March 2012 U.S. Economic Fundamentals
- Thread starter Ally
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Does this really look like a U.S. housing recovery?
There have been numerous media stories out over the last couple of weeks about the recovery, at long last, in housing. Of course, this is the same housing bottom call that we heard in 2009, 2010 and 2011. So why not drag it out again for 2012? Eventually, the call will be right, and they will be anointed with oils and proclaimed to be the gurus who called the bottom. In the financial world you only have to be right once.
However, back on earth, where things really matter, housing is a major contributing component to long-term economic recovery. Each dollar sunk into new housing construction has a large multiplier effect on the overall economy. No economic recovery in history has started without housing leading the way. So, yes, housing is really just that important, and we should all want it to recover and soon. The calls for a bottom in housing now, however, may be a bit premature, as I will explain.
Read the full article here.
There have been numerous media stories out over the last couple of weeks about the recovery, at long last, in housing. Of course, this is the same housing bottom call that we heard in 2009, 2010 and 2011. So why not drag it out again for 2012? Eventually, the call will be right, and they will be anointed with oils and proclaimed to be the gurus who called the bottom. In the financial world you only have to be right once.
However, back on earth, where things really matter, housing is a major contributing component to long-term economic recovery. Each dollar sunk into new housing construction has a large multiplier effect on the overall economy. No economic recovery in history has started without housing leading the way. So, yes, housing is really just that important, and we should all want it to recover and soon. The calls for a bottom in housing now, however, may be a bit premature, as I will explain.
Read the full article here.
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The two things that have really held back the U.S. recovery
A brand new paper (.pdf) by economists Michael E. Feroli (JPMorgan), Ethan S. Harris (BofA), Amir Sufi (University of Chicago), and Kenneth D. West (University of Wisconsin) takes a hard look at housing, and the impact housing has had on the recovery.
As part of the project, the group decided to break down the recovery into various component parts, comparing it to past recoveries.
Read the full article here.
A brand new paper (.pdf) by economists Michael E. Feroli (JPMorgan), Ethan S. Harris (BofA), Amir Sufi (University of Chicago), and Kenneth D. West (University of Wisconsin) takes a hard look at housing, and the impact housing has had on the recovery.
As part of the project, the group decided to break down the recovery into various component parts, comparing it to past recoveries.
Read the full article here.
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Here's the U.S. energy outlook from now to 2035
Natural gas prices were weak through 2011. However, the long-run expectation is for prices to rise.
The EIA's Annual Energy Outlook 2012 shows that natural gas production is expected to outstrip demand around 2022.
We drew on the report to pull out projections for natural gas, crude oil, and U.S. energy consumption leading up to 2035.
Read the full article here.
Natural gas prices were weak through 2011. However, the long-run expectation is for prices to rise.
The EIA's Annual Energy Outlook 2012 shows that natural gas production is expected to outstrip demand around 2022.
We drew on the report to pull out projections for natural gas, crude oil, and U.S. energy consumption leading up to 2035.
Read the full article here.
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U.S. job market 'far from normal'
WASHINGTON ` The U.S. economy would have to strengthen to ensure that the unacceptably high jobless rate keeps dropping, Federal Reserve Chairman Ben Bernanke said on Wednesday, suggesting the option of further Fed bond buying remains on the table.
`The job market is far from normal,` Bernanke told a congressional panel. `Continued improvement ` is likely to require stronger growth in final demand and production.`
The swift decline in the U.S. unemployment rate in recent months, to a three-year low of 8.3% in January from 9.1% in August, has surprised economists both within and outside the Fed given the economy`s relatively soft performance.
Read the full article here.
WASHINGTON ` The U.S. economy would have to strengthen to ensure that the unacceptably high jobless rate keeps dropping, Federal Reserve Chairman Ben Bernanke said on Wednesday, suggesting the option of further Fed bond buying remains on the table.
