The Fed may have gotten it right and there are even those who say that the Fed waited too long to raise rates. You’ll always find analysts who take the opposite position on the same situation but there are signs that the economy is in fact picking upsteam and there will no doubt be those who will soon say the Fed needs to raise rates again before the expected spring 2016 FOMC meetings. Here are a few things to consider as you decide whether or not to finance investment property now or later.

According to a Reuters* article, the number of Americans filing for first time unemployment benefits dropped to a 42 year low. That’s right, 42 years. That’s 1973. Richard Nixon was president. According to the article, seasonally adjusted claims dropped to 267,000. Most economists agree that when claims are below 300,000, it’s indicative of a strong labor market and this number has been below 300,000 for 42 weeks. Take this number with a grain of salt as the labor participation rate is at or near record lows and there are fewer in the workplace, but still, this trend can’t be ignored.

Consumer sentiment is also on the rise, this according to the most recent University of Michigan consumer sentiment survey. According to the report, sentiment rose to 92.6, a very healthy reading. The Commerce Department also reported that personal income for the month of November also rose for the eight month in a row. More personal income and higher wages overall will boost consumer spending and we’ll get a gauge on that spending as retailers report December spending as well as consumption in the early stages of 2016. New home sales added to the positive news as new home sales increased by 4.3% in November.**

It’s not hard to see this data points to a stronger economy than some realize and that could provide the Fed with enough information to raise the Fed Funds rate by 0.25% once again, but this time earlier than many had previously expected. As we get into January and review the numbers for this month, we’ll see whether or not these positive trends continue. But so far, they are.

 

* First Time Claims At 42-Year Low  Reuters  12/24/2015

** US New Home Sales Rose 4.3% in November   cnbc.com  12/23/2015