July 2011 U.S. Economic Fundamentals
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Midwest factories roar, but labour market week
The Institute for Supply Management-Chicago said on Thursday that its business barometer jumped to 61.1 after slowing abruptly to 56.6 in May. The gain defied economists' expectations for a drop to 54.
The sturdy factory activity in the automotive-heavy region snapped a string of weak regional manufacturing surveys and raised optimism the economy may start to emerge from the soft patch it became stuck in the first half of the year.
"This may be an indication that we are at least at the bottom of this slowdown, not only in manufacturing but also economic," said Millan Mulraine, senior macro strategist at TD Securities in New York. "In the months ahead we are likely to see a resurgence in growth."
But optimism was tempered somewhat by a separate report from the Labor Department showing initial claims for state unemployment benefits slipped just 1,000 to 428,000 last week. Economists had expected claims to drop to 420,000.
Read the full article here.
The Institute for Supply Management-Chicago said on Thursday that its business barometer jumped to 61.1 after slowing abruptly to 56.6 in May. The gain defied economists' expectations for a drop to 54.
The sturdy factory activity in the automotive-heavy region snapped a string of weak regional manufacturing surveys and raised optimism the economy may start to emerge from the soft patch it became stuck in the first half of the year.
"This may be an indication that we are at least at the bottom of this slowdown, not only in manufacturing but also economic," said Millan Mulraine, senior macro strategist at TD Securities in New York. "In the months ahead we are likely to see a resurgence in growth."
But optimism was tempered somewhat by a separate report from the Labor Department showing initial claims for state unemployment benefits slipped just 1,000 to 428,000 last week. Economists had expected claims to drop to 420,000.
Read the full article here.
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U.S. planned layoffs rise in June
The number of planned layoffs at U.S. firms increased for the second month in a row in June, though downsizing in the first half of the year was at the lowest level since 2000, a report Wednesday showed.
Employers announced 41,432 planned job cuts last month, up 11.6 percent from 37,135 in May, according to the report from consultants Challenger, Gray & Christmas, Inc. Job cuts were up 5.3 percent from 39,358 in June last year.
"The employment picture remains a bit cloudy," John Challenger, chief executive of Challenger, Gray & Christmas, said in a statement.
Read the full article here.
The number of planned layoffs at U.S. firms increased for the second month in a row in June, though downsizing in the first half of the year was at the lowest level since 2000, a report Wednesday showed.
Employers announced 41,432 planned job cuts last month, up 11.6 percent from 37,135 in May, according to the report from consultants Challenger, Gray & Christmas, Inc. Job cuts were up 5.3 percent from 39,358 in June last year.
"The employment picture remains a bit cloudy," John Challenger, chief executive of Challenger, Gray & Christmas, said in a statement.
Read the full article here.
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U.S. job market set for turnaround?
NEW YORK ` U.S. private employers added far more jobs than expected in June, bouncing back from a surprise slump the month before, a report by payrolls processor ADP showed Thursday.
The private sector added 157,000 jobs last month, exceeding expectations for a gain of 68,000, according to a Reuters survey of economists.
May`s figure was revised down to an increase of 36,000 from the previously reported 38,000, which had been an eight-month low.
Read the full article here.
NEW YORK ` U.S. private employers added far more jobs than expected in June, bouncing back from a surprise slump the month before, a report by payrolls processor ADP showed Thursday.
The private sector added 157,000 jobs last month, exceeding expectations for a gain of 68,000, according to a Reuters survey of economists.
May`s figure was revised down to an increase of 36,000 from the previously reported 38,000, which had been an eight-month low.
Read the full article here.
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U.S. job growth grinds to a halt in June
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dousing hopes the economy would regain momentum in the second half of the year.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.
The unemployment rate climbed to a six-month high of 9.2 percent, even as jobseekers left the labor force in droves, from 9.1 percent in May.
