My Mortgage Blog

Will She or Won’t She?

Probably like every one of my readers, I work very hard at not being bummed by all the little setbacks among economic indicators. I could swear, though, that this economy is a terrible tease, a brazen tart that likes to offer hints of improvement, only to pull the economic carpet out from under our feet whenever we hazard a feeling of confidence in the future.

So I’m trying valiantly to recover from last Friday’s November employment data, even though I feel like a teenager who was just stood up by a girl he’d grown interested in and carefully mustered up the courage to ask out. I mean, after all, two weeks before, we say the weekly new unemployment insurance claims fall by a very heartening 34,000—from a revised 441,000 to 407,000. True, it was back up by 26,000 the following week, but we had reason nonetheless to hope for a stronger improvement in the monthly employment figures released last Friday.

A 50,000-person gain in new private jobs? Reduced to a 39,000 net gain after you subtract out the government jobs that were lost? This is, at best, about 25% of the net gain we need just to provide the new jobs required by those who are new to the employment pool—Americans who have come of age and immigrants who are establishing new lives. That’s before we even give a moment’s thought to rebuilding the number of jobs that have been lost throughout this recession.

And what shall we make of a 9.8% rate of unemployment? (I suspect, on the one hand, that we could try a positive response—suggesting that more of the unemployed felt good enough about job prospects to dive back into the “work force” and look for employment. But, on the other, we also have thousands of people who simply have no choice to seek out a job, any job, in the face of financial need.

None of this sounds like that holiday date with the girl of my dreams yet. (Okay, truth is, I’m married, and very happily so, and I thank my lucky stars—but allow me this metaphor. It feels right somehow.)

Is there any way to bring some life, some recovery, to this situation? I think so. In fact, I’m still enough of a dreamer to think we’re moving in the right direction. We continue to have net positive job figures, for example, rather than watching the number of jobs in America plummet. We have a jagged line on the graph that shows the number of new unemployment claims trending down. And we keep having—as confusing as they admittedly are—what commentators refer to as “green shoots”…signs of incipient life, of a spring that will indeed arrive at some point. Probably in the second half of the coming year.

And we have this question to ponder: If interest rates are in a rising trend, what exactly is it that we want? The fall-off-a-log refi will soon be a thing of the past, apparently. More purchase money loans—though not all that many more—are being written. And if rates rise still further, someone might break down and invest in interest-rate-based American investments other than the haven for the fearful, the Treasury security.

The vast number of retired and retiring citizens in our nation might have more money—and more confidence—with which to help the economy recover in a sustainable way. They might even feel like buying one of those sensible retirement homes now being built. Further, the feeling of growth in the economy tends to stimulate growth in the economy.

Maybe it’s time to welcome slightly higher interest rates, rather than—as Bernanke and the Fed seem to be doing—going to great expense to keep rates as low as possible. Maybe it’s time to support a recovery, rather than to avoid a deterioration. We’ll see. Meantime, watch for rates to rise slowly, in spite of the Fed’s efforts.