Economy Watch: Hiring Remains Strong in February

By Dees Stribling, Contributing Editor

The U.S. Bureau of Labor Statistics reported on Friday that the economy created 227,000 jobs in February, which is strong but somewhat less strong than during January, which saw a hiring environment that created 243,000 jobs. The BLS also said that the national unemployment didn’t budge from 8.3 percent despite the wave of hiring, mainly because long-term unemployed people are now returning to the job market and are thus being counted as officially unemployed by the U.S. Department of Labor’s way of calculating these things.

Anything above a monthly hiring level of 200,000 is in keeping with recent relatively good trends. Even so, the damage to the nation’s work force done by the Great Recession is still a number of years from being repaired, perhaps three or four years, should the 200,000-plus level of monthly hiring continue over that period.

On Thursday, Labor reported that initial jobless claims for the week ending March 3 moved higher by some 8,000 to 362,000, compared with lower totals for some weeks now. The four-week moving average was 355,000, an small uptick of 250 from the previous week’s revised average of 354,750. The four-week average, which is less volatile than the weekly measure, is still near a four-year low.

CRE and multifamily mortgage delinquencies drop

The Mortgage Bankers Association reported this week that both commercial property and multifamily mortgage delinquency rates generally declined during the fourth quarter of 2011. Examples of the declines included the 30+ day delinquency rate for loans held in CMBS, which fell 0.36 percentage points to 8.56 percent; the 60+ day delinquency rate for multifamily loans held or insured by Freddie Mac, which fell 0.11 percentage points to 0.22 percent; and  the 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts, which dropped 0.2 percentage points to 3.55 percent.

There was a modest rise in the 60+ day delinquency rate for multifamily loans held or insured by Fannie Mae, however. That rate was up 0.02 percentage points to 0.59 percent.

Also, in a Research DataNote analyzing year-end data from the FDIC, MBA further found that during 2011– and in fact throughout the credit crunch and recession—commercial and multifamily mortgages had had the lowest charge-off rates of any type of loan held by commercial banks and thrifts. Moreover, the rate of charge offs declined last year. In 2011, banks and thrifts charged off 0.84 percent of their balance of commercial mortgages and 0.74 percent of their multifamily mortgages, compared to rates of 1.22 percent and 1.24 percent respectively in 2010.

“Commercial and multifamily mortgage delinquency rates continue to stabilize and improve in parallel with the broader economy,” Jamie Woodwell, MBA’s vice president of commercial real estate research, said in a statement. “And counter to what many have predicted, commercial mortgages have proved to be neither ‘the next shoe to drop’ nor a ‘ticking time bomb’ for the banking sector or the economy as a whole.”

Greek creditors toe the line

There was nattering all week about the possibility that too many Greek bondholders would reject the deal negotiated earlier this year that would see them take a 50 percent-plus hair cut on their current holdings, and that the whole deal would unravel, the Greeks would “hard” default and the euro would crash and burn, perhaps taking the world economy with it. But as it happened, the conclusion to the Greek debt deal was anticlimactic.

Most of the Greek debt holders have decided to sit in their barber chairs and take their haircuts. Reportedly, about 90 percent of Greek’s creditors have agreed to go along with the deal, more than enough for the Greek government to trigger the deal’s “collective action clauses,” which allow it to force the remaining 10 percent of the creditors to go along with the deal (that is, hold them down for that barbering).

Wall Street had another up day on Thursday, especially after word that the Greek bond swap went well. The Dow Jones Industrial Average gained 70.61 points, or 0.55 percent, while the S&P 500 and the Nasdaq were up 0.98 percent and 1.18 percent, respectively.