"The message on the economy is ongoing stagnation," said Pierre Ellis, senior economist at Decision economics in New York. "Income growth is marginal so there's no indication of momentum.
Read the full article here.
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dousing hopes the economy would regain momentum in the second half of the year.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.
The unemployment rate climbed to a six-month high of 9.2 percent, even as jobseekers left the labor force in droves, from 9.1 percent in May.
"The message on the economy is ongoing stagnation," said Pierre Ellis, senior economist at Decision economics in New York. "Income growth is marginal so there's no indication of momentum.
Read the full article here.
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For U.S. "99ers," jobs crisis is hard to escape
SEWELL, New Jersey - Mary Kay Coyne has just filed what she says is her 1,862nd job application since being thrown out of work three years ago.
She is one of millions of Americans whose unemployment benefits have expired -- after 99 weeks in many states -- as the United States suffers its highest level of long-term unemployment since 1948.
Coyne had to move in with a friend after benefit payments ran out last year. Now she gets by on Medicaid -- U.S. health insurance for the poor -- and food stamps, contributing what little she can to her friend`s household costs.
`You`re 56-years old and you feel like you are sitting on a big pile of nothing,` said Coyne, who spends about four hours a day sending out resumes.
Read the full article here.
SEWELL, New Jersey - Mary Kay Coyne has just filed what she says is her 1,862nd job application since being thrown out of work three years ago.
She is one of millions of Americans whose unemployment benefits have expired -- after 99 weeks in many states -- as the United States suffers its highest level of long-term unemployment since 1948.
Coyne had to move in with a friend after benefit payments ran out last year. Now she gets by on Medicaid -- U.S. health insurance for the poor -- and food stamps, contributing what little she can to her friend`s household costs.
`You`re 56-years old and you feel like you are sitting on a big pile of nothing,` said Coyne, who spends about four hours a day sending out resumes.
Read the full article here.
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Jobs seen boosting hopes of an economic revival
WASHINGTON (Reuters) - U.S. companies probably stepped up hiring in June as the economy recovers from a stumble in recent months, although job growth is not expected to be strong enough to eat into high unemployment.
Nonfarm payrolls are seen having risen by 90,000, according to a Reuters survey conducted last week. In May, employment rose a paltry 54,000.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they now expect gains of anywhere between 125,000 and 175,000.
The private sector will account for all the jobs created, as has been the trend over the last seven months, with layoffs at state and local governments continuing.
Read the full article here.
WASHINGTON (Reuters) - U.S. companies probably stepped up hiring in June as the economy recovers from a stumble in recent months, although job growth is not expected to be strong enough to eat into high unemployment.
Nonfarm payrolls are seen having risen by 90,000, according to a Reuters survey conducted last week. In May, employment rose a paltry 54,000.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they now expect gains of anywhere between 125,000 and 175,000.
The private sector will account for all the jobs created, as has been the trend over the last seven months, with layoffs at state and local governments continuing.
Read the full article here.
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Distressed properties continue to weigh down real estate recovery
The global recession continues to show slow recovery and nowhere is this more evident than in the real estate market. The volume of distressed properties in the market and the lag in clearing these out is certainly a factor that is weighing down real estate recovery.
Distressed properties are those properties that are typically sold below market value due to sellers not being able to maintain servicing their bond repayments.
The RICS (Royal Institution of Chartered Surveyors) Global Distressed Property Monitor Q1 2011, released in June, shows that countries such as Ireland, Spain, the US and South Africa have seen the largest increase in distressed property listings in the first three months of this year. Interestingly, emerging market countries such as Brazil, Russia and China (three of the BRICS countries) seem set to drop from what already were modest figures.
Read the full article here.
The global recession continues to show slow recovery and nowhere is this more evident than in the real estate market. The volume of distressed properties in the market and the lag in clearing these out is certainly a factor that is weighing down real estate recovery.
