Good Jobs News
The reason for high unemployment figures in the United States and the chance they will improve have been based on two opposing theories. The first is that jobs were lost because of the recession. The second is that many jobs are gone forever because of permanent changes in the economy. The debate is framed by the balance between cyclical and structural unemployment. One piece of good news from IMF researchers and others from the San Francisco Fed is that 75% of the jobs lost in the recession are cyclical, which means they will come back as the economy recovers. Based on that assessment, the recession’s effect on jobs was mostly temporary.
Apartment Vacancy Rates
Apartment vacancy rates fell to their lowest level since 2001, according to research firm Reis Inc. Part of the reason is an influx of young people into the rental market. Another is that people who have lost their homes — or given them up — have entered the renters pool. National rental vacancy rates were 4.9% in the first quarter, compared to 6.2% in the same quarter a year ago. Rental prices are likely to increase because of the number of occupied apartments. The trend could have odd effects on the housing market. On the one hand, people who have left homes tend to increase the overall inventory of houses, which should drive down price and probably demand. Potential buyers do not want to purchase homes for prices that likely will continue to fall. On the other hand, high rent costs and low mortgage rates could bring renters who have to pay more for their residences back into the home market.
Luxury Car Sales
BMW and Mercedes had record sales in the U.S. for the first quarter. It is a good sign that higher end households have healthy amounts of disposable income. It is bad news for other luxury car companies, particularly Ford’s (NYSE: F) faltering Lincoln division and the troubled Infiniti division of Nissan. BMW sales in March were 23,940. Mercedes has sales of 23,134. Each company has introduced several new models recently. That, by itself, may not be the explanation for the improvement in numbers. Americans prefer Germany luxury cars. Perhaps they are just better made.
Douglas A. McIntyre
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