Jobs picture brightens, but what about housing?
JEREMY HOBSON: Now let’s get to this morning’s jobs numbers. The payroll processing company ADP says private employers added 201,000 jobs last month. And the job placement firm Challenger Gray and Christmas says the first quarter of this year saw the fewest job cuts of any quarter since 1995.
We’re joined now by economist Richard DeKaser of the Parthenon Group. He’s with us live, as he is every Wednesday, from Boston. Good morning.
RICHARD DEKASER: Good morning.
HOBSON: Can you look at these numbers that we got this morning and say we’ve avoided a double dip recession?
DEKASER: I think that’s safe, Jeremy. And I’d even go further. I think it’s time to put talk of a jobless recovery to rest. The folks at ADP have now told us that this is the fourth consecutive month that private sectors have created 200,000 jobs or better. And that’s also the best showing in about five years.
HOBSON: Now Richard, at the same time, we just got some number yesterday about home prices. Housing seems to be in a completely different kind of a situation. How can these two indicators be so different?
DEKASER: Well, the housing market is a special case, and I think a lot of this has to do with the lingering sentiments about the housing market. You know, back in 2005, 2006 at the very pinnacle of the bubble, just before home prices and sales collapsed, Americans thought it was a good time to buy. They thought it was a good investment. 11 or 12 percent of people asked said that this is an attractive investment for the long haul. Today, conversely, when homes are more affordable than they’ve been in over four decades, you get exactly the opposite. In recently months just 1 or 2 percent of Americans have been describing housing as a good investment. So it’s going to take time for those sentiments to shift and acknowledge the new reality.
DEKASER: Richard DeKaser, economist with the Parthenon Group, thanks so much.
HOBSON: My pleasure.
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