20 May 2010

Economics Update

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This is not an expanding home market
H/t Calculated Risk
Well, so much for green shoots, it's jobless Thursday, and new claims rose by 25K this week to 471,000, with the 4 week moving average rising by 3K to 453,500, though the continuing claims number fell by 40K to 4,630,000.

It should be noted that the continuing claims number does not count those on emergency UI, like yours truly.

Additionally, it should be noted that the Conference Board's Index of Leading Economic Indicators posted its 1st drop since March 2009. It should be noted that this is a volatile metric, and a folks who know economics generally want at least 3 months up or down before they declare a trend.

Additionally, real estate is looking dicey.

We have, "One in 7 US homeowners late paying or in foreclosure," actually 14.01%, in the 1st quarter of the year, with 10% of home owners late 90+ days, and the AIA's Architecture Billings Index shows continued contraction in April, though this indicator for future commercial construction is did improve in comparison to March.

Additionally, mortgage purchase applications fell to a 13 year low, even as low rates kick-started the demand for refinancing.

Note that this is despite near record low mortgage rates.

We are also seeing continuing erosion in the prices of commercial property.

On the plus side, the Philadelphia Bank of the Federal Reserve's Manufacturing Activity Index rose in May, and Japan's economy grew faster than expected.

On the inflation side, the CPI fell by 0.1% in April, and the core rate, which excludes food and energy, has risen .9% over the past 12 months, which is actually worrying, as it indicates a risk of a deflationary spiral/lost decade.


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