Inventory of unsold homes jumps to 11-year high
WASHINGTON (MarketWatch) — The sale of existing U.S. homes sank 27.2% in July — the biggest one-month drop ever — largely because of the phase-out of a federal tax credit, according to an industry trade group.
The National Association of Realtors said existing-home sales fell to a seasonally adjusted annual rate of 3.83 million in July from 5.26 million the month before. Sales of single-family homes fell to the lowest rate in 15 years.
A year earlier, existing home sales totaled 5.14 million in July.
Inventories of unsold homes rose 2.5% to 3.98 million, representing a 12.5-month supply, the highest level since at least 1999. Read the full report on the NAR website.
Economists surveyed by MarketWatch forecast the pace of annualized sales to fall to 4.70 million. See our complete economic calendar and consensus forecast.
Many buyers took advantage of a temporary tax credit earlier this year to save up to $8,000, but they had to sign contracts before the end of April to qualify. As result, sales that might have taken place later in 2010 were squeezed into the first few months of the year.
Home purchases were expected to decline after the expiration of the tax credit and that is exactly what’s happened. After rising 7.6% in April, existing-home sales fell 2.2% in May and 7.1% in June.
Home sales are likely to remain sluggish over the next few months despite the lowest 30-year fixed-mortgage rates in the modern era. Rates slipped to a record-low 4.56% in July from 4.74% in June, according to Freddie Mac.
The latest data suggests the U.S. economy might be slowing again and the unemployment rate is stuck at 9.5%, near a 27-year high. Until the economy shows big improvement and hiring begins to pick up, the housing market will remain weak, economists say.
More…
Tuesday, August 24, 2010
Thursday, August 19, 2010
Weekly Unemployment Claims Hit 500,000, Exceed Every Economist's Estimate; No Lasting Improvement for 9 Months
Weekly Unemployment Claims Hit 500,000, Exceed Every Economist's Estimate; No Lasting Improvement for 9 Months
I don't understand the top economists in America, every month the unemployment numbers unexpectedly rise or remain steady for the last six months. At some point the unemployment numbers should be expected and the top economists should not be so overoptomistic. Here is an article from a real economist, click on the link to see the charts data.
Once again the pile of overoptimistic economist estimates continues to mount. Today, weekly unemployment claims hit 500,000 exceeding every forecast. This is (at minimum) the 4th time since March every economist was overly optimistic regarding unemployment claims. Nicely done guys.
Bloomberg reports Jobless Claims in U.S. Rose to Highest Since November
Applications for unemployment benefits in the U.S. unexpectedly increased last week to the highest level since November, showing companies are stepping up the pace of firings as the economy slows.
Initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, Labor Department figures showed today in Washington. Claims exceeded all estimates of economists surveyed by Bloomberg News and compared with the median forecast of 478,000.
Estimates of the 42 economists surveyed by Bloomberg ranged from 460,000 to 495,000. The government revised the prior week’s claims figure to 488,000 from a previously reported 484,000. Initial filings last week were the highest since the week ended Nov. 14, 2009.
Claims have increased in four of the last five weeks.
Weekly Claims Report
Please consider the Unemployment Weekly Claims Report for August 19, 2010.
In the week ending Aug. 14, the advance figure for seasonally adjusted initial claims was 500,000, an increase of 12,000 from the previous week's revised figure of 488,000. The 4-week moving average was 482,500, an increase of 8,000 from the previous week's revised average of 474,500.
The 4-week moving average is still near the peak results of the last two recessions. It's important to note those are raw numbers, not population adjusted. Nonetheless, the numbers do indicate broad, persistent weakness.
To be consistent with an economy adding jobs coming out of a recession, the number of claims needs to fall to the 400,000 level.
At some point employers will be as lean as they can get (and still stay in business). Yet, that does not mean businesses are about to go on a big hiring boom. Indeed, unless consumer spending picks up, they won't.
Questions on the Weekly Claims vs. the Unemployment Rate
A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"
The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.
Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can be wide.
With census effects nearly played out, It may be quite some time before we weekly claims drop to 400,000 or net hiring that exceeds +250,000.
Unemployment claims are clearly in reverse.
More...
I don't understand the top economists in America, every month the unemployment numbers unexpectedly rise or remain steady for the last six months. At some point the unemployment numbers should be expected and the top economists should not be so overoptomistic. Here is an article from a real economist, click on the link to see the charts data.
