In/Out of the Woods

We’re not out of the woods yet — but things are starting to look familiar.

The unemployment rate in December fell to 8.5 percent, its lowest level in nearly three years, according to a Labor Department report issued earlier this month. The report also showed employers added a net 200,000 jobs last month.

Thanks to those gains, it can be said the economy has had six consecutive months in which 100,000 or more jobs were generated each month, and economists forecast next year will be even better for job gains, which are expected to top 2 million in 2012.

Indeed, there are a growing number of positive signs for the economy, but there’s too much darkness out there to say we’re even nearing the edge of the woods.

Commerce Department retail sales data for December and the full year shows that while sales grew for the year, they grew at the weakest pace in seven months for December at .01 percent, much less than expected.

“Retail sales showed important strength last year, increasing 7.7 percent from 2010 to 2011,” Commerce Secretary John Bryson said in a statement as his office released the Jan. 12 report. “But today’s monthly number is another reminder that our work is far from over. We need to build on the positive economic momentum in the New Year. That means extending the payroll tax cut and unemployment insurance, which will help create jobs, promote economic growth and sustain the recovery.”

And while 2011 gave the nation a breather from foreclosures, it appears as if at the end of the year lenders were finally dealing with some of those delayed foreclosures.

“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets,” said Brandon Moore, chief executive officer of Irvine, Calif.-based real estate tracking firm RealtyTrac. “We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”

That means more foreclosures will be off the books, but more foreclosures may also mean a continued lag in median home prices and more people out of house and home. The problem is particularly bad in the west, with Nevada, Arizona and California leading the nation in foreclosure rates. One-in-16 Nevada housing units had a foreclosure filing in 2011. In Arizona, the rate was one-in-24 and in California one-in-31 housing units had a foreclosure filing during the year.

Let’s just keep looking forward to more signs of better times, and hope we clear the woods soon.