Second Half of Year Should be Better

As the worst recession since World War II closes in on the two year mark, less people are losing their jobs, but unemployment is still rising. People who do have jobs are working fewer hours for less pay. According to the Associated Press, the national unemployment rate is 9.5 percent, the highest it's been in 26 years. It's predicted to hit 10 percent before the end of the year--a number President Obama hoped to avoid with his administration's efforts to turn the economy around.

Layoffs have slowed down a bit across the country, but hiring has not picked up. While Federal Reserve Chairman Ben Bernanke has been predicting that the recession will end this year, economists predict that it will take years for the job market to recover. Companies and individuals are spending cautiously and saving at record rates.

The picture continues to be brighter for the Austin area, where jobs were added in May. According to the Austin-American Statesman, over 4000 jobs were added in May, mostly in government and a wide range of service jobs. Industries like construction and manufacturing continue to shed jobs, making the local unemployment rate 6.1 percent. While this is slightly higher than it was a year ago, it's still well below the national average and even below the Texas average of 7.1 percent. The Austin real estate market also seems to be showing signs of improvement with seasonally adjusted sales improving since December

"Layoffs seem to have leveled off in the area," Alan Miller, executive director of Workforce Solutions-Capital Area, told the Statesman. However, the job market remains competitive with new graduates and those looking for seasonal work.

While jobs are one measure of the economy's health, consumer confidence is another. The official Consumer Confidence Index comprises two parts, as explained by the Associated Press recently. There is the Present Situation index measuring how shoppers feel about the economy. Then there is the Expectations index, which looks at shoppers' outlook for the next six months. Overall, consumer confidence is far below what is considered normal, with the Present Situation Index showing the larger decline.

What this means is that the Consumer Confidence index that is hovering in the 50s to 60s is nowhere near the number of 90 that indicates a healthy economy. However, the number has gone steadily up since its low mark in February. But analysts predict that this recession, much like the Great Depression, will markedly change consumer spending habits for years to come. While spending a little wiser and saving for a rainy day are not necessarily bad things, it does mean that getting the economy back on track is going to take some time.

Austin is fortunate to have a wide base of job sectors, from the universities to the state capital to the tech jobs. Austinites may be tightening the purse strings a little; fortunately it is faring far better than some of the harder hit areas of the country.

Ki is a real estate agent in Central Texas. His site is devoted to Austin real estate. It allows future buyers to search listings on the Austin MLS. He also keeps a blog with information and updated statistics on the Austin Texas real estate market.