December 2011 U.S. Economic Fundamentals
- Thread starter Ally
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U.S. jobless benefit applications fell for fourth time in 5 weeks, a sign hiring may improve
WASHINGTON - The number of Americans applying for unemployment benefits fell last week to the lowest level since early April, a sign that layoffs are easing and hiring may pick up.
Weekly applications dropped by 5,000 to a seasonally adjusted 388,000, the Labor Department said Thursday. It was the fourth decline in five weeks.
The four-week average, a less volatile measure, dropped to 396,750. That's the first time the average been below 400,000 in seven months.
Applications need to consistently drop below 375,000 to signal sustained job gains. They haven't been that low since February.
Read the full article here.
WASHINGTON - The number of Americans applying for unemployment benefits fell last week to the lowest level since early April, a sign that layoffs are easing and hiring may pick up.
Weekly applications dropped by 5,000 to a seasonally adjusted 388,000, the Labor Department said Thursday. It was the fourth decline in five weeks.
The four-week average, a less volatile measure, dropped to 396,750. That's the first time the average been below 400,000 in seven months.
Applications need to consistently drop below 375,000 to signal sustained job gains. They haven't been that low since February.
Read the full article here.
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U.S. new home sales rise
New home sales in the US rose by 1.3 percent in October to an annualized rate of 307,000 units, extending the recovery begun in September after four consecutive months of decreases, authorities said Monday.
Nevertheless, the increase was less than what analysts had expected, having forecast for October an annualized rate of between 310,000 and 320,000 units.
In addition, the Commerce Department revised downward the figure for sales of new homes in September from the 313,000 units initially reported to 303,000.
Despite the comparatively good figures for September and October, the market is still far from the 700,000 sales that experts say are needed to maintain a strong real estate market.
Read the full article here.
New home sales in the US rose by 1.3 percent in October to an annualized rate of 307,000 units, extending the recovery begun in September after four consecutive months of decreases, authorities said Monday.
Nevertheless, the increase was less than what analysts had expected, having forecast for October an annualized rate of between 310,000 and 320,000 units.
In addition, the Commerce Department revised downward the figure for sales of new homes in September from the 313,000 units initially reported to 303,000.
Despite the comparatively good figures for September and October, the market is still far from the 700,000 sales that experts say are needed to maintain a strong real estate market.
Read the full article here.
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Americans in November more confident about economy
NEW YORK, N.Y. - Americans' confidence in the economy in November bounced back to its highest level since July, the latest sign that they are beginning to feel more cheerful about spending during the holiday shopping season.
The Conference Board, a private research firm, says Tuesday that its consumer confidence index rose 15 points to 56.0. That's up from a revised 40.9 in October ` the lowest level since the recession ` and the biggest jump since the 59.2 reading in July. The November number is encouraging, but far below the reading of 90, which indicates an economy on solid footing.
Read the full article here.
NEW YORK, N.Y. - Americans' confidence in the economy in November bounced back to its highest level since July, the latest sign that they are beginning to feel more cheerful about spending during the holiday shopping season.
The Conference Board, a private research firm, says Tuesday that its consumer confidence index rose 15 points to 56.0. That's up from a revised 40.9 in October ` the lowest level since the recession ` and the biggest jump since the 59.2 reading in July. The November number is encouraging, but far below the reading of 90, which indicates an economy on solid footing.
Read the full article here.
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Another byproduct of the U.S. housing crisis: Pot grow-ops
The housing crisis in the United States has led to an alarming number of foreclosures. Recently, however, it has given rise to another kind of trend: indoor marijuana grow-ops.
Police in several American cities have recently uncovered a number of such operations in empty houses that have been slated for foreclosure.
Read the full article here.
The housing crisis in the United States has led to an alarming number of foreclosures. Recently, however, it has given rise to another kind of trend: indoor marijuana grow-ops.
Police in several American cities have recently uncovered a number of such operations in empty houses that have been slated for foreclosure.
