San Diego's Job Recovery Strengthens

Submitted by Rich Toscano on April 16, 2011 - 10:28am
March was good to San Diego's job market, according to the Employment Development Department's latest estimates. 

San Diego employment was estimated to have risen by .8 percent for the month, which the following chart shows is actually fairly brisk for recent times:



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Submitted by Rich Toscano on April 16, 2011 - 10:28am.

I suspect that this update will raise the hackles of the more bearishly inclined, but the data is the data (you can take issue with the BLS' estimate methodology, but there are other indicators of economic recovery flashing as well).

For a long time I've been saying (more at my other site than here) that if you throw enough stimulus and easy money at an economy, it will at least create some kind of temporary increase in economic activity. Many uber-bears seem bent on denying that this increase is taking place, but it clearly is. However, acknowledging the reality of the (admittedly weak) recovery does not mean that I think that we are out of the woods. In fact I am fairly convinced that a major crisis is coming as a result of our over-indebtedness and lax monetary policy. But that could be a ways off, and between now and then, it is of little analytical benefit to deny that the assorted stimuli are having an economic effect.

Submitted by Rich Toscano on April 17, 2011 - 11:09am.

As predicted, last night I received an email from a Voice reader informing me, among other things, of the following:

- I am a f***ing idiot
- I am a Keynesian c***sucker
- I am a dips**t
- I am an establishment c***sucker
- I am being bribed to write this s**t
- I am a b**ch who wouldn't have a job if it weren't for the Fed
- I have never worked a day in my life

It was kind of hard to tell, what with all the bad spelling and grammar mistakes, but I don't think this guy is a fan.

In any case, this is the semi-literate version of the type of thought process I was talking about in my comment above.

Submitted by AN on April 17, 2011 - 11:32am.

Rich, what kind of name calling did you get around 2004-2005 by the permabulls?

Submitted by Rich Toscano on April 17, 2011 - 12:35pm.

Haha, AN, I got lots of hate mail back then (not just 04-05... the bulls kept at it well into 2007). It was usually entailed the following:

- Making arguments that I had already debunked in the very article to which they were responding,
- Asking why I was too stupid not to understand those arguments
- Informing me that I was just bitter because I couldn't afford to buy (apparently I was the only one in town who couldn't qualify for a 0-down neg-am loan)
- Generally being very angry

Good times!

This year I've managed to receive hate mail from both permabears and permabulls. That's the sweet spot!

Submitted by poorgradstudent on April 17, 2011 - 3:47pm.

Rich, I'm pretty stunned that you get hate mail, considering your approach is generally just to post data and let it speak for itself. From my own job search (Biotech industry) and knowing what my wife's company (Tech sector) is doing I can anecdotally say things are definitely improving in non-bubble sectors. Plus, is it really that controversial to say employment is significantly better than it was this time a year ago? Things were TERRIBLE a year ago and still aren't amazing, but it really has gone from "there are no jobs" to "there are a few jobs and quite a bit of competition".

Submitted by Rich Toscano on April 17, 2011 - 4:04pm.

poorgradstudent wrote:
Rich, I'm pretty stunned that you get hate mail, considering your approach is generally just to post data and let it speak for itself. From my own job search (Biotech industry) and knowing what my wife's company (Tech sector) is doing I can anecdotally say things are definitely improving in non-bubble sectors. Plus, is it really that controversial to say employment is significantly better than it was this time a year ago? Things were TERRIBLE a year ago and still aren't amazing, but it really has gone from "there are no jobs" to "there are a few jobs and quite a bit of competition".

Well, that's just Keynesian c***sucker talk.

Just kidding, thanks for the anecdotal data. Most of my friends are in tech and I hear similar things from them as well.

Submitted by CricketOnTheHearth on April 17, 2011 - 7:50pm.

General Atomics' UAV division (based in Poway) just had a job fair this Friday/Saturday and I have been hearing anecdotally from acquaintances there for months that they are hiring like mad. (As a matter of fact, they have been hiring like mad for years.)

