After an unexpected rise the week prior in the unemployment rate to 9.8 percent, some economists were surprised when the Labor Department reported last week that new jobless claims fell by 17,000.

According to the New York Times, "job creation is expected to receive a lift from a compromise deal struck by the Obama administration and Republican lawmakers [last] Monday to maintain all Bush-era tax cuts through 2012, extend emergency unemployment benefits and cut employee payroll taxes by 2 percentage points."

These tax cuts include a wide array of credits and deductions that could help reduce the burden felt in nearly all households.

Jobs, however, are essential to our economic recovery. And Federal Reserve Chairman Ben Bernanke reports we may be years from having normal unemployment again. Normal unemployment ranges from 5 to 6 percent. The economy, he says, is growing at an annual pace of around 2.5 percent – too slow of rate to reduce unemployment.

Unfortunately, the National Association of Business Economics reports that GDP projections for 2011 remain sub-par. Concerns over the federal deficit and unemployment continue to chip away at consumer confidence. And while spending is up 2.5 percent over last year, this year’s holiday retail sales are still weak.

This is part of the reason that the industry leaders are such strong proponents for Obama's Deficit Commission saving the mortgage interest deduction (MID). The National Association of Home Builders has now added their support, saying, "The consequences [of threatening the deduction] would be devastating for home owners, the housing market and the nation’s economy.” Supporters believe this deduction is a needed incentive to bring buyers to the market once again.

Published: December 13, 2010

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Carla Hill, M.A., works on the Realty Times staff as Managing Editor for our online publication. She also is Producer for the real estate news channel, seen daily on RealtyTimes.com and on video newsletters nationwide.