Stocks rose as talks regarding the “fiscal cliff” progressed this past week and economic data came in better than expected. The Dow rose 1% for the week and closed on Friday at 13155, marking its third consecutive weekly gain. The U.S unemployment rate fell to 7.7 percent from 7.9 percent just last month despite Superstorm Sandy, which hit the northeast coast in late October and was expected to slice tens of thousands of jobs from the tally. Instead, the U.S. added 146,000 jobs in November, the Labor Department reported on Friday. This is more than the 80,000 forecast by economists. This is the lowest the jobs report has been in the last five years. Encouraging news for our economy, to say the least.
“November auto sales best in years” was a headline this past week. With the presidential election behind them, automakers reported positive sales growth in November, compared to the same time last year. Demand rose after Superstorm Sandy disrupted sales in October. Imports benefited the most, as Honda sales rose 39%, VW 29%, and Toyota rose 17% respectively. U.S. automaker Ford sales rose 6 % and GM sales rose 3%. I have always compared our economy to auto sales and construction/real estate. It seems they go hand in hand with the economy. U.S. construction spending rose to its highest level in five months, rising 1.4 percent. U.S. home prices have seen their best rise in the past six years, too. A measure of U.S. home prices rose 6.3 percent in October compared to a year ago at this time. The jump adds to signs that the once-battered home market is on a rebound. Banks reported strong recovery earnings this past week as well. U.S. banks are enjoying their best profits in six years and are lending a bit more freely, a report stated. I am going to be watching to see which financial CEOs get huge bonuses at the end of the year on the backs of consumers and the unemployed. Weren’t they to loan more money to small businesses in order to help get the unemployed back to work in the first place? Instead, all I’ve seen in most cases are huge profit taking and bonus payouts.
Finally, the ISM (Institute for Supply Management) said its index of non-manufacturing activity rose to 54.7 from 54.2 in October. Orders to U.S. factories rose 0.8 percent in October, helped by a 2.9 percent gain in demand for equipment that reflects business investment plans. Plus, the Labor Department said productivity grew at an annual rate of 2.9 percent from July through September. That’s its fastest pace in two years. All three of these reports reflect positive numbers, which says to me that the economy is on an upswing. The situation in Congress is the only thing that could hinder continued growth. By that, I mean Congress needs to come together for the good of the American people and solve their differences over the fiscal cliff problems facing us at the end of this month. If we do go over the “fiscal cliff,” then who is at fault? I say if that does happen, then we replace those in Congress from both sides of the aisle in the next election coming up in two years. In reality, I personally think Congress and the President will come to an agreement before December 31st.
Real Estate, Mortgage Industry, and Other Economic News
With the Eagle Ford Shale helping our economy, San Antonio has also seen a tremendous increase in economic productivity from its manufacturing sector too. Since 1991, the manufacturing sector in San Antonio has grown from a $7 billion industry to one that now contributes $22.5 billion to the local economy. With numbers like these, it is no wonder that San Antonio/Austin are gaining in the national spotlight of cities whose economies will continue to grow and do well in the months and years to come. Keep in mind that “spill over” from the economy of these two cities affects the Texas Hill Country. When folks are working, and our children are being educated, our economy throughout this state benefits. As a matter of fact, look at the area unemployment numbers that tell the tale. Statewide unemployment is at 6.3 percent. A couple of county numbers to point out for now are that Kendall County’s is at 5.9 percent and Gillespie County registered the lowest unemployment rate in October in the 12-County Workforce Solutions Alamo area at an impressive 3.8 percent. This tells me home-buyers are coming to Texas and they love to buy and work in the San Antonio/New Braunfels/Austin areas, including the Hill Country.
Besides good housing news nationally, home prices in the San Antonio/New Braunfels metro area rose 1.7 percent between the second quarter of 2011 and the second quarter of 2012, according to Brookfield, Wisconsin-based financial services firm Fiserv Inc. The numbers are expected to continue improving. Fiserv is projecting that between second quarter 2012 and second quarter 2013, local home prices will rise at least another 0.6 percent.
Freddie Mac reported the average U.S. rates on fixed rate mortgages ticked up this week just slightly above their record low levels, keeping home buying and refinancing attractive to consumers. The 30-year loan rate ticked up to 3.34 percent, above last week’s rate of 3.32 percent. Two weeks ago the rate had hit another record low to 3.31 percent, the lowest on record dating back to 1971. As the year closes, I expect to hear better than expected housing news. After all, who would want to wait and buy or refinance when things are looking up the way they are now? No reason to, in my humble opinion.
Finally, congratulations to Kerrville’s Johnny “Football” Manziel for winning the Heisman Trophy. Johnny made football history as he is the only college freshman to win the famous honor. I am praying that when Johnny does turn pro he signs with the Dallas Cowboys or Houston Texans. At least let’s keep him local! But really, we wish him the best throughout his college career and beyond.
( This article is for informational purposes only. Do not use it as financial advice. Information for this article is from but, not limited to the S.A. Express News, Wall Street Journal, Boerne’s Hill Country Weekly, Blanco County News, A&M Real Estate Center website. For questions/comments contact Tony Stevenson at1.800.460.6990 or email: firstname.lastname@example.org.)