Distressed properties are those properties that are typically sold below market value due to sellers not being able to maintain servicing their bond repayments.
The RICS (Royal Institution of Chartered Surveyors) Global Distressed Property Monitor Q1 2011, released in June, shows that countries such as Ireland, Spain, the US and South Africa have seen the largest increase in distressed property listings in the first three months of this year. Interestingly, emerging market countries such as Brazil, Russia and China (three of the BRICS countries) seem set to drop from what already were modest figures.
Read the full article here.
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Not a soft patch, but a 'deep ugly swamp'
Here's how things stand as we close out the week: Stocks are ending off on a sour note, more than 14 million Americans are jobless, Washington is no closer to solving its debt fight (not that the Europeans are doing any better), someone is probably on strike somewhere in Greece, and Nouriel Roubini (known in some quarters as Dr. Doom) is warning that the U.S. economy is in "a deep ugly swamp."
I don't know about anybody else, but I'm ready for the weekend.
The day didn't start off that bad.
Canada's jobs report at 7 a.m. was actually upbeat, and then TD warned it couldn't last. Then the U.S. jobs report was horrible.
Read the full article here.
Here's how things stand as we close out the week: Stocks are ending off on a sour note, more than 14 million Americans are jobless, Washington is no closer to solving its debt fight (not that the Europeans are doing any better), someone is probably on strike somewhere in Greece, and Nouriel Roubini (known in some quarters as Dr. Doom) is warning that the U.S. economy is in "a deep ugly swamp."
I don't know about anybody else, but I'm ready for the weekend.
The day didn't start off that bad.
Canada's jobs report at 7 a.m. was actually upbeat, and then TD warned it couldn't last. Then the U.S. jobs report was horrible.
Read the full article here.
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Optimism for U.S. economy slips as job growth stalls
Stock markets were a sea of red on Friday as a dismal report on U.S. job growth snuffed out hopes the American economy was on the mend from a recent slump.
The S&P/TSX composite index joined in a run of losses that extended through the world's major markets, falling 34.30 points, or 0.26 per cent to 13,371.70 at the 4 p.m. close.
Hopes that signs of strong job growth reported Thursday by ADP Employer Services would carry into Friday's U.S. non-farm payroll report were quickly dashed when the U.S. Labor Department reported a mere 18,000 workers had been hired in June, substantially lower than the 105,000 gain economists polled by Bloomberg expected.
Economists used words like "disastrous," and "a shocker" to describe the report.
Read the full article here.
Stock markets were a sea of red on Friday as a dismal report on U.S. job growth snuffed out hopes the American economy was on the mend from a recent slump.
The S&P/TSX composite index joined in a run of losses that extended through the world's major markets, falling 34.30 points, or 0.26 per cent to 13,371.70 at the 4 p.m. close.
Hopes that signs of strong job growth reported Thursday by ADP Employer Services would carry into Friday's U.S. non-farm payroll report were quickly dashed when the U.S. Labor Department reported a mere 18,000 workers had been hired in June, substantially lower than the 105,000 gain economists polled by Bloomberg expected.
Economists used words like "disastrous," and "a shocker" to describe the report.
Read the full article here.
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'QE3 is definitely an option'
Chairman Ben Bernanke conceded Wednesday that the U.S. Federal Reserve could consider additional monetary stimulus if the recent economic weak patch persisted.
The mere hint of a new round of quantitative easing was received by jittery markets like a shot of adrenaline. Equities in Toronto and New York spiked immediately and the price of gold hit a record high, while the recent rally in safe-haven assets eased.
`The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support,` Mr. Bernanke told the U.S. House of Representatives financial services committee.
Read the full article here.
Chairman Ben Bernanke conceded Wednesday that the U.S. Federal Reserve could consider additional monetary stimulus if the recent economic weak patch persisted.
The mere hint of a new round of quantitative easing was received by jittery markets like a shot of adrenaline. Equities in Toronto and New York spiked immediately and the price of gold hit a record high, while the recent rally in safe-haven assets eased.