That said, I had trepidations about throwing my lot in with them as the governments (of various countries, now) are their main customers and we all know how financially sound the government is :P
As pointed out by a coworker who is a Navy veteran, if the contract gets pulled, beaucoup people land on the street.

On a different topic, I do feel that 6X/7X annual pay for the price of a dwelling is excessive; it is far beyond the recommended 3X annual pay and I frankly don't see how a homeloaner can reasonably carry that unless they take a magic mortgage or receive an inheritance that allows them to put 80% down. So 6X/7X annual pay may be the historical average for San Diego house prices, but I disagree with you that it is "reasonable" (if I have undersood your previous comments about "reasonableness" aright).

Submitted by Rich Toscano on April 17, 2011 - 8:23pm.

You're comparing apples and oranges by comparing these two ratios:

1. countywide median home price / countywide per capita income

2. the house you buy / your household income

Those are two totally different numbers that don't bear comparing, for many reasons.

My definition of "reasonable" is "in line with the historical relationship with fundamentals (those fundamentals being rents and incomes)." By that definition, prices -- in aggregate, mind you -- are reasonable. I don't see much to disagree with there. If you want to use your own definition of "reasonable" that's fine by me, but when I talk about reasonableness I am not addressing subjective definitions of the word... I am talking about the historical relationship with the fundamentals.

Submitted by AN on April 17, 2011 - 11:59pm.

Rich, I'm not sure if Cricket is comparing apples and oranges. I did a quick run of the ratio of median home price vs median income for a few zip code and I noticed that as the area gets more expensive, the higher the ratio become. Here are a few examples:
92126: $345,000/$87,569 = 3.9x
92129: $492,500/$96,208 = 5.1x
92130: $738,000/$99,315 = 7.4x
92067: $1,718,500/$202,688 = 8.5x

The only logical explanation I can think of is, the more expensive the area, the more $ buyer have as a down payment.

Submitted by Rich Toscano on April 18, 2011 - 8:41am.

AN wrote:
Rich, I'm not sure if Cricket is comparing apples and oranges. I did a quick run of the ratio of median home price vs median income for a few zip code and I noticed that as the area gets more expensive, the higher the ratio become. Here are a few examples:
92126: $345,000/$87,569 = 3.9x
92129: $492,500/$96,208 = 5.1x
92130: $738,000/$99,315 = 7.4x
92067: $1,718,500/$202,688 = 8.5x

The only logical explanation I can think of is, the more expensive the area, the more $ buyer have as a down payment.

Of course that would be the case... but that doesn't mean that its valid to compare the following two numbers:

1. countywide median home price / countywide PER PERSON (including renters and retirees) income

2. the house you buy / YOUR HOUSEHOLD income

They are just two totally different numbers, and the correlation between neighborhood income and expensiveness doesn't change that fact one bit.

I would add that platitudes about 3x your income are complete generalizations anyway... clearly that will vary from market to market and clearly SD will be higher than average. But it doesn't matter, because trying to compare the above two ratios is completely invalid.

Submitted by Hamster on April 18, 2011 - 10:39am.

I can personally attest that Rich has once worked for an honest living (back when we worked together at HP in RB). He was a good enough programmer, although I do appreciate his current work better. Keep up the good work.

Submitted by AN on April 18, 2011 - 11:02am.

Rich Toscano wrote:
[
Of course that would be the case... but that doesn't mean that its valid to compare the following two numbers:

1. countywide median home price / countywide PER PERSON (including renters and retirees) income

2. the house you buy / YOUR HOUSEHOLD income

They are just two totally different numbers, and the correlation between neighborhood income and expensiveness doesn't change that fact one bit.

I would add that platitudes about 3x your income are complete generalizations anyway... clearly that will vary from market to market and clearly SD will be higher than average. But it doesn't matter, because trying to compare the above two ratios is completely invalid.


Rereading your post, I totally agree. Everyone have a choice to be conservative or liberal with their expenditure on their dwelling.

Submitted by Rich Toscano on April 20, 2011 - 2:41pm.

Haha, thanks Hamster... hope you're doing well.

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