February 2012 U.S. Economic Fundamentals
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The housing recovery that wasn't
FORTUNE -- Over the past few months, a spate of good news about the U.S. housing market has led some to think a recovery is finally on the horizon.
The evidence is compelling. It now costs almost as much to rent as buy. Since the housing bubble burst in 2006, home prices have fallen by 33% nationwide -- more than they did during the Great Depression. Waves of foreclosures and tighter lending standards have helped drive a surge in rentals. And during the third quarter, the median monthly mortgage payment totaled $698 compared to the median monthly asking rent of $700, according to Capital Economics, citing data from the National Association of Realtors and the Census Bureau. What's more, the cost of borrowing has fallen to record lows, with interest rates for 30-year fixed rate mortgages hovering around 4%.
Read the full article here.
FORTUNE -- Over the past few months, a spate of good news about the U.S. housing market has led some to think a recovery is finally on the horizon.
The evidence is compelling. It now costs almost as much to rent as buy. Since the housing bubble burst in 2006, home prices have fallen by 33% nationwide -- more than they did during the Great Depression. Waves of foreclosures and tighter lending standards have helped drive a surge in rentals. And during the third quarter, the median monthly mortgage payment totaled $698 compared to the median monthly asking rent of $700, according to Capital Economics, citing data from the National Association of Realtors and the Census Bureau. What's more, the cost of borrowing has fallen to record lows, with interest rates for 30-year fixed rate mortgages hovering around 4%.
Read the full article here.
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Dropping out of search may skew U.S. jobs data
As U.S. policy makers fret about their high jobless rate, attention is increasingly turning to another troubling aspect of the labour market: A growing number of people are dropping out.
The Labour Department is expected to report on Friday that the jobless rate held steady at 8.5 per cent in January, according to the median view of Wall Street analysts, down from 9.4 per cent in December, 2010.
Read the full article here.
As U.S. policy makers fret about their high jobless rate, attention is increasingly turning to another troubling aspect of the labour market: A growing number of people are dropping out.
The Labour Department is expected to report on Friday that the jobless rate held steady at 8.5 per cent in January, according to the median view of Wall Street analysts, down from 9.4 per cent in December, 2010.
Read the full article here.
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Economist Shiller on the crosscurrents in U.S. housing
Housing was at the start and heart of the U.S. and global financial crisis and recession. So it makes sense to many that a strong and sustained U.S. economic recovery needs at least stable housing prices after a long period of price declines.
Some recent data may be encouraging, but still you `just can`t tell` if that data really are indicative of a housing turning point, said Yale University Economics Professor Robert Shiller, who is, among other things, a noted expert in the field.
Housing permits and the National Association of Home Builders` housing market index have recently turned up, although they are still at low levels, said Shiller in an interview on the sidelines of the World Economic Forum annual meeting here in Davos, Switzerland.
Read the full article here.
Housing was at the start and heart of the U.S. and global financial crisis and recession. So it makes sense to many that a strong and sustained U.S. economic recovery needs at least stable housing prices after a long period of price declines.
Some recent data may be encouraging, but still you `just can`t tell` if that data really are indicative of a housing turning point, said Yale University Economics Professor Robert Shiller, who is, among other things, a noted expert in the field.
Housing permits and the National Association of Home Builders` housing market index have recently turned up, although they are still at low levels, said Shiller in an interview on the sidelines of the World Economic Forum annual meeting here in Davos, Switzerland.
Read the full article here.
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Fannie and Freddie don't deserve blame for bubble
There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren`t among them.
The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.
Read the full article here.
There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren`t among them.
The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.
Read the full article here.
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Flroida is the nation's housing market
Kolko, a housing economist and co-author (with Edward Glaeser) of the uber-influential study "Consumer City," is now chief economist at Trulia, a real estate insights website. Kolko posits that the state of Florida is the perfect microcosm of the nation's ongoing housing problems, and that the GOP primary is bringing the issue into the political limelight ` a place it is likely to occupy in the general election as well. (For a range of views on how to "fix" the housing problem, see this edition of The New York Times' Room for Debate).
Kolko's argument hinges on a couple of key points. First, Florida was more or less "ground zero" for America's housing crisis: at the worst of it, average home prices declined there 40 percent or more off their peak. Second, the state is overrun by foreclosures: it currently has the highest rate of foreclosed loans (14 percent) in the country. That's double that of Nevada (6.3 percent) and four times higher than Arizona, California, and Michigan. That said, people are starting to buy houses in Florida again. He cites Trulia's Metro Movers Index, which shows increased house-hunting activity in North Port-Bradenton-Sarasota, Fort Lauderdale, Cape Coral, and West Palm Beach. Additionally, prices have increased more than 2 percent in the third quarter of 2011 in West Palm Beach, Fort Lauderdale and several other Florida metros.
Read the full article here.
