The job outlook for August was bleak at best. According to a number of reports, job growth for last month was zero.
Surveys conducted by the National Federation of Independent Business indicated that the number one complaint from small businesses is poor sales. Small businesses employ more American workers than any other sector of the economy. Nation wide they report that people are not buying. If people aren’t spending money, employers can’t afford to hire new employees. It’s a vicious cycle.
When you talk to most people, the reason they aren’t spending money and buying things is that they are afraid of another recession. Even though the President tries to assure us that there is no chance of another recession, no one really believes him.
Obama is supposed to address the nation with his plan to create jobs. Rumors have already been circulating about different aspects of his plan such as the government funding of the construction of new schools.
Republican presidential candidates are all trying to float new programs designed to create more jobs and spur the economy. Each candidate having their own ideas of what it will take.
However, I’ve been advocating for some time that it has to start with the housing market. The entire financial mess we are in was created by the collapse of the housing market when so many Americans found themselves in homes with rising monthly mortgage payments that they could longer afford to pay. As the number of foreclosures rose, it affected numerous areas of the economy.
New home construction is the backbone of the American economy. As the housing industry flourishes, so does the overall economy of the nation. When the housing industry slows, so does the economy. This is evidenced by the largest monthly increase in jobs numbers in the past year when more than 150,000 jobs were created. This was largely due to an increase in mortgage refinancing due to lower rates.
I know I’m not an economist but I am a student of history and one does not need to be a mental giant to see that the economy is directly tied to the housing market. If Obama or any of the GOP candidates want to put forth a plan to create jobs and spur the economy, it must, I repeat, it MUST involve an increase in the construction and sales of homes.