Market Conditions - May 15, 2006 by Carla L. Davis
Experts have noted for years that local economies are directly related to the states of their local real estate market. So what do massive layoffs spell for certain cities? Whirlpool announced last week that it will be cutting 4,500 jobs (5.6 percent of company's workforce) in its plants in Newton, Iowa; Herrin, Ill.; Searcy, Ark; Clyde, Ohio, and Marion, Ohio. This announcement comes not even a year after motor giant GM annouced that it would be cutting 25,000 workers (17 percent of company's workforce). And for the 16th time, the Federal Reserve has raised short term interest rates to 5 percent -- an action which had a noticeable effect on the stock market. Reports indicate that the Dow Jones lost .2 percent just minutes afterwards, while the Nasdaq dropped .8 percent. What this all will end up spelling is dependent on too many factors to give a definite answer. The economy needs to remain strong in order for the real estate market to remain strong. If consumers continue spending, then jobs will be created and prices will increase. The Fed seems positive, noting, "Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices." | 