Read the full article here.
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What will debt deal defeat mean for America?
WASHINGTON ` The failure of a congressional deficit-cutting `super committee` means the tough work of putting the United States` finances on a stable path will likely have to wait until 2013 at the earliest.
Barring some unforeseen development, the Republican and Democratic co-chairs of the committee are due to issue a joint statement on Monday conceding defeat in their three-month search for a debt deal, aides told Reuters on Sunday.
With the intensifying 2012 election campaign stoking already bitter partisanship in Washington, the U.S. Congress will be hard-pressed to reform expensive government benefit programs and an archaic tax code that are seen as the keys to improving the country`s fiscal health.
Read the full article here.
WASHINGTON ` The failure of a congressional deficit-cutting `super committee` means the tough work of putting the United States` finances on a stable path will likely have to wait until 2013 at the earliest.
Barring some unforeseen development, the Republican and Democratic co-chairs of the committee are due to issue a joint statement on Monday conceding defeat in their three-month search for a debt deal, aides told Reuters on Sunday.
With the intensifying 2012 election campaign stoking already bitter partisanship in Washington, the U.S. Congress will be hard-pressed to reform expensive government benefit programs and an archaic tax code that are seen as the keys to improving the country`s fiscal health.
Read the full article here.
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The scariest jobs chart ever
Today's jobs report was a mixed bag.
We'd break it down into three key ideas:
All that being said, the jobs recovery remains pretty mediocre, and that's best exemplified by this monthly chart from Calculated Risk, which we've dubbed the scariest jobs chart over.
The basic idea: All of the recessions are compared from their start date, with each line looking at the collapse in unemployment and subsequent recovery.
Read the full article here.
Today's jobs report was a mixed bag.
We'd break it down into three key ideas:
- Headline jobs growth of 120K was a bit disappointing.
- However, when added with past upward revisions, it was still pretty solid.
The unemployment rate nicely dropped from 9% to 8.6%, but there was a pretty big exodus of workers from the workforce, so that distorted the number a bit.
All that being said, the jobs recovery remains pretty mediocre, and that's best exemplified by this monthly chart from Calculated Risk, which we've dubbed the scariest jobs chart over.
The basic idea: All of the recessions are compared from their start date, with each line looking at the collapse in unemployment and subsequent recovery.
Read the full article here.
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For jobless, little hope of restoring better days
People across the working spectrum suffered job losses in recent years: bricklayers and bookkeepers as well as workers in manufacturing and marketing.
Readers` Comments
But only a select few workers have fully regained their footing during the slow recovery.
Katie O`Brien Mowery is one of the lucky ones. After losing her job in the marketing department of a luxury resort in Santa Barbara, Calif., in early 2010, she eventually found a position with better benefits and the promise of a brighter future.
Read the full article here.
People across the working spectrum suffered job losses in recent years: bricklayers and bookkeepers as well as workers in manufacturing and marketing.
Readers` Comments
But only a select few workers have fully regained their footing during the slow recovery.
Katie O`Brien Mowery is one of the lucky ones. After losing her job in the marketing department of a luxury resort in Santa Barbara, Calif., in early 2010, she eventually found a position with better benefits and the promise of a brighter future.
Read the full article here.
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U.S. jobless rate drops as many give up job search
The U.S. unemployment rate fell last month to its lowest level in more than 2Â years, as a mild increase in hiring was met by an even larger increase in the number of people who simply gave up.
The Labor Department says the unemployment rate dropped sharply to 8.6 per cent last month, down from 9 per cent in October. The rate hasn't been that low since March 2009, during the depths of the recession.
Employers added 120,000 jobs last month. And the previous two months were revised up to show that 72,000 more jobs had been added ` the fourth straight month the government revised prior months higher.
Read the full article here.
The U.S. unemployment rate fell last month to its lowest level in more than 2Â years, as a mild increase in hiring was met by an even larger increase in the number of people who simply gave up.
