The American Economy: What the Jobs, Housing Numbers Really...

The American Economy: What the Jobs, Housing Numbers Really Mean
Posted Mar 09, 2009 12:52pm

We all know the US economy is bad and it's a terrible time for workers and homeowners, with a direct connection between the two.

There's a lot of talk about the being the worst job market since the early 1980s, and worst housing market since the Great Depression. But what does that really mean?

Diane Garnick, investment strategist at Invesco, offers some perspective on the current downturn, based on the numbers:

* 11.6 million Americans are officially unemployed, or roughly the population of Ohio.

* 651,000 Americans lost their jobs in February, or more than the total number of policemen currently employed in this country.

* With a population of 300 million and an average family size of 3.19 people, the U.S. has approximately 93.65 million "family units." Assuming each of those families can afford a house and only one house (both big assumptions), that leaves 32 million excess homes on the market.

The really bad news on the real estate front? The average family size is increasing as aging parents come to live with their children, and older adults are forced to move back in with their parents because of grim economic circumstances. The rising number of "multi-generational" households means there's an even larger number of "excess" homes on the market, and few buyers are willing or able to step in and sop up the supply.

These and other factors explain why Garnick doesn't believe President Obama's mortgage plan will really fix the housing crisis, and why she says there's a long way to go before the economy or stock market bottom.