Construction workers build a home in Palo Alto, Calif. A real turnaround seemed to take hold in the housing sector in 2012 after years of fits and starts.
The U.S. added 155,000 new jobs in December, the Labor Department reports. But California and Los Angeles County have been adding jobs at a faster rate than the country as a whole — in an important industry: construction.
Through November, California added jobs at a 1.9 percent pace and L.A. County nearly matched that, at 1.8 percent. The U.S. is adding jobs at a 1.4 percent pace, said Kimberly Ritter-Martinez of the Los Angeles County Economic Development Corporation in an interview after the national jobs report surfaced Friday morning.
For December, the U.S. added 30,000 jobs in construction. That trend could benefit California, where Ritter-Martinez said she’s seeing a looming housing shortage. She expects that a recovering housing market will be a source of growth in 2013. A number of economists and market observers already maintain that there's a housing inventory crunch in California, is driving up prices and inducing homebuilders to start nailing two-by-fours together again.
The Federal Reserve has released it most recent Beige Book, an analysis of economic activity across the nation.
The Federal Reserve has two main jobs: seek price stability in the economy; and engender conditions that lead to full employment, which it defines at something in the 5-6 percent unemployment range. The Fed has other roles, related to it position as the nation's central bank and its control over interest rates. But at its core, the Fed is supposed to keep inflation and unemployment low.
According to the latest Beige Book — national economics research that the Fed puts out eight times a year — the central bank has inflation under control but it isn't seeing unemployment decline significantly. Here's how the Beige Book summary starts out:
Reports from most of the twelve Federal Reserve Districts indicated that overall economic activity continued to expand at a modest to moderate pace in June and early July.
The Federal Reserve in Washington, D.C.
Reports from the twelve Federal Reserve Districts indicated that the economy continued to expand at a modest to moderate pace from mid-February through late March. Activity in the Boston, Atlanta, Chicago, Dallas, and San Francisco Districts grew at a moderate pace, while Cleveland and St. Louis cited modest growth. New York reported that economic growth picked up somewhat. Philadelphia and Richmond cited improving business conditions. The economy in Minneapolis grew at a solid pace and Kansas City's economy expanded at a faster pace.
Hiring was steady or showed a modest increase across many Districts. Difficulty finding qualified workers, especially for high-skilled positions, was frequently reported. Upward pressure on wages was constrained. Overall price inflation was modest. However, contacts in many Districts commented on rising transportation costs due to higher fuel prices.
The most entertaining episode from Federal Reserve Chairman Ben Bernanke's testimony before the House Financial Services Committee this morning came — Surprise! — when Texas Republican and GOP presidential candidate Ron Paul launched into one of his patented long-winded spiels about the evils of the Fed, the senselessness of fiat currencies, and the value of "real" money: silver and gold.
Bernanke took it all in stride. The video above doesn't have reaction shots that are quite as good as this shorter broadcast from ABC, so check them both out. You have to hand it to Bernanke, he seems to enjoy the roastings he gets from Paul, in strange sort of way. And he fires back, ever so gently, at Paul's allegations that we're experiencing 9 percent inflation (according to older pricing measures) when the Bureau of Labor Statistics (BLS) says it's only around 4. (They've been here before.)
Chip Somodevilla/Getty Images
WASHINGTON, DC - FEBRUARY 29: Federal Reserve Bank Board Chairman Ben Bernanke testifies before the House Financial Services Committee on Capitol Hill February 29, 2012 in Washington, DC. Bernanke was testifying about the Fed's Semiannual Monetary Policy Report. (Photo by Chip Somodevilla/Getty Images)
Federal Reserve Chairman Ben Bernanke testified this morning in front of the House Financial Services Committee. Reuters has a nice, brisk summary of his main responses to questioning from members of Congress. There were two very interesting exchanges, resulting in some cryptic replies from Big Ben. Here's the first, on interest rates, which the Fed wants to keep as low as possible through 2014:
It is arguable that interest rates are too high, that they are being constrained by the fact that interest rates can't go below zero. We have an economy where demand falls far short of the capacity of the economy to produce. We have an economy where the amount of investment in durable goods spending is far less than the capacity of the economy to produce. That suggests that interest rates in some sense should be lower rather than higher. We can't make interest rates lower, of course. (They) only can go down to zero. And again I would argue that a healthy economy with good returns is the best way to get returns to savers.