`The job market is far from normal,` Bernanke told a congressional panel. `Continued improvement ` is likely to require stronger growth in final demand and production.`
The swift decline in the U.S. unemployment rate in recent months, to a three-year low of 8.3% in January from 9.1% in August, has surprised economists both within and outside the Fed given the economy`s relatively soft performance.
Read the full article here.
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U.S. housing prices decline more than forecast
Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.
The S&P/Case-Shiller index of property values in 20 cities declined 3.7 percent from November 2010 after decreasing 3.4 percent in the year ended in October, the group said today in New York. Economists projected a 3.3 percent drop, according to the median estimate in a Bloomberg News survey.
Another wave of foreclosures threatens to keep the pressure on prices and delay recovery in the industry that precipitated the last recession, underscoring the Federal Reserve`s view that housing `remains depressed.` More stability in real-estate values may be needed to persuade Americans to take advantage of record-low mortgage rates.
Read the full article here.
Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.
The S&P/Case-Shiller index of property values in 20 cities declined 3.7 percent from November 2010 after decreasing 3.4 percent in the year ended in October, the group said today in New York. Economists projected a 3.3 percent drop, according to the median estimate in a Bloomberg News survey.
Another wave of foreclosures threatens to keep the pressure on prices and delay recovery in the industry that precipitated the last recession, underscoring the Federal Reserve`s view that housing `remains depressed.` More stability in real-estate values may be needed to persuade Americans to take advantage of record-low mortgage rates.
Read the full article here.
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Investors hope U.S. can crank out third month of job gains
TORONTO - Tired stock markets could find the impetus for another leg up this week if the American job market can manage a third, straight month of job gains in excess of 200,000.
"That`s not an overstatement at all," said Andrew Pyle, investment adviser with Scotia McLeod in Peterborough, Ont., adding that a continuing improvement in the number of people applying for jobless insurance suggests the economy can pull off another 200,000-plus number.
Rising employment in the U.S. spells good news for Canada as a stronger American economy will create more demand for Canadian exports such as oil, metals and manufactured goods.
Read the full article here.
TORONTO - Tired stock markets could find the impetus for another leg up this week if the American job market can manage a third, straight month of job gains in excess of 200,000.
"That`s not an overstatement at all," said Andrew Pyle, investment adviser with Scotia McLeod in Peterborough, Ont., adding that a continuing improvement in the number of people applying for jobless insurance suggests the economy can pull off another 200,000-plus number.
Rising employment in the U.S. spells good news for Canada as a stronger American economy will create more demand for Canadian exports such as oil, metals and manufactured goods.
Read the full article here.
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Job gains bolster U.S.
Companies in the U.S. added more workers in February than a month earlier, another sign of labour market strength, data from a private report based on payrolls showed Wednesday.
Employment increased by 216,000 for the month after a revised 173,000 gain in January, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 215,000 increase this month.
Read the full article here.
Companies in the U.S. added more workers in February than a month earlier, another sign of labour market strength, data from a private report based on payrolls showed Wednesday.
Employment increased by 216,000 for the month after a revised 173,000 gain in January, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 215,000 increase this month.
Read the full article here.
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U.S. jobless claims up more than expected
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly rose last week, a government report showed on Thursday, but not enough to change perceptions that the labor market was strengthening.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 362,000, the Labor Department said. The prior week`s figure was revised up to 354,000 from the previously reported 351,000. Even with the increases, claims are still near their lowest in four years.
Economists polled by Reuters had forecast claims unchanged at 351,000 last week. The four-week moving average for new claims, considered a better measure of labor market trends, edged up 250 to 355,000 ` still near a four-year low.
Read the full article here.
WASHINGTON ` New U.S. claims for unemployment benefits unexpectedly rose last week, a government report showed on Thursday, but not enough to change perceptions that the labor market was strengthening.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 362,000, the Labor Department said. The prior week`s figure was revised up to 354,000 from the previously reported 351,000. Even with the increases, claims are still near their lowest in four years.
