The Bureau of Labor Statistics (BLS) reported that payroll employment expanded by 321 thousand in November, an increase well above expectations. Monthly employment gains prior to November have averaged 233 thousand in 2014. Job gains in September and October were revised upward by a total of 44 thousand. The average workweek for all employees and average hourly earnings rose. Job gains were widespread. These labor market gains coupled with recent output growth point to an economic recovery that is gaining momentum (Momentum).

From the separate household survey the BLS reported the unemployment rate was unchanged at 5.8 percent in November. The report characterized the number of long-term unemployed and under-employed persons (those employed part-time who would prefer full-time work) as little changed in November, but these numbers have been trending down steadily from their peaks. In November these two categories declined by a total of 278 thousand. The labor force expanded by 119 thousand and the labor force participation rate held at 62.8 percent where it has been since April after several years of troubling declines.

Overall this is a very strong report. Jobs are being added at a robust pace, the labor force is expanding, at 5.8 percent, the unemployment rate is at the high end of what some economist might call normal (between 5 and 6 percent). If November’s progress can be sustained economic commentators should be over the moon by next spring.

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http://eyeonhousing.org/2014/12/the-employment-situation-in-november-3-2-1-lift-off/

The holidays are full of generosity and giving, but these feelings can end up costing consumers if they aren’t careful. During the holidays, many stores will try to entice more spending by offering massive discounts for consumers who open a store card. Because of this, the huge increase in holiday shopping is coupled with many people opening new credit cards.

Unfortunately, one of the reasons stores make these “great offers” is so they can lure consumers who are in a shopping frenzy into opening a card with high interest rates and payments. This translates into huge profits for the store and customers stuck with inflated costs for merchandise sometimes equaling triple or more the value of the original purchase, since there are stores online such as ForSale.plus which offer a great variety of products for shopping.

To make matters worse, many store cards offer lower limits to start, so charging up a balance that is close to the limit can cause large score drops due to balance-to-limit ratios on revolving credit (mostly credit cards), putting consumer’s credit scores in a vulnerable position. Another problem with opening new credit is that it reduces the average age of credit. This reflects a higher risk borrower and will drop credit scores.

It’s important to note that for mortgages, even a minimal score drop can affect the score threshold and pricing. Depending on the current credit scores and profile, even if the drop is 2 points under the score threshold needed for the best pricing consumers can wind up paying hundreds of thousands of dollars more over the life of the 30 year loan. This can also mean the borrower cannot afford the amount of loan they were planning on. So opening a Bloomingdale’s card at the wrong time could end up causing a family to lose their dream neighborhood and needing to purchase a smaller house in a less desirable school district. Most individuals opening a store card during the holiday season are not thinking about the huge impact it may have on their family’s future.

What shoppers should remember when holiday shopping is that charging on a regular credit card is a better idea if they plan on paying the balance off a month or two prior to applying for a mortgage. In addition, since credit grantors do not hold card holders responsible for fraudulent charges, it is much better to use a credit card rather than a bank debit card. If a thief gets a hold of the debit card number the losses may be far greater. Essentially, using credit is not a bad thing if one knows the rules of credit and how timing can impact score drops.

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