The Labor Department says the unemployment rate dropped sharply to 8.6 per cent last month, down from 9 per cent in October. The rate hasn't been that low since March 2009, during the depths of the recession.
Employers added 120,000 jobs last month. And the previous two months were revised up to show that 72,000 more jobs had been added ` the fourth straight month the government revised prior months higher.
Read the full article here.
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10 hard facts on the U.S. housing market
Re/Max National Housing report for November 2011 is out. They studied 53 metropolitans across the country across several categories including prices, inventory, sales figures, etc.
`It appears that home sales are coming more closely in line with the levels
we saw last year, which should hold up through the winter months,` said
Margaret Kelly, CEO of RE/MAX, LLC. `While it`s good to see sales still
running higher than last year, at some point we would like to see prices
rising higher than the previous year, as well.`
Read the ful article here.
Re/Max National Housing report for November 2011 is out. They studied 53 metropolitans across the country across several categories including prices, inventory, sales figures, etc.
`It appears that home sales are coming more closely in line with the levels
we saw last year, which should hold up through the winter months,` said
Margaret Kelly, CEO of RE/MAX, LLC. `While it`s good to see sales still
running higher than last year, at some point we would like to see prices
rising higher than the previous year, as well.`
Read the ful article here.
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Foreclosure crisis isn't even halfway over: Study
The foreclosure crisis has had a long and destructive run ` five years and counting, with millions put out of their homes. According to the Center for Responsible Lending (CRL), we`re not even halfway through the devastation.
The organization`s analysis of 27 million mortgage loans originated over a five-year period found that 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk.
The study also offers up evidence that foreclosure patterns are strongly linked with patterns of risky lending. According to CRL, foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash, such as loans with prepayment penalties, hybrid adjustable-rate mortgages (ARMs), and option ARMs.
Read the full article here.
The foreclosure crisis has had a long and destructive run ` five years and counting, with millions put out of their homes. According to the Center for Responsible Lending (CRL), we`re not even halfway through the devastation.
The organization`s analysis of 27 million mortgage loans originated over a five-year period found that 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk.
The study also offers up evidence that foreclosure patterns are strongly linked with patterns of risky lending. According to CRL, foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash, such as loans with prepayment penalties, hybrid adjustable-rate mortgages (ARMs), and option ARMs.
Read the full article here.
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Two big housing risks that investors are ignoring
We've noticed a lot of investors getting positive on housing recently. In fact, housing is cited as the driver for the UBS economic team's rosy 2012 forecast. While we don't dispute that recent economic data has been better than feared, we take significant exception to the idea that housing is poised for smooth sailing. Here we present two risk factors looming large in our outlook but virtually unnoticed among investors: the 2012 election and the prospect for significant disruption to the current housing finance system.
The amount of political risk in the housing market is currently large and underappreciated. The FHA's share of mortgage purchase volume is just under 40%, while Fannie and Freddie combined have an almost 60% market share, leaving a sliver (less than 5%) for the private lenders.
Read the full article here.
We've noticed a lot of investors getting positive on housing recently. In fact, housing is cited as the driver for the UBS economic team's rosy 2012 forecast. While we don't dispute that recent economic data has been better than feared, we take significant exception to the idea that housing is poised for smooth sailing. Here we present two risk factors looming large in our outlook but virtually unnoticed among investors: the 2012 election and the prospect for significant disruption to the current housing finance system.
The amount of political risk in the housing market is currently large and underappreciated. The FHA's share of mortgage purchase volume is just under 40%, while Fannie and Freddie combined have an almost 60% market share, leaving a sliver (less than 5%) for the private lenders.
Read the full article here.
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Comments on the employment-population ratio
Yesterday someone sent me a column from John Mauldin that had the following graph. The graph shows the BLS Employment-population ratio, 16 years and older, and based on the trend, the author is expecting the employment-population ratio to rise to 65% in 2020.
