Unemployment Rate

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses the unemployment rate.

• The Bureau of Labor statistics released its metropolitan area statistics this morning.  This release covers October’s unemployment statistics for 372 metropolitan areas across the country.
• The national unemployment rate fell to 8.5% in October, down from 9.0% a month earlier.  Simultaneously, the unemployment rate fell in 281 metro areas over this same time period, while the rate rose in 76 areas.
• The unemployment rate can be misleading though, as the rate can decline, even when employment is weak or falling.  Employment was higher in 233 metro areas in October compared to October of last year suggesting that the labor markets are firmer this year in a majority of metro areas.
• While there has been improvement, generally speaking unemployment remains highest in the metro areas of the sand states (e.g. Nevada, Arizona, Florida, and California) as well as parts of the rust belt including Detroit.  The decline in unemployment will help to reduce the flow of delinquencies on properties in those areas and non-distressed markets, but the combination of weak employment growth and underwater borrowers suggests that the flow of delinquencies and foreclosures in these areas will remain elevated in the near term.  More employment growth is needed to stabilized local housing markets.