`The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support,` Mr. Bernanke told the U.S. House of Representatives financial services committee.
Read the full article here.
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Destroying yourself from within
If America falls, it will not be from external enemies. It will be by her own hand. That is the inescapable conclusion one carries away from a reading of Reckless Endangerment, an account of the ferocious financial crisis that exploded in 2008 and through which, to this very day, the United States is still struggling to find safe and solid ground. It surely isn't over yet. Witness the current tussle between the White House and the Republicans on whether or not to "raise the debt ceiling," which is already over the incomprehensible level of $14-trillion.
First, a note about Reckless Endangerment's authors. They are, respectively, Gretchen Morgenson, a Pulitzer Prizewinning New York Times business reporter, and Joshua Rosner, a financial analyst -solidly competent and authoritative both. Reckless Endangerment does not come, in other words, out of the wild territory of hyper-partisanship or the backwaters of conspiracism.
Any person with a regard for the United States, or with some surviving faith in the virtues of representative democracy, will finish this book severely angry. It's a good game to play, should you start to read it, to keep count of the number of times you lay the book down in exasperated wonder that the American system could have been so twisted, so abused and so turned against itself.
Read the full article here.
If America falls, it will not be from external enemies. It will be by her own hand. That is the inescapable conclusion one carries away from a reading of Reckless Endangerment, an account of the ferocious financial crisis that exploded in 2008 and through which, to this very day, the United States is still struggling to find safe and solid ground. It surely isn't over yet. Witness the current tussle between the White House and the Republicans on whether or not to "raise the debt ceiling," which is already over the incomprehensible level of $14-trillion.
First, a note about Reckless Endangerment's authors. They are, respectively, Gretchen Morgenson, a Pulitzer Prizewinning New York Times business reporter, and Joshua Rosner, a financial analyst -solidly competent and authoritative both. Reckless Endangerment does not come, in other words, out of the wild territory of hyper-partisanship or the backwaters of conspiracism.
Any person with a regard for the United States, or with some surviving faith in the virtues of representative democracy, will finish this book severely angry. It's a good game to play, should you start to read it, to keep count of the number of times you lay the book down in exasperated wonder that the American system could have been so twisted, so abused and so turned against itself.
Read the full article here.
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U.S. housing starts hit 6-month high, permits up
Groundbreaking for U.S. homes scaled a six-month high in June, partly reflecting growing demand for rental apartments, a government report showed Tuesday.
The Commerce Department said housing starts increased 14.6 percent to a seasonally adjusted annual rate of 629,000 units, the highest level since January, as ground breaking for multi-family units soared 30.4 percent.
Confronted with plummeting home values, Americans are shunning homeownership, pushing up demand for rentals and helping construction to stabilize.
The report also showed an unexpected increase in building permits and a sturdy gain in the construction of single-family homes. It offered a glimmer of hope for the distressed housing sector, which is struggling under the weight of a glut of for-sale properties and plummeting prices.
Read the full article here.
Groundbreaking for U.S. homes scaled a six-month high in June, partly reflecting growing demand for rental apartments, a government report showed Tuesday.
The Commerce Department said housing starts increased 14.6 percent to a seasonally adjusted annual rate of 629,000 units, the highest level since January, as ground breaking for multi-family units soared 30.4 percent.
Confronted with plummeting home values, Americans are shunning homeownership, pushing up demand for rentals and helping construction to stabilize.
The report also showed an unexpected increase in building permits and a sturdy gain in the construction of single-family homes. It offered a glimmer of hope for the distressed housing sector, which is struggling under the weight of a glut of for-sale properties and plummeting prices.
Read the full article here.
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U.S. jobless claims rise to 418,000
More Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Applications for jobless benefits increased 10,,000 in the week ended July 16 to 418,000, Labor Department figures showed today. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey. The data included about 1,750 additional job cuts due to the Minnesota government shutdown, the agency said.
