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The employment outlook is improving modestly




I haven't seen any recent reports from the folks at ECRI, but I've got to believe they are getting nervous about the recession call they made a few months ago. Today's news from ADP was a definite upside surprise, in which they report that private sector jobs grew by 206K in November (vs. expectations of 130K), and they revised upwards the prior two months by 35K. Of course even these levels of job growth are puny compared with what we would expect to see in a normal recovery, but it sure is nice that things are improving—however modestly—instead of deteriorating as so many have been fearing. 


The Challenger survey of announced corporate layoffs in November also confirmed that there is no sign of any deterioration in the jobs market.


While I'm on the subject of good news, it is also nice to see that the mortgage purchase index (above chart) has registered some solid improvement in the past several months, albeit from very low levels. Things could be a lot better, to be sure, but a 20% pickup in new mortgage applications—which is echoed in a pickup of pending home sales—is a sign that consumers are able to respond to record-low mortgage rates, and the housing market is clearing.

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