I think this forecast is incorrect - and this gives me a chance to discuss the participation rate and employment-population ratio.
The employment-population ratio really increased in the '70s and '80s for two reasons: 1) favorable demographics as the baby boom generation moved into their prime working years, and 2) a rising participation rate for women. But that trend was about to change even if there hadn't been a severe recession.
Read the full article here.
Yesterday someone sent me a column from John Mauldin that had the following graph. The graph shows the BLS Employment-population ratio, 16 years and older, and based on the trend, the author is expecting the employment-population ratio to rise to 65% in 2020.
I think this forecast is incorrect - and this gives me a chance to discuss the participation rate and employment-population ratio.
The employment-population ratio really increased in the '70s and '80s for two reasons: 1) favorable demographics as the baby boom generation moved into their prime working years, and 2) a rising participation rate for women. But that trend was about to change even if there hadn't been a severe recession.
Read the full article here.
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The King of all Vegas real estate scams
Before the market crashed and home prices tumbled, before federal investigators showed up and hauled away the community records, before her property managers pled guilty for conspiring to rig neighborhood elections, and before her real estate lawyer allegedly tried to commit suicide by overdosing on drugs and setting fire to her home, Wanda Murray thought that buying a condominium in Las Vegas was a pretty good idea.
At first glance, Murray doesn`t look much like the type of person who would arrive in Las Vegas only to get tangled up in and eventually help unravel a complex criminal conspiracy. At 65, she stares out at the world through thick glasses. She is legally blind. Her eyes never quite seem to focus on any one thing. On a recent Friday morning, she sits at her dining room table wearing a zip-up leopard-print sweatshirt and recounts how she helped to foil a group of lawyers and contractors running amok in Sin City. `They didn`t think there would be four old ladies who wouldn`t put up with their stuff,` says Murray. `They really pissed me off.`
Read the full article here.
Before the market crashed and home prices tumbled, before federal investigators showed up and hauled away the community records, before her property managers pled guilty for conspiring to rig neighborhood elections, and before her real estate lawyer allegedly tried to commit suicide by overdosing on drugs and setting fire to her home, Wanda Murray thought that buying a condominium in Las Vegas was a pretty good idea.
At first glance, Murray doesn`t look much like the type of person who would arrive in Las Vegas only to get tangled up in and eventually help unravel a complex criminal conspiracy. At 65, she stares out at the world through thick glasses. She is legally blind. Her eyes never quite seem to focus on any one thing. On a recent Friday morning, she sits at her dining room table wearing a zip-up leopard-print sweatshirt and recounts how she helped to foil a group of lawyers and contractors running amok in Sin City. `They didn`t think there would be four old ladies who wouldn`t put up with their stuff,` says Murray. `They really pissed me off.`
Read the full article here.
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California demographic shift: More people leaving than moving in
For a clue to why California is losing its allure as a place to settle down, just ask Jennifer McCluer, who moved out of California in 2007 after she obtained her license in skin care.
Unable to afford Orange County's sky-high rents, she opted for Portland, Ore. "A big motivator was that I lived with roommate after roommate after roommate," said McCluer, 30. "Friends said you could probably live on your own up here. The rent was a huge deal for me."
Read the full article here.
For a clue to why California is losing its allure as a place to settle down, just ask Jennifer McCluer, who moved out of California in 2007 after she obtained her license in skin care.
Unable to afford Orange County's sky-high rents, she opted for Portland, Ore. "A big motivator was that I lived with roommate after roommate after roommate," said McCluer, 30. "Friends said you could probably live on your own up here. The rent was a huge deal for me."
Read the full article here.
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Can snowbirds save the U.S. sunshine states?
Sarasota resident Marvin Boisvert couldn`t help but feel a little torn this week as he shivered in a Florida hockey arena, watching the Maple Leafs trounce the Tampa Bay Lightning.
The transplanted Canadian felt it was best to not say a word, given all the Floridian fans around him.