Economists polled by Reuters had forecast claims unchanged at 351,000 last week. The four-week moving average for new claims, considered a better measure of labor market trends, edged up 250 to 355,000 ` still near a four-year low.
Read the full article here.
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U.S. weekly jobless claims rise 8,000 to 362,000
WASHINGTON (MarketWatch) - Jobless claims in the U.S. rose to the highest level in five weeks, climbing by 8,000 to a seasonally adjusted 362,000, the Labor Department said Thursday. Economists surveyed by MarketWatch had estimated claims would rise to 355,000 in the week ended March 3. Claims from two weeks ago were revised up to 354,000 from 351,000. The four-week average of claims, meanwhile, rose by a scant 250 to 355,000.
Read the full article here.
WASHINGTON (MarketWatch) - Jobless claims in the U.S. rose to the highest level in five weeks, climbing by 8,000 to a seasonally adjusted 362,000, the Labor Department said Thursday. Economists surveyed by MarketWatch had estimated claims would rise to 355,000 in the week ended March 3. Claims from two weeks ago were revised up to 354,000 from 351,000. The four-week average of claims, meanwhile, rose by a scant 250 to 355,000.
Read the full article here.
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U.S. jobless claims rise, but trend still encouraging
The number of Americans filing for jobless benefits unexpectedly rose last week, but not enough to change perceptions that the labor market was strengthening.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 362,000, the Labor Department said on Thursday.
Even with the increase, claims are still near their lowest in four years, and have dropped about 40,000 since the beginning of the year. The four-week moving average, considered a better measure of labor market trends, edged up 250 to 355,000.
Read the full article here.
The number of Americans filing for jobless benefits unexpectedly rose last week, but not enough to change perceptions that the labor market was strengthening.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 362,000, the Labor Department said on Thursday.
Even with the increase, claims are still near their lowest in four years, and have dropped about 40,000 since the beginning of the year. The four-week moving average, considered a better measure of labor market trends, edged up 250 to 355,000.
Read the full article here.
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U.S. Senate blocks forced Keystone approval
WASHINGTON: TransCanada`s Keystone XL pipeline has been denied a lifeline thrown to it by congressional Republicans after the US Senate narrowly rejected their attempts to bypass the White House and force the immediate approval of the controversial project.
A total of 56 senators voted Thursday in favour of the measure inserted into a bigger highway bill, four short of the 60 needed for approval. Eleven Democrats were among those who wanted the pipeline to move forward as quickly as possible.
Republican support of the proposal was unanimous, but some Democrats were said to have wavered in their opposition after former president Bill Clinton threw his support behind the $7.6 billion pipeline in remarks to an energy conference last week.
Read the full article here.
WASHINGTON: TransCanada`s Keystone XL pipeline has been denied a lifeline thrown to it by congressional Republicans after the US Senate narrowly rejected their attempts to bypass the White House and force the immediate approval of the controversial project.
A total of 56 senators voted Thursday in favour of the measure inserted into a bigger highway bill, four short of the 60 needed for approval. Eleven Democrats were among those who wanted the pipeline to move forward as quickly as possible.
Republican support of the proposal was unanimous, but some Democrats were said to have wavered in their opposition after former president Bill Clinton threw his support behind the $7.6 billion pipeline in remarks to an energy conference last week.
Read the full article here.
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U.S. jobs market shows more signs of strength
WASHINGTON . U.S. employers added more than 200,000 workers to their payrolls for a third straight month in February, a sign the economy was strengthening and in less need of further monetary stimulus from the U.S. Federal Reserve.
The report from the U.S. Labor Department on Friday, which showed non-farm payrolls increased 227,000 last month, also bolstered President Barack Obama's chances for re-election.
Read the full article here.
WASHINGTON . U.S. employers added more than 200,000 workers to their payrolls for a third straight month in February, a sign the economy was strengthening and in less need of further monetary stimulus from the U.S. Federal Reserve.
The report from the U.S. Labor Department on Friday, which showed non-farm payrolls increased 227,000 last month, also bolstered President Barack Obama's chances for re-election.
