The Labor Department reported Thursday that the number of workers filing new claims for unemployment benefits declined by 11,000, to 457,000 for the week ending July 24. While that sounds like good news, it is just one number in the larger jobs picture.
The department also reported that the number of workers who continue to claim unemployment benefits increased by 81,000. And the 9.5 percent national unemployment rate will not budge.
A better job market is key to an improved housing market, say many experts, who are looking for good news wherever they can find it. The question is, did they find it in the most current numbers?
"Overall, jobless claims do not show any recent diversion from trends that had been established earlier in the year," J.P. Morgan analysts told The Wall Street Journal.
That doesn't sound promising. Neither does this analysis from Ian Shepherdson, chief U.S. economist at High Frequency Economics, who told Reuters: "With [unemployment] claims at these levels, the 200,000-plus increases in private payrolls that we need to see in order to bring unemployment down quickly just aren't going to happen any time soon."
Until the stubborn unemployment rate can start heading down, homeowners will be looking at home values that are lower than they would like. And potential homebuyers will continue to hold onto their money.
President Obama, who has spent the past year trying to stimulate the real estate market with tax credits, is now trying to do the same with the jobs market. His most recent effort, a bill which the Senate rejected on Thursday, would have provided small businesses with tax breaks and made $30 billion available to community banks to lend to small businesses.
While some lawmakers held out hope that a deal could be made to pass the bill before Congress recesses for the summer, it may need to wait until the fall.
"Our businesses have picked up enough weight," Sen. Mary Landrieu, Democrat of Louisiana, told the Senate after the defeat of the bill. "And if we don't give them some help now, today, many of them aren't going to be here ... when we show up in September."
The reason that Obama and others are putting so much effort into the small business sector is that, according to the Small Business Administration, small businesses have generated 60 percent to 80 percent of new jobs annually over the past decade.
Also at issue is the types of jobs people are being hired for. More companies, both large and small, are hiring independent contractors in lieu of full-time employees, because their cost to a company can be much less. Often, these freelance workers do not receive benefits, such as health insurance or retirement plans, or -- the most important thing for a mortgage broker -- a W-2 form. These jobs are viewed as less secure than full-time positions, and getting approval for a mortgage can be more difficult for someone who cannot show a couple of years worth of steady pay stubs.
And, finally, many who do have jobs are not sure, in this market, whether they will be employed a year from now. Those who even a couple of years ago might have thought about trading up, are less inclined to make a move to a bigger home, and a bigger mortgage, until the economy is in better shape.
The bottom line: Hiring has to go up before the housing market can go up. People won't buy homes until they feel comfortable spending money, and they won't feel comfortable spending money until they have a job they feel secure in.
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