Gelinas on the jobs report: It’s the housing market
Putting aside the ill-supported partisan conspiracy theories, how to explain the new jobs report showing unemployment at 7.8 percent?
That number is better than it's been since January 2009 and lower than the politically significant 8.0 threshhold.
I asked Nicole Gelinas, a Manhattan Institute senior fellow who studies economic and fiscal issues, what she made of it.
"People are feeling better," she wrote me in an email. "Consumer spending is up, not just on essentials but on apparel and restaurant meals. People wouldn’t be buying that stuff unless they were feeling better.
"Why are they feeling better? The housing market … People can see that houses on their street are selling for a little bit more than they were last year, and that people are even moving in to foreclosed houses, and they have a feeling they’re through the worst of it.
"Don’t underestimate the accomplishment that a person feels if they think they’ve been through six years of economic hell and have more or less come out of it. This changed psychology, oddly enough, can gradually impact the labor numbers, as even modestly more consumer spending creates more jobs. The general macro picture is that the Chinese slowdown and other global issues could really hurt our manufacturing, but the problem that has dogged us for the past 12 years – the middle-class housing boom and bust – is largely solved."