`It`s a strange feeling to be at a hockey game down here. There was lots of cheering for Toronto, but I had to be careful,` Boisvert chuckles.
Read the full article here.
Sarasota resident Marvin Boisvert couldn`t help but feel a little torn this week as he shivered in a Florida hockey arena, watching the Maple Leafs trounce the Tampa Bay Lightning.
The transplanted Canadian felt it was best to not say a word, given all the Floridian fans around him.
`It`s a strange feeling to be at a hockey game down here. There was lots of cheering for Toronto, but I had to be careful,` Boisvert chuckles.
Read the full article here.
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Peering into 2012, Freddie Mac Economist makes five market predictions
As we soon close out a bumpy U.S. housing market ride in 2011, Freddie Mac's chief economist Frank Nothaft is now making five housing market predictions for 2012.
Nothaft tells the World Property Channel, "While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly. Sustained and increased job growth beyond the average monthly payroll gains of 130,000 so far this year ending in November are essential. In housing, look for the rental market to lead the way and for some improvement in the single-family space in parts of the country. All told, next year will be another bumpy ride."
Read the full article here.
As we soon close out a bumpy U.S. housing market ride in 2011, Freddie Mac's chief economist Frank Nothaft is now making five housing market predictions for 2012.
Nothaft tells the World Property Channel, "While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly. Sustained and increased job growth beyond the average monthly payroll gains of 130,000 so far this year ending in November are essential. In housing, look for the rental market to lead the way and for some improvement in the single-family space in parts of the country. All told, next year will be another bumpy ride."
Read the full article here.
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Corrected data to show real U.S. housing market
The National Association of Realtors (NAR) revealed that data on existing home sales from 2007 through October 2011 will now be revised downward because of double counting.
U.S. bloggers who have been critical of the NAR for years jumped in to criticize the NAR this week after the announcement, questioning whether it was an honest mistake.
`Perhaps they were nefarious and just incompetent. Neither alternative speaks highly of them,` writes one blogger, in a post on the Irvine Housing Blog.
The NAR will revise its data next week, blaming a benchmarking exercise that listed some homes twice and in some instances, new homes were also captured.
Read the full article here.
The National Association of Realtors (NAR) revealed that data on existing home sales from 2007 through October 2011 will now be revised downward because of double counting.
U.S. bloggers who have been critical of the NAR for years jumped in to criticize the NAR this week after the announcement, questioning whether it was an honest mistake.
`Perhaps they were nefarious and just incompetent. Neither alternative speaks highly of them,` writes one blogger, in a post on the Irvine Housing Blog.
The NAR will revise its data next week, blaming a benchmarking exercise that listed some homes twice and in some instances, new homes were also captured.
Read the full article here.
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Labour shortage looms in Newfoundland and Labrador
Rinaldo Stefan has a tough challenge as he manages construction of Vale SA`sVale SA`s (VALE-N21.270.763.71%) sprawling, $3-billion nickel processor on Placentia Bay: finding enough skilled workers to complete the job on time and on budget.
Mr. Stefan must find 1,500 welders, electricians, plumbers and other workers by next summer, on top of the 2,000 already on the job at the site. But due to a shortage of available skilled tradespeople in Newfoundland and Labrador, Mr. Stefan is now in a mad scramble to fill the positions, placing advertisements across Atlantic Canada to entice qualified workers.
Read the full article here.
Rinaldo Stefan has a tough challenge as he manages construction of Vale SA`sVale SA`s (VALE-N21.270.763.71%) sprawling, $3-billion nickel processor on Placentia Bay: finding enough skilled workers to complete the job on time and on budget.
Mr. Stefan must find 1,500 welders, electricians, plumbers and other workers by next summer, on top of the 2,000 already on the job at the site. But due to a shortage of available skilled tradespeople in Newfoundland and Labrador, Mr. Stefan is now in a mad scramble to fill the positions, placing advertisements across Atlantic Canada to entice qualified workers.
Read the full article here.