Employers have been reluctant to hire more workers over the past two months on concern the recovery was slowing and growing unease over stalled negotiations to extend the federal debt ceiling and reduce the budget deficit. Federal Reserve Chairman Ben S. Bernanke last week said recent data showed `continuing weakness` in the labor market.
Read the full article here.
More Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Applications for jobless benefits increased 10,,000 in the week ended July 16 to 418,000, Labor Department figures showed today. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey. The data included about 1,750 additional job cuts due to the Minnesota government shutdown, the agency said.
Employers have been reluctant to hire more workers over the past two months on concern the recovery was slowing and growing unease over stalled negotiations to extend the federal debt ceiling and reduce the budget deficit. Federal Reserve Chairman Ben S. Bernanke last week said recent data showed `continuing weakness` in the labor market.
Read the full article here.
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Buying a house in the U.S.? The IRS wants to know
As the loonie rose along with heat this week, some folks who could summon up the energy in these dog days of summer no doubt would have been thinking about buying a U.S. property. After all, prices have never been more affordable, especially for Canadians. If not now, then when?
According to a recent survey, one in five Canadians is contemplating scooping up one of the almost four million properties that are now for sale in the United States. Of course, there can be a chasm between contemplation and action. But with the loonie at a three-year high and prices in some southern states down more than 50%, legions of Canadians are being tempted.
Read the full article here.
As the loonie rose along with heat this week, some folks who could summon up the energy in these dog days of summer no doubt would have been thinking about buying a U.S. property. After all, prices have never been more affordable, especially for Canadians. If not now, then when?
According to a recent survey, one in five Canadians is contemplating scooping up one of the almost four million properties that are now for sale in the United States. Of course, there can be a chasm between contemplation and action. But with the loonie at a three-year high and prices in some southern states down more than 50%, legions of Canadians are being tempted.
Read the full article here.
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Existing home sales fall 0.8% to seventh-month low
WASHINGTON (MarketWatch) - Sales of existing homes slipped in June to a seven-month low, with a trade group attributing the weak economy and a spike in cancellations for the surprise downturn. The National Association of Realtors on Wednesday reported sales of single-family existing homes fell 0.8% to a seasonally adjusted annual rate of 4.77 million from 4.81 million in May. Economists polled by MarketWatch had anticipated a 4.9 million rate of sales. The data caught economists by surprise in part because pending homes sales had gained 8.2% in May. Lawrence Yun, the chief economist of the NAR, said "a very weak economy [led] to weak sales," and cancellations jumped to 16% from just 4% in May. The NAR also downgraded its 2011 sales projection to 5 million from a range of 5.1 million to 5.2 million. The median existing home price was $184,300, an increase of 0.8% from June 2010.
Read the full article here.
WASHINGTON (MarketWatch) - Sales of existing homes slipped in June to a seven-month low, with a trade group attributing the weak economy and a spike in cancellations for the surprise downturn. The National Association of Realtors on Wednesday reported sales of single-family existing homes fell 0.8% to a seasonally adjusted annual rate of 4.77 million from 4.81 million in May. Economists polled by MarketWatch had anticipated a 4.9 million rate of sales. The data caught economists by surprise in part because pending homes sales had gained 8.2% in May. Lawrence Yun, the chief economist of the NAR, said "a very weak economy [led] to weak sales," and cancellations jumped to 16% from just 4% in May. The NAR also downgraded its 2011 sales projection to 5 million from a range of 5.1 million to 5.2 million. The median existing home price was $184,300, an increase of 0.8% from June 2010.
Read the full article here.
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Israelis no. 2 foreign buyers of U.S. real estate
A skyscraper here, a shopping center there, one acre after another: the Israelis are again buying US real estate. A survey by Bregman Baraz Real Estate commissioned by "Globes" found that Israelis were the second largest foreign buyers of US income-producing real estate in the period from July 2010-June 2011, after Canadians.
