Cutting the whole table down what we see as the relevant details
for jobs and housing yields some interesting insights. First up is jobs:
Nov'05
%-Nov'05
2005…..
Jun
Jul
Aug
Sep
Oct
Nov
vs. Jun'05
vs. Jun'05
Res. Employed (Ku)
807.2
814.7
814.7
812.9
816.2
812.0
4.80
+0.6%
Unemployed (Ku)
47.7
47.4
46.9
44.6
47.0
45.3
(2.40)
-5.0%
Total Workforce (Ku)
854.9
862.1
861.6
857.5
863.2
857.3
2.40
+0.3%
Unemployment Rate
5.6%
5.5%
5.4%
5.2%
5.4%
5.3%
(0.30)
-5.3%
Total Jobs
872.4
871.3
868.6
868.7
871.0
871.2
(1.20)
-0.1%
Over the last six months, county residents gained +4,800 new jobs.
Before you get too excited, note this is only an 0.6% (or 0.006) increase. We doubt the accuracy of the county's methodology
down to such a level but, if accurate, nearly 5,000 new jobs would be nothing to sneeze at.
Curiously, over this same time, the number of unemployed county
residents dropped by only -2,400, or half the number of newly-employed residents. Perhaps half the newly-employed county
residents were not previously even in the workforce (since they were no longer looking) and still obtained new jobs.
(Who knew it was that easy?)
Long-time readers will notice this is the opposite of
what we saw in 2003 and 2004. Then, people were dropping out of the work force more quickly than jobs were being cut,
lowering the "reported" unemployment rate (which was trumpeted as "good" news) even as residents employed was still
decreasing. Time will tell if this reversal is indicative of a reversal in the job market, an indication people are
moving into the county to take new jobs or something else entirely.
In our opinion, "Residents Employed" and "Unemployed" are trumped
by "Total Jobs," which actually declined over the same six month period. It's possible county residents
gained 6,000 new jobs outside the county, while county employers cut a net -1,200 (-0.15%) but we are now piecing together
explanations to explain several contradictions in the data.
The simpler explanation is these numbers are all basically flat.
The month-to-month changes are just noise. The 12-month numbers support this concept, showing -0.9% residents employed
(vs. +0.6%/6 months). +4.6% unemployed (vs. -5.0%) and +3.3% total jobs (vs. -0.15%).
Recent headlines are trumpeting an employment recovery, as
Silicon Valley becomes strictly an "idea economy." We submit the actual data shows no such thing.
In the face of these headlines proclaiming strength, and the "bottom," in
the local job market, let's look at local housing figures over those same six months:
Nov'05
%-Nov'05
2005…..
Jun
Jul
Aug
Sep
Oct
Nov
vs. Jun'05
vs. Jun'05
Med Home Sale (K$)
705
700
714
705
714
715
10
+1.4%
y-o-y $
17.7%
18.6%
21.0%
18.5%
19.0%
19.2%
1.47%
+8.3%
Homes Sold
2,175
1,887
1,878
1,759
1,587
1,494
(681)
-31.3%
y-o-y volume
-11.2%
-7.7%
-4.5%
-5.7%
-9.5%
-12.4%
New housing OK'd
309
398
718
444
177
276
-33
-10.7%
Last 12-mos' permits
5,514
9,334
7,356
7,299
5,918
5,954
440
+8.0%
months' inventory
2.5
4.9
3.9
4.1
3.7
4.0
1.5
+57.2%
Total
permits >=Sep'02
19,616
20,014
20,732
21,176
22,094
21,629
2013
+10.3%
months' inventory
9.0
10.6
11.0
12.0
13.9
14.5
5.5
+60.5%
The headline is county median home prices hit an all-time high
of $715K with a 12-month increase of more than +19%. Not too shabby!
Such reports, however, fail to highlight the 6-month
gain is now only 1.4%. Or to point out November's volume was -12.4% below 2004. Or the number
of homes sold has now declined five (5) consecutive months.
Many buyers "invested" based on the inevitability of
big jobs gains in Silicon Valley which, in turn, would ensure housing never decline in value around here. (Just ignore
that -27% drop in the early-90's, "this time it's different.") Yet big job gains, or nay jobs gains, are
still yet to appear over three years from the "bottom."
Housing gets even more "interesting" when you add
up new housing permits issued. Despite a six-month drop of -10.7% in monthly new permits, the months of inventory
represented by those permits increased +57%. In other words,
sales volume is dropping more quickly than builders are slowing their new housing plans. Anybody else see a corollary
with the 2003 and 2004 unemployment numbers? And the denial of what's really happening?
Measured from the "bottom" in September, 2002, total new
permits now represent 14.5 months of inventory, which is up 60%(!) over the last six months! Is there really a
"shortage" of housing in Silicon Valley?
Conclusion:
Despite the headlines, current data does not show employment,
or housing, gaining ground over the last six months.