Kolko, a housing economist and co-author (with Edward Glaeser) of the uber-influential study "Consumer City," is now chief economist at Trulia, a real estate insights website. Kolko posits that the state of Florida is the perfect microcosm of the nation's ongoing housing problems, and that the GOP primary is bringing the issue into the political limelight ` a place it is likely to occupy in the general election as well. (For a range of views on how to "fix" the housing problem, see this edition of The New York Times' Room for Debate).
Kolko's argument hinges on a couple of key points. First, Florida was more or less "ground zero" for America's housing crisis: at the worst of it, average home prices declined there 40 percent or more off their peak. Second, the state is overrun by foreclosures: it currently has the highest rate of foreclosed loans (14 percent) in the country. That's double that of Nevada (6.3 percent) and four times higher than Arizona, California, and Michigan. That said, people are starting to buy houses in Florida again. He cites Trulia's Metro Movers Index, which shows increased house-hunting activity in North Port-Bradenton-Sarasota, Fort Lauderdale, Cape Coral, and West Palm Beach. Additionally, prices have increased more than 2 percent in the third quarter of 2011 in West Palm Beach, Fort Lauderdale and several other Florida metros.
Read the full article here.
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A look at Case-Shiller by Metro area
See data from the 20 metro areas Case-Shiller tracks, sortable by name, level, monthly change and year-over-year change -- just click the column headers to re-sort. The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market
See the statistics here.
See data from the 20 metro areas Case-Shiller tracks, sortable by name, level, monthly change and year-over-year change -- just click the column headers to re-sort. The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market
See the statistics here.
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Home prices continued to decline in November 2011 according to S&P/Case-Shiller home price indices
Data through November 2011, released today by S&P Indices for its S&P/Case-Shiller
1 Home Price Indices, the leading measure of U.S. home prices, showed declines of 1.3`% for both the 10- and 20-City Composites in November over October. For a second consecutive month, 19 of the 20 cities covered by the indices also saw home prices decrease. The 10- and 20-City Composites posted annual returns of -3.6% and -3.7% versus November 2010, respectively. These are worse than the -3.2% and -3.4% respective rates reported for October. In addition to both Composites, 13 of the 20 MSAs saw their annual returns decrease compared to October`s data. New York and Tampa saw no change in annual returns in November; while Charlotte, Cleveland, Denver, Minneapolis and Phoenix saw their annual rates improve. At -11.8% Atlanta continued to post the lowest annual return. Detroit and Washington DC were the only two cities to post positive annual returns of +3.8% and +0.5%, respectively, in November. While positive, both cities saw these annual rates fall versus October`s data.
Read the full article here.
Data through November 2011, released today by S&P Indices for its S&P/Case-Shiller
1 Home Price Indices, the leading measure of U.S. home prices, showed declines of 1.3`% for both the 10- and 20-City Composites in November over October. For a second consecutive month, 19 of the 20 cities covered by the indices also saw home prices decrease. The 10- and 20-City Composites posted annual returns of -3.6% and -3.7% versus November 2010, respectively. These are worse than the -3.2% and -3.4% respective rates reported for October. In addition to both Composites, 13 of the 20 MSAs saw their annual returns decrease compared to October`s data. New York and Tampa saw no change in annual returns in November; while Charlotte, Cleveland, Denver, Minneapolis and Phoenix saw their annual rates improve. At -11.8% Atlanta continued to post the lowest annual return. Detroit and Washington DC were the only two cities to post positive annual returns of +3.8% and +0.5%, respectively, in November. While positive, both cities saw these annual rates fall versus October`s data.
Read the full article here.
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Manufacturer's news releases list of top U.S. cities by number of industrial jobs
EVANSTON, Ill., Jan. 30, 2012 /PRNewswire/ -- Manufacturers' News, Inc., compiler and publisher of industrial directories for all fifty states, has generated a list of the top U.S. cities by number of manufacturing jobs as of January 1st, 2012. The full list can be seen here.
According to Manufacturers' News, Houston takes the top spot for industrial employment with 235,038 manufacturing jobs, up 2.9% over last year. New York ranks second with 140,952 jobs, up 1.3%. Third-ranked Chicago accounts for 107,264, down 1.3%, while St. Louis accounts for 80,795, down 2.8%. Los Angeles accounts for the fifth-most at 79,873 jobs, down 4.5%.
Read the full article here.
EVANSTON, Ill., Jan. 30, 2012 /PRNewswire/ -- Manufacturers' News, Inc., compiler and publisher of industrial directories for all fifty states, has generated a list of the top U.S. cities by number of manufacturing jobs as of January 1st, 2012. The full list can be seen here.