Once again the pile of overoptimistic economist estimates continues to mount. Today, weekly unemployment claims hit 500,000 exceeding every forecast. This is (at minimum) the 4th time since March every economist was overly optimistic regarding unemployment claims. Nicely done guys.
Bloomberg reports Jobless Claims in U.S. Rose to Highest Since November
Applications for unemployment benefits in the U.S. unexpectedly increased last week to the highest level since November, showing companies are stepping up the pace of firings as the economy slows.
Initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, Labor Department figures showed today in Washington. Claims exceeded all estimates of economists surveyed by Bloomberg News and compared with the median forecast of 478,000.
Estimates of the 42 economists surveyed by Bloomberg ranged from 460,000 to 495,000. The government revised the prior week’s claims figure to 488,000 from a previously reported 484,000. Initial filings last week were the highest since the week ended Nov. 14, 2009.
Claims have increased in four of the last five weeks.
Weekly Claims Report
Please consider the Unemployment Weekly Claims Report for August 19, 2010.
In the week ending Aug. 14, the advance figure for seasonally adjusted initial claims was 500,000, an increase of 12,000 from the previous week's revised figure of 488,000. The 4-week moving average was 482,500, an increase of 8,000 from the previous week's revised average of 474,500.
The 4-week moving average is still near the peak results of the last two recessions. It's important to note those are raw numbers, not population adjusted. Nonetheless, the numbers do indicate broad, persistent weakness.
To be consistent with an economy adding jobs coming out of a recession, the number of claims needs to fall to the 400,000 level.
At some point employers will be as lean as they can get (and still stay in business). Yet, that does not mean businesses are about to go on a big hiring boom. Indeed, unless consumer spending picks up, they won't.
Questions on the Weekly Claims vs. the Unemployment Rate
A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"
The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.
Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can be wide.
With census effects nearly played out, It may be quite some time before we weekly claims drop to 400,000 or net hiring that exceeds +250,000.
Unemployment claims are clearly in reverse.
More...
Wednesday, August 18, 2010
US Bankruptcies Surge To 5 Year High
Zerohedge
The Administrative Office of the U.S. Courts reports that personal bankruptcy filings for the year ended June 30, 2010 surged to a five year high, hitting 1.57 million, a 20% increase from the prior year. Furthermore, in the period between April and June, there were 422,061 bankruptcy filings, a 9% increase from the 388,148 in the previous quarter, and up 11% from 381,073 a year earlier. As Reuters highlights, quarterly filings surpassed 400,000 for the first time since a record 667,431 bankruptcies were begun in the fourth quarter of 2005, when Congress overhauled federal bankruptcy laws and made it harder for people and businesses to file. Yet while that was an administrative adjustment to bankruptcy law, this time it is all organic, and an indication of the ongoing incapability of America's politicians to fix the economic collapse. Indicatively, Nevada had the highest rate of filings on a per capita basis in the last year, with 11.74 per 1,000 people, while Alaska had the fewest, with just 1.58 per 1,000. The states with the most bankruptcies were California (241,975), Florida (107,373), Illinois (80,801), Georgia (77,809), and Ohio (72,924).
More...
The Administrative Office of the U.S. Courts reports that personal bankruptcy filings for the year ended June 30, 2010 surged to a five year high, hitting 1.57 million, a 20% increase from the prior year. Furthermore, in the period between April and June, there were 422,061 bankruptcy filings, a 9% increase from the 388,148 in the previous quarter, and up 11% from 381,073 a year earlier. As Reuters highlights, quarterly filings surpassed 400,000 for the first time since a record 667,431 bankruptcies were begun in the fourth quarter of 2005, when Congress overhauled federal bankruptcy laws and made it harder for people and businesses to file. Yet while that was an administrative adjustment to bankruptcy law, this time it is all organic, and an indication of the ongoing incapability of America's politicians to fix the economic collapse. Indicatively, Nevada had the highest rate of filings on a per capita basis in the last year, with 11.74 per 1,000 people, while Alaska had the fewest, with just 1.58 per 1,000. The states with the most bankruptcies were California (241,975), Florida (107,373), Illinois (80,801), Georgia (77,809), and Ohio (72,924).
More...
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