Foreign investment accounted for 7.5% of total investment in US income-producing real estate in this period, with Israelis accounting for one tenth of the foreign investment, or 0.75% of total investment in the sector. Israelis invested $1.15 billion to buy 36 income-producing properties in the US over the past 12 months, after the $4.22 billion invested by Canadians, and ahead of the $1.14 billion invested by the Swiss. Total foreign investment was $12.15 billion.
Israel, with a GDP of 1.5% of the GDP of the US, accounts for just a sliver of foreign direct investment in the US, outside real estate. To put it another way, Israel is a small country with a large shadow - proportionally a very large shadow - in the US income-producing real estate market.
Read the full article here.
A skyscraper here, a shopping center there, one acre after another: the Israelis are again buying US real estate. A survey by Bregman Baraz Real Estate commissioned by "Globes" found that Israelis were the second largest foreign buyers of US income-producing real estate in the period from July 2010-June 2011, after Canadians.
Foreign investment accounted for 7.5% of total investment in US income-producing real estate in this period, with Israelis accounting for one tenth of the foreign investment, or 0.75% of total investment in the sector. Israelis invested $1.15 billion to buy 36 income-producing properties in the US over the past 12 months, after the $4.22 billion invested by Canadians, and ahead of the $1.14 billion invested by the Swiss. Total foreign investment was $12.15 billion.
Israel, with a GDP of 1.5% of the GDP of the US, accounts for just a sliver of foreign direct investment in the US, outside real estate. To put it another way, Israel is a small country with a large shadow - proportionally a very large shadow - in the US income-producing real estate market.
Read the full article here.
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U.S. jobless claims rise to 418,000
More Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Applications for jobless benefits increased 10,,000 in the week ended July 16 to 418,000, Labor Department figures showed today. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey. The data included about 1,750 additional job cuts due to the Minnesota government shutdown, the agency said.
Employers have been reluctant to hire more workers over the past two months on concern the recovery was slowing and growing unease over stalled negotiations to extend the federal debt ceiling and reduce the budget deficit. Federal Reserve Chairman Ben S. Bernanke last week said recent data showed `continuing weakness` in the labor market.
Read the full article here.
More Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Applications for jobless benefits increased 10,,000 in the week ended July 16 to 418,000, Labor Department figures showed today. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey. The data included about 1,750 additional job cuts due to the Minnesota government shutdown, the agency said.
Employers have been reluctant to hire more workers over the past two months on concern the recovery was slowing and growing unease over stalled negotiations to extend the federal debt ceiling and reduce the budget deficit. Federal Reserve Chairman Ben S. Bernanke last week said recent data showed `continuing weakness` in the labor market.
Read the full article here.
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Ten questions for those who can't imagine the U.S. defaulting
Global stock markets may be anxious, but they're largely shrugging off fears that U.S. politicians will fail to meet their Aug. 2 deadline to raise the debt ceiling, potentially sparking a credit downgrade and default. Most observers expect politicians will take it to the wire and settle their differences, though the U.S. dollar has been a victim of the uncertainty.
I, too, can't believe that a default, even a short-lived one, is in the cards. But is that because we can't believe it, or can't bring ourselves to believe it, simply because such an event is unfathomable based on history and the might of the United States.
Read the full article here.
Global stock markets may be anxious, but they're largely shrugging off fears that U.S. politicians will fail to meet their Aug. 2 deadline to raise the debt ceiling, potentially sparking a credit downgrade and default. Most observers expect politicians will take it to the wire and settle their differences, though the U.S. dollar has been a victim of the uncertainty.
I, too, can't believe that a default, even a short-lived one, is in the cards. But is that because we can't believe it, or can't bring ourselves to believe it, simply because such an event is unfathomable based on history and the might of the United States.
Read the full article here.