According to Manufacturers' News, Houston takes the top spot for industrial employment with 235,038 manufacturing jobs, up 2.9% over last year. New York ranks second with 140,952 jobs, up 1.3%. Third-ranked Chicago accounts for 107,264, down 1.3%, while St. Louis accounts for 80,795, down 2.8%. Los Angeles accounts for the fifth-most at 79,873 jobs, down 4.5%.
Read the full article here.
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Home prices dropped in November in most U.S. cities
U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.
Prices dropped in November from October in 19 of the 20 cities tracked, according to the Standard & Poor's/Case-Shiller home-price index released Tuesday.
Read the full article here.
U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.
Prices dropped in November from October in 19 of the 20 cities tracked, according to the Standard & Poor's/Case-Shiller home-price index released Tuesday.
Read the full article here.
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U.S. incomes rise while consumer spending flat
Americans' income rose in December by the most in nine months, a hopeful sign for the economy after a year of weak wage gains. But consumers didn't spend any more than they had in November.
Americans ended up saving all their additional income. Economists noted that income rose last month largely because of strong hiring. The economy added 200,000 jobs in December. More jobs mean more income available to spend.
The best hope for the economy is further job gains. On Friday, the government is expected to report another solid month of hiring for January.
Read the full article here.
Americans' income rose in December by the most in nine months, a hopeful sign for the economy after a year of weak wage gains. But consumers didn't spend any more than they had in November.
Americans ended up saving all their additional income. Economists noted that income rose last month largely because of strong hiring. The economy added 200,000 jobs in December. More jobs mean more income available to spend.
The best hope for the economy is further job gains. On Friday, the government is expected to report another solid month of hiring for January.
Read the full article here.
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U.S. manufacturing picks up, but private job gains slow
The pace of growth in the U.S. manufacturing sector rose in January to its highest level in seven months, though a measure of employment faded and private-sector employers added fewer jobs than expected, data showed Wednesday.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.1, from a revised 53.1 the month before, and was the highest level since June 2011. It fell just short of expectations for 54.5.
The private sector added 170,000 jobs last month, the ADP National Employment Report showed, shy of economists' expectations for a gain of 185,000 jobs.
Read the full article here.
The pace of growth in the U.S. manufacturing sector rose in January to its highest level in seven months, though a measure of employment faded and private-sector employers added fewer jobs than expected, data showed Wednesday.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.1, from a revised 53.1 the month before, and was the highest level since June 2011. It fell just short of expectations for 54.5.
The private sector added 170,000 jobs last month, the ADP National Employment Report showed, shy of economists' expectations for a gain of 185,000 jobs.
Read the full article here.
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Why job growth in the U.S. is outpacing Canada
The release of Canadian and U.S. job numbers suggests Canada's economy has stalled, while its American counterpart seems to be gaining momentum.
According to figures released on Friday, the Canadian economy added only 2,300 jobs in January. In comparison, the U.S. added 243,000 jobs, the most since April and May 2010.
One reason for the disparity is simply that the U.S., hit harder by the economic downturn, has more ground to make up than Canada.
Read the full article here.
The release of Canadian and U.S. job numbers suggests Canada's economy has stalled, while its American counterpart seems to be gaining momentum.
According to figures released on Friday, the Canadian economy added only 2,300 jobs in January. In comparison, the U.S. added 243,000 jobs, the most since April and May 2010.
One reason for the disparity is simply that the U.S., hit harder by the economic downturn, has more ground to make up than Canada.
Read the full article here.
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U.S. employers added 243,000 jobs in January
Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.
"This is a very positive employment report from almost any angle," said Brian Bethune, an economics professor at Amherst College.
The report seemed certain to shake up the presidential campaign, which is expected to turn on the economy. The unemployment rate is the lowest since February 2009, one month after President Barack Obama took office.
Read the full article here.
Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.
"This is a very positive employment report from almost any angle," said Brian Bethune, an economics professor at Amherst College.
The report seemed certain to shake up the presidential campaign, which is expected to turn on the economy. The unemployment rate is the lowest since February 2009, one month after President Barack Obama took office.
Read the full article here.
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U.S. employers added 243,000 jobs in January, pushing unemployment rate down to 8.3%
Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.
`This is a very positive employment report from almost any angle,` said Brian Bethune, an economics professor at Amherst College.
The report seemed certain to shake up the presidential campaign, which is expected to turn on the economy. The unemployment rate is the lowest since February 2009, one month after President Barack Obama took office.
Read the full article here.
Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.
`This is a very positive employment report from almost any angle,` said Brian Bethune, an economics professor at Amherst College.
The report seemed certain to shake up the presidential campaign, which is expected to turn on the economy. The unemployment rate is the lowest since February 2009, one month after President Barack Obama took office.
Read the full article here.
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6 things that could derail the economic rally
Will it last?
That's the key question on the minds of Wall Street investors, Main Street workers, and this year's presidential candidates as they ponder the latest upbeat news on the economy.
