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The latest ANALYTICS Source: Bureau of Labor Statistics number of job "losers" dropped 263,000 in May to 6,147,000, the lowest level since October 2008, suggesting businesses have stopped large-scale layoffs, as the trend in initial unemployment claims indicates. The number of "new entrants" to the unemployment rolls fell 12,000 in May, a college graduation month, suggesting recent graduates were able to find work or have opted to continue their education. The number of persons unemployed for 27 weeks or more—long-term unemployed— increased 4,000 to 4,457,000, the first month-over-month increase since February. The increase in May followed the April increase in the number of individuals unemployed for 15 to 26 weeks. has fallen for three months in a row, which means the new payroll jobs went to individuals previously out of work. The increase in the unemployment rate, which had fallen for three straight months, has added significance with the Federal Reserve having said the target federal funds rate would remain at its historic low, 0 to 0.25 percent, at least until the unemployment rate fell below 6.5 percent. The Fed also set an inflation target for keeping rates low and continuing its program of purchasing mortgage securities and investing in U.S. Treasury securities. Inflation has remained tame since the Fed announced its plans for reversing course on monetary policy. Owning a home is a more practical option than renting, according to study. A little more than half of American renters believe owning a home is a more sensible choice than living in rental housing, according to a research study from Fannie Mae's Economic & Strategic Research Group. To better gauge the future of homeownership and the current shift toward renting, Fannie Mae's National Housing Survey took a look at renter attitudes and preferences in Q3 2012 to get an idea of their aspirations and expectations. According to the findings, the majority of respondents believe renting has its advantages in terms of current finances and stress. When asked which situation would be better for their budget, 57 percent of renters surveyed chose "renting" over "owning," while 52 percent said renting is less stressful. About half of respondents selected "renting" when asked which decision was best given the current economic climate. However, when asked about control, privacy, security, and financial prospects, the vast majority (64 percent and up across each question) said owning is the better choice. Overall, 51 percent of renters think owning is the more sensible choice over renting when comparing both the financial and lifestyle benefits. At 57 percent, young renters (ages 18–34) were more likely to answer that owning is the better choice. Out of those who would prefer to own, many find themselves blocked by a number of hurdles. The most commonly cited problem was a lack of assets; 67 percent of aspiring owners have less than $10,000 in assets. Sixty-five percent said they would have trouble obtaining a mortgage today, while 64 percent felt they just wouldn't have sufficient savings. Though most renters believe they would have trouble getting into the purchase market at this point, many still feel ownership is in their future. Out of those who would prefer to own, 39 percent said they are renting now so they can financially prepare to buy a home. Again, younger renters were more likely to see renting as a stepping stone to owning; 49 percent said they are simply preparing financially. "Many aspiring owners, particularly the younger ones, say they are renting now primarily because they see it as a necessary step to make themselves financially ready to own in the future," said Sarah Shahdad, analyst for the Economic & Strategic Research Group. "The strength of the economy, particularly job creation and real income growth, as well as the favorability of credit conditions should play significant roles in determining if and when many of these renters will see the fruits of their efforts to become homeowners." The M Report | 51 se c on da r y m a r k e t The number of persons unemployed for 27 weeks or more—long-term unemployed— as of the end of May. Renters Still See Value in Homeownership a na ly t ic s $4,457,000 s e r v ic i ng The labor force—the sum of employment and unemployment—rose 420,000 as employment increased 319,000, while unemployment rose 111,000. The number of persons not in the labor force fell 231,000. The labor force participation rate rose 63.4 percent, still low by historic standards. It had been 66 percent before the recession began in December 2007. The current rate is the lowest since December 1978, in part reflecting an increase in school enrollment, which could affect the "available-for-work" test. The number of self-employed individuals dropped 33,000 for the month, while the number of multiple jobholders fell 75,000. The number of multiple jobholders Or ig i nat ion 26,000 jobs, down from its threemonth average of almost 39,000 new jobs per month. The construction sector added 7,000 jobs compared with its average of almost 21,000 new jobs per month for the last three months. The new construction jobs in May reflected increases among "specialty trade contractors," who added 5,800 jobs. There were about 900 new residential construction jobs but 2,600 fewer non-residential construction jobs. Heavy and civil engineering construction jobs increased by 3,100. The financial sector added a net 4,000 jobs but credit intermediation jobs—underwriters—declined by 3,100. Within the unemployment statistics, the report showed the