foreclosure. With the increase in foreclosures came "sub prime II," it hit the market like a bomb going off! "Sub prime II" made everything worse. When that bomb went off, most financing options for buyers disappeared. Buyers could not close on homes. As a matter of fact, a home we are working on selling as a "short sale"; was under contract at that time, docs signed and ready to close the day of "sub prime II". The bomb went off, the lender closed shop and the home went back on the market.

Hopefully we don't fall into a major recession, but one that keeps interest rates low long enough to bring DEMAND back in balance with the market. Our economy cannot move forward for the long term until this housing issue is fixed!

U.S. Jobs Fell Unexpectedly By 17,000 During January
Topics:Interest Rates Inflation Employment Federal Reserve Economy (Global) Economy (U.S.)
By Reuters 01 Feb 2008 08:35 AM ET

U.S. employers unexpectedly cut 17,000 non-farm jobs in January, the first time in nearly4-1/2 years that U.S. payrolls shrank as fading construction and manufacturing sectors reflected the economy's waning momentum.
The Labor Department report on Friday came in much weaker than anticipated by analysts surveyed by Reuters, who had forecast 80,000 jobs would be added last month. The department revised December's new-job total up to 82,000 from 18,000 but the hiring trend clearly was fading as 2007 ended.
The last time that jobs were cut was in August 2003 when 42,000 were lost.
Read the full story: http://www.cnbc.com/id/22948805