From the stock market's biggest investor to the newlyweds who are hoping to buy their first home, everyone is wondering what the economy, interest rates and employment opportunities are going to be like this year. And the answer is weather-related! Not since Hurricane Katrina has there been this much talk and concern as to whether we are getting real numbers on the economic reports or those skewed by the weather. In the employment report for the month of December which was released on the 5th of January, it was widely reported that the number of jobs was inflated by 30,000 construction workers because December was unusually warm and the projects didn't shut down as they always have in December in other years.
If the figures are weather-related then two more questions are prompted: will the weather return to normal soon and will all the economic reports correct themselves in the coming months? Last week, first time claims for unemployment dropped 8000 when a rise was anticipated. Does this mean we have a better employment report coming in the first week of February or does it mean that because we had so many ice showers and freezing rain incidents reported that the unemployed didn't make it to the unemployment offices to sign up for their benefits? The answer to that question is a major piece of the weather or whether not equation.
Just because the economy is so complex, you also have to add into the mix the oil situation. Oil has had a precipitous drop this year, and people have predicted oil to go back to near pre-war prices around $30 a barrel. Some of the experts in oil as T.Boone Pickens have talked about oil at $100 a barrel. The difference between those two extremes could be the biggest motivator or decelerator the economy has seen in some time. I believe that we will be closer to the Pickens' price than the other because I cannot imagine the world wide demand for oil will slacken and that the supply of oil will not see interruptions from the craze's around the world.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.