Read the full article here.
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Why oil prices are hurting Europe more than the U.S.
The world is presently sharing a limited supply of oil. When oil prices rise, oil production doesn`t rise very much, if at all.
The issues then become: Which buyers get the oil? What users get priced out of the market? Which countries are disproportionately affected?
Read the full article here.
The world is presently sharing a limited supply of oil. When oil prices rise, oil production doesn`t rise very much, if at all.
The issues then become: Which buyers get the oil? What users get priced out of the market? Which countries are disproportionately affected?
Read the full article here.
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Republicans won't like it, but why Obama will release stockpiled oil anyways
Look for President Barack Obama to order a significant release of oil from the Strategic Petroleum Reserve, the emergency stockpile held by the federal government. At most, it may trigger a short-lived drop in today's high gasoline prices. But Obama is battling history: Since Richard Nixon, gas prices have snuck up and startled otherwise occupied presidents, and led them into a flurry of actions that, while usually ineffective, have the virtue of making them look like they are doing something. Now is Obama's turn at the rite.
In a news conference yesterday, Interior Secretary Ken Salazar reached further into the past, noting that "all the way back to 1857, but bring it into the post-World War II era, you see the price shocks for both oil and gas that have occurred in this country and the different responses that are made." Salazar might have added that this vexing malady has afflicted not just U.S. leaders, but presidents and prime ministers around the world, most recently Nigerian President Goodluck Jonathan (and, pictured above, British Prime Minister David Cameron).
Read the full article here.
Look for President Barack Obama to order a significant release of oil from the Strategic Petroleum Reserve, the emergency stockpile held by the federal government. At most, it may trigger a short-lived drop in today's high gasoline prices. But Obama is battling history: Since Richard Nixon, gas prices have snuck up and startled otherwise occupied presidents, and led them into a flurry of actions that, while usually ineffective, have the virtue of making them look like they are doing something. Now is Obama's turn at the rite.
In a news conference yesterday, Interior Secretary Ken Salazar reached further into the past, noting that "all the way back to 1857, but bring it into the post-World War II era, you see the price shocks for both oil and gas that have occurred in this country and the different responses that are made." Salazar might have added that this vexing malady has afflicted not just U.S. leaders, but presidents and prime ministers around the world, most recently Nigerian President Goodluck Jonathan (and, pictured above, British Prime Minister David Cameron).
Read the full article here.
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New law has stalled, not stifled, housing forclosures
Banks have stopped filing new foreclosure notices in Nevada, but that doesn`t mean the housing crisis has passed.
In fact, bankers say a new law that took effect in October has put bank foreclosures on hold and is preventing the Las Vegas housing market from finally hitting bottom and `returning to normal,` Bill Uffelman, president of the Nevada Bankers Association, said.
Assembly Bill 284 requires that before banks start foreclosure, they must first file a signed affidavit in which an individual attests to firsthand knowledge of the documents. Bad actors can face felony charges. Under prior laws, such violations were a misdemeanor.
Read the full article here.
Banks have stopped filing new foreclosure notices in Nevada, but that doesn`t mean the housing crisis has passed.
In fact, bankers say a new law that took effect in October has put bank foreclosures on hold and is preventing the Las Vegas housing market from finally hitting bottom and `returning to normal,` Bill Uffelman, president of the Nevada Bankers Association, said.
Assembly Bill 284 requires that before banks start foreclosure, they must first file a signed affidavit in which an individual attests to firsthand knowledge of the documents. Bad actors can face felony charges. Under prior laws, such violations were a misdemeanor.
Read the full article here.
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U.S. jobless claims fall, manufacturing holds up
But the impact of higher oil prices also was starting to be seen in data on Thursday. Producer prices racked up their biggest increase in five months in February, while manufacturers in New York state reported a surge in input costs in March.
The recent gains in oil and gasoline prices have raised concerns the higher costs could start to squeeze businesses and consumers and put a dent in the recovery.
