The Morning Report
Subscribe now. Get smarter tomorrow.
If you haven’t seen it yet, click over to Nerd’s Eye View for a graph Rich Toscano made of last month’s employment numbers.
Toscano points out that the rate has slowed for job losses in construction and finance — real estate-related sectors. They’re still losing jobs, but not as quickly as earlier in 2008. At the same time, the losses are picking up speed in jobs in retail:
The retail sector, in contrast, declined faster on a year-over-year basis in September than it had at any time during the current downturn.
This is not a surprise. Though it was far from the first time we discussed the spillover effect of the housing trouble on the general economy in the pages of voiceofsandiego.org, here’s a story from March 2007 examining the Main Street impacts of the Wall Street subprime mortgage problem, before the contrast between those two streets became so popular (and overdone):
[Chris] Thornberg and other economists have argued vehemently against the notion that trouble in the housing market will not stain the rest of the economy. Their logic: As borrowers stretch to buy a home or homeowners scrimp to make their mortgage payments, they’re less likely to get a new car or buy a bottle of wine with dinner. Many homeowners considered their homes to be seemingly magic equity machines as prices bounded by double-digit percentages for several years. Now, as prices slip, their homes take on a slightly more realistic luster, and those thousands of dollars in their “home ATM” don’t look so appealing, or bona fide.
“The big issue is, what’s going to happen to these people?” Thornberg said. “The market has finally got it that these aren’t good bets. With that kind of pulling back action, that’s going to contribute to a period of slowing, whether it’s a recession or a mild slowdown. With either one, income and jobs are going to take a hit.”
Local economists have acknowledged recently that San Diego is in the throes of a regional recession.