On the surface, a long-awaited economic recovery finally seems to be growing roots. The latest jobs report showed a respectable pace of hiring and a net gain in jobs for the 16[sup]th[/sup] month in a row. The stock market started 2012 with a nifty 7 percent gain that brought it back to the levels of mid-2008, before the financial meltdown. Manufacturing output is picking up. Car sales have been growing steadily and are approaching prerecession levels. All of that is making consumers more optimistic. "There are hints that a virtuous circle may be building where employment, incomes, and consumer spending move up together," forecasting firm IHS Global Insight recently advised its clients.
Read the full article here.
Will it last?
That's the key question on the minds of Wall Street investors, Main Street workers, and this year's presidential candidates as they ponder the latest upbeat news on the economy.
On the surface, a long-awaited economic recovery finally seems to be growing roots. The latest jobs report showed a respectable pace of hiring and a net gain in jobs for the 16[sup]th[/sup] month in a row. The stock market started 2012 with a nifty 7 percent gain that brought it back to the levels of mid-2008, before the financial meltdown. Manufacturing output is picking up. Car sales have been growing steadily and are approaching prerecession levels. All of that is making consumers more optimistic. "There are hints that a virtuous circle may be building where employment, incomes, and consumer spending move up together," forecasting firm IHS Global Insight recently advised its clients.
Read the full article here.
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U.S. jobless claims brighten labour market picture
WASHINGTON ` The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting recent gains in employment are being sustained.
Initial claims for state unemployment benefits dropped 15,000 to 358,000, the Labor Department said on Thursday. A four-week average of new filings, which provides a better view of the trend, hit its lowest level since April 2008.
The decline in claims, which defied economists` forecasts for a rise to 370,000, pointed to building strength in the labour market and raised the odds of another solid increase in employment this month.
Read the full article here.
WASHINGTON ` The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting recent gains in employment are being sustained.
Initial claims for state unemployment benefits dropped 15,000 to 358,000, the Labor Department said on Thursday. A four-week average of new filings, which provides a better view of the trend, hit its lowest level since April 2008.
The decline in claims, which defied economists` forecasts for a rise to 370,000, pointed to building strength in the labour market and raised the odds of another solid increase in employment this month.
Read the full article here.
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U.S. job market gains traction
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly fell last week, a government report showed on Thursday, further evidence the labour market was gaining traction.
Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 358,000, the labour Department said. The prior week`s figure was revised up to 373,000 from the previously reported 367,000.
Economists polled by Reuters had forecast claims rising to 370,000. The four-week moving average for new claims, seen as a better measure of labour market trends, fell 11,000 to 366,250 ` the lowest level since April 2008.
Read the full article here.
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly fell last week, a government report showed on Thursday, further evidence the labour market was gaining traction.
Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 358,000, the labour Department said. The prior week`s figure was revised up to 373,000 from the previously reported 367,000.
Economists polled by Reuters had forecast claims rising to 370,000. The four-week moving average for new claims, seen as a better measure of labour market trends, fell 11,000 to 366,250 ` the lowest level since April 2008.
Read the full article here.
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U.S. jobless claim drops to almost 4-year low
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly fell last week to a near four-year low, a government report showed on Thursday, suggesting the labour market was finally strengthening.
Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said, the lowest since March 2008. The prior week`s figure was revised up to 361,000 from the previously reported 358,000.
Economists polled by Reuters had forecast claims rising to 365,000. The four-week moving average for new claims, seen as a better measure of labor market trends, fell 1,750 to 365,250 ` the lowest since April 2008.
Read the full article here.
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly fell last week to a near four-year low, a government report showed on Thursday, suggesting the labour market was finally strengthening.
Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said, the lowest since March 2008. The prior week`s figure was revised up to 361,000 from the previously reported 358,000.
Economists polled by Reuters had forecast claims rising to 365,000. The four-week moving average for new claims, seen as a better measure of labor market trends, fell 1,750 to 365,250 ` the lowest since April 2008.
Read the full article here.
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Stronger job market could boost U.S. economy further
SHINGTON (AP) ` The healthier job market that's lifted the U.S. economy in recent months shows no signs of slowing.
Applications for unemployment aid are near a four-year low, raising expectations of further hiring gains. The news Thursday helped catapult the Dow Jones industrial average to its highest close since May 2008.
More jobs and tame inflation are giving consumers more buying power. Their higher spending could further boost growth and lower the unemployment rate for February for a sixth straight month.
Read the full article here.
SHINGTON (AP) ` The healthier job market that's lifted the U.S. economy in recent months shows no signs of slowing.
Applications for unemployment aid are near a four-year low, raising expectations of further hiring gains. The news Thursday helped catapult the Dow Jones industrial average to its highest close since May 2008.
More jobs and tame inflation are giving consumers more buying power. Their higher spending could further boost growth and lower the unemployment rate for February for a sixth straight month.
Read the full article here.