March 2012 U.S. Economic Fundamentals

[Ally]

U.S. home sales disappoint markets




Sales of previously owned U.S. houses unexpectedly fell in February, showing that the real-estate market is taking time to stabilize.




Purchases dropped 0.9% to a 4.59 million annual rate from a revised 4.63 million pace in January that was faster than previously estimated, a report from National Association of Realtors showed today in Washington. The median forecast in a Bloomberg News survey called for a rise to 4.61 million.




The Dow and S&P 500 drifted lower after the data came out, but losses in the Nasdaq were limited by Oracle Corp, which last night beat market expectations.





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[Ally]

Bank of America tests an option to foreclosure






Bank of America Corp. BAC +1.15%is launching a pilot program that will allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.




While the initial scope of the "Mortgage to Lease" program is small`the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York`it represents a big change in the way banks deal with borrowers who can't afford their mortgages.





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[Ally]

U.S. jobless claims at 4-year low





Evidence of an improving job market came in last week, with the number of Americans claiming new state unemployment falling by some 5k to a seasonally adjusted 348k, the lowest since Feb 2008 (according to the Labor Department data released yesterday).





The previous week beat out the Reuters poll of economists slightly, with the upwardly revised 353k falling just short of projections by a thousand. This means that the better benchmark, the four-week moving average for new claims, declined, showing an improving labor market as claims fell 1,250 to 355k.




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[Ally]

Bernanke warns of weakness in U.S. job market




Federal Reserve chairman Ben Bernanke is casting doubt on further substantial improvements in the U.S. employment picture, explaining the central bank`s reluctance to declare the economic recovery is entrenched.




Speaking at an economics conference in Washington on Monday, Mr. Bernanke presented his most detailed argument to date for why U.S. interest rates must stay extremely low for another couple of years ` even though the unemployment rate has dropped to 8.3 per cent in February from 8.9 per cent in October.





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[Ally]

Atlanta is the worst housing market in the country







New data out of Standard & Poor's this morning painted a somewhat mixed picture of the U.S. housing market: showing home prices may have hit bottom.






However one market continues to exhibit strong weakness, falling 2.1 percent during the month and 14.8 percent compared to year-ago levels. The city: Atlanta.






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[Ally]

House prices are now back to early 2003 levels





Today's Case-Shiller House Price index came in a hair better than expectations (falling 3.78% year over year vs. an expected decline of 3.8%), but the bottom line is that the bottom still hasn't been hit.




Prices are now back to early 2003 levels based on the raw price index.






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[Ally]

A look at Case-Shiller by Metro area






S&P/Case-Shiller reported that its home-prices indexes reached new lows in January, though the pace of decline slowed from December.




The composite 20-city home price index, a key gauge of U.S. home prices, dropped 0.8% in January from the previous month and fell 3.8% from a year earlier compared to a 4.1% annual decline in the previous month. Just three cities posted monthly increases ` Phoenix, Miami and Washington.




Denver, Detroit and Phoenix were the only cities to post positive annual growth rates. There were no data released this month for Charlotte, N.C., due to delays in reporting. On a seasonally adjusted basis, which aims to take into account the slower selling season in the winter, things looked a little better. The overall 20-city index was flat from the previous month, and just nine cities posted monthly declines.





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[Ally]

More U.S. CEOs plan to hire as outlook brightens





A growing number of chief executives at large U.S. companies say they are more optimistic about the economy and plan to step up hiring. The brighter view from the boardroom comes after the best three months of job growth in two years.




The Business Roundtable said Wednesday that a survey of its CEO members found that 42 per cent expect to hire over the next six months. That's up from 35 per cent three months ago.






Read the full article here.