Decline In Home Prices Getting Steeper
Home prices are falling faster in the nation's largest cities, and a record number of foreclosures are expected to push prices down further through next year.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 0.7 percent in September from August. Eighteen of the cities recorded monthly price declines.
That was the worst month-to-month decline seen all year, as prior months saw a temporary, artificial boost from government intervention in the housing market.
Prices rose in many cities from April through July, mostly boosted by government tax credits which have since expired. Job worries and record high foreclosures are dampening buyer demand and weighing on prices.
(HT: Hot Air)
Strategy Room 11-12
I'll be on Strategy Room at FoxNews.com today from 11-12.
With tomorrow's celebration of dastardly proto-Americans' racist imperialism mucking up the calendar, we get our weekly peek at labor malaise a day early this week.
And the number is... good!
Last week 34,000 less workers filed for unemployment benefits bringing the total number to 407,000, the lowest level in more than two years, according to the Department of Labor.
The numbers are better than expected: economists expected seasonally adjusted unemployment to fall to 435,000 this week.
Yes, we're still above the breakeven level, so by "good" we still mean that things are not only bad, but getting worse, though the pace of worsening is continuing to ease.
And if we see just a bit more second-order improvement (and we see it sustained, in this very volatile indicator), we may shortly be able to say that things are no longer getting worse at all, and that the miserable status quo in the labor market is merely being maintained, rather than eclipsed to the downside on a weekly basis.
One final splash of cold water to toss on today's economic bright spot: nearly every week sees an upward revision to the previous week's unemployment claims estimate. With this week's initial gauge being rushed out the door a day early, brace for a potentially sizable revision next Thursday.
On the bright side, stocks came out of the gate in buoyant fashion in the wake of the news, suggesting a possible reversal of yesterday's ugliness.
Q3 GDP Growth Less Crummy Than Thought
2.5%, not 2.0%.
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.
The GDP estimates released today are based on more complete source data than were available for the advance estimate issued last month. In the advance estimate, the increase in real GDP was 2.0 percent (see "Revisions" on page 3).
The increase in real GDP in the third quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), private inventory investment, nonresidential fixed investment, exports, and federal government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in
imports and accelerations in private inventory investment and in PCE that were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and in exports.
Economists were expecting an upward revision to about 2.4%. The mild upside surprise failed to inspire much optimism in the market.
I think we can now safely say that the labor market is convincingly improving. Or, rather, that the rate of deterioration is convincingtly abating.
Initial unemployment claims are still well above the breakeven level, so aggregate joblessness is still rising, but today's data from the Labor Department show the 4-week average holding under 450,000 for two consecutive weeks for the first time this year. And we've meaningfully improved (er, the pace of worsening has meaningfully slowed) since we escaped the wrath of Recovery Summer.
Initial Unemployment Claims (blue) and 4-week Average (red)
I'm in San Francisco through the weekend and blogging will be light-to-non-existent until I return.
Strategy Room 11-12
I'll be on Strategy Room at FoxNews.com today from 11-12.
Alas, the mean reversion we expected following last week's unexpected dip in unemployment claims arrived on schedule today.
In the week ending Oct. 30, the advance figure for seasonally adjusted initial claims was 457,000, an increase of 20,000 from the previous week's revised figure of 437,000. The 4-week moving average was 456,000, an increase of 2,000 from the previous week's revised average of 454,000.
Economists were looking for a lesser jump to 450,000.
The scale of last week's dip was (as predicted in last week's stubbornly gloomy post) pared back upon revision as well.
Inititial Unemployment Claims (blue) and 4-Week Average (red)
Thus, we're once again above the level where we began the year, giving further support to the increasingly obvious truth that the stimulus was a big, fat waste of money wasn't big enough.
Let's hurry up and throw another trillion down this hole before the miserly Republicans get their hands on the purse strings.
Did Investors Just Secure the Goldilocks Congress?
I'm not convinced. But it's an interesting hypothesis.
If you’re a stock market bull like me, you probably spent much of today pinching yourself.
Apparently, dreams do come true — and fast.
You wanted a pro-business, pro-free trade, anti-tax Congress. You wanted a president who would finally “get it” and turn to the center. You wanted a pliant, but not reckless Federal Reserve.
But at least now, following the great Democratic comeuppance, we have a president who is no longer throwing punches. In facts, he’s giving hugs.
At today’s conciliatory press conference, the president said he wanted to “set the right tone” with businesses. He wanted to make “it absolutely clear that the only way America succeeds is if businesses are succeeding.” He wanted to go overseas and “open up markets so that businesses can prosper.”
I heard a lot of other stuff at the press conference too, little of it "conciliatory".
That's not to say that bullish investors shouldn't be a bit more buoyant than they were 24 hours ago (after all, you can't spell goldilocks without gridlock (well, you almost can't)). But despite yesterday's rout, some very big policy levers remain in hands that are hardly pro-business or anti-tax.
Harry Reid says he's willing to "tweak" the healthcare law.
(HT: Hot Air headlines)
Know Your Rights
In Obama's America, state-sponsored healthcare is a right. But voting is a "privilege"?
Election Day Pick'em; Update
Might as well throw the dart, for the record.
GOP net pickups (when all is said and done):
Update: K-Lo and I are on the same page.
Still up for grabs on the Senate side: Colorado, Washington, and - most ominously - Alaska, where we should all hunker down for an endless fight over the (to borrow from 2000 Al Sharpton) "intentionality" of tens of thousands of write-in voters.
Of course, that race is now down to a Republican and a quasi-Republican who will caucus with Republicans, so it doesn't much affect the headline power shift,.
Economy Belches Out One Last Reminder To Voters
Seems like a fitting finale for pre-election economic news.
Personal income decreased $16.8 billion, or 0.1 percent, and disposable personal income (DPI) decreased $20.3 billion, or 0.2 percent, in September, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $17.3 billion, or 0.2 percent. In August, personal income increased $54.4 billion, or 0.4 percent, DPI increased $47.9 billion, or 0.4 percent, and PCE increased $52.5 billion, or 0.5 percent, based on revised estimates.
Real disposable income decreased 0.3 percent in September, in contrast to an increase of 0.2 percent in August. Real PCE increased 0.1 percent, compared with an increase of 0.3 percent.
Economists were expecting an increase in nominal income of 0.2% and swifter consumption growth of 0.4%.