Still, producer prices last month did not rise as much as economists had expected, and underlying inflation pressures were contained.
Read the full article here.
But the impact of higher oil prices also was starting to be seen in data on Thursday. Producer prices racked up their biggest increase in five months in February, while manufacturers in New York state reported a surge in input costs in March.
The recent gains in oil and gasoline prices have raised concerns the higher costs could start to squeeze businesses and consumers and put a dent in the recovery.
Still, producer prices last month did not rise as much as economists had expected, and underlying inflation pressures were contained.
Read the full article here.
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The worst of all worlds
America`s economy is a mosaic of puzzles and contradictions that has economists and bloggers scrambling for explanations and scrutinizing the data for quirks and flaws. Lately, I`ve been thinking dark thoughts: what if all it takes is a single explanation that assumes all the data are correct?
The first puzzle: why is GDP growing so slowly? Since the recession ended, growth has averaged 2.5%, roughly around its pre-recession trend-rate, which means no progress closing the massive gap between actual and potential output that opened over the course of the recession. We know recoveries are weaker after financial crises but they are still supposed to be recoveries, i.e. the output gap should close, albeit slowly.
Read the full article here.
America`s economy is a mosaic of puzzles and contradictions that has economists and bloggers scrambling for explanations and scrutinizing the data for quirks and flaws. Lately, I`ve been thinking dark thoughts: what if all it takes is a single explanation that assumes all the data are correct?
The first puzzle: why is GDP growing so slowly? Since the recession ended, growth has averaged 2.5%, roughly around its pre-recession trend-rate, which means no progress closing the massive gap between actual and potential output that opened over the course of the recession. We know recoveries are weaker after financial crises but they are still supposed to be recoveries, i.e. the output gap should close, albeit slowly.
Read the full article here.
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California: A bad bet for business
In its most recent annual ranking of `business friendly` states, Forbes magazine had some blunt advice for investors: `Utah and Colorado have maintained strong business climates. Forget about California.`
Californians like to dismiss such assessments of the Golden State and instead point to its natural beauty and quality of life. They tend not to worry what people in other states think. But they should. California is no longer the economic miracle it once was. Silicon Valley no longer has a monopoly on high-tech talent and innovation. Hollywood has to compete for movie locations with Utah and Morocco. Real estate investors see better development prospects in states with fewer foreclosed and abandoned homes. And SoCal porn producers know they don`t need huge wardrobe containers to move to Nevada.
Read the full article here.
In its most recent annual ranking of `business friendly` states, Forbes magazine had some blunt advice for investors: `Utah and Colorado have maintained strong business climates. Forget about California.`
Californians like to dismiss such assessments of the Golden State and instead point to its natural beauty and quality of life. They tend not to worry what people in other states think. But they should. California is no longer the economic miracle it once was. Silicon Valley no longer has a monopoly on high-tech talent and innovation. Hollywood has to compete for movie locations with Utah and Morocco. Real estate investors see better development prospects in states with fewer foreclosed and abandoned homes. And SoCal porn producers know they don`t need huge wardrobe containers to move to Nevada.
Read the full article here.
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Interest reviving in hard-hit U.S. housing market
EDMONTON - On the surface at least, the brutal crash in the U.S. housing market, which began six long years ago, shows few signs of abating.
But some industry players say early signs of a rebound are emerging, as U.S. housing inventories shrink and job growth picks up.
`We think we`re probably past the bottom now,` says Ralph Young, CEO of Edmonton-based Melcor Developments, which has roughly doubled its U.S. property holdings over the past year.
Read the full article here.
EDMONTON - On the surface at least, the brutal crash in the U.S. housing market, which began six long years ago, shows few signs of abating.
But some industry players say early signs of a rebound are emerging, as U.S. housing inventories shrink and job growth picks up.
`We think we`re probably past the bottom now,` says Ralph Young, CEO of Edmonton-based Melcor Developments, which has roughly doubled its U.S. property holdings over the past year.
Read the full article here.