Economy Still In Bad Shape. New Homes Sales Lowest In History

Discussion in 'Economy' started by mudwhistle, Jan 29, 2012.

  1. mudwhistle
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    mudwhistle Diamond Member

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    WASHINGTON - The sluggish U.S. economy produced mixed signals Thursday about how fast it is advancing.

    The U.S. government reported that orders for durable goods, those designed to last at least three years, surged three percent in December, suggesting that manufacturing is a strong segment of the national economy. Orders for cars, commercial airplanes, machinery, communications equipment and primary metals fueled the increase, the second straight monthly gain.

    But two other reports depicted a more negative snapshot of the U.S. economy.

    The Commerce Department said the number of new-home sales in the country was the lowest ever in 2011, based on records dating back to 1963. It said 302,000 new homes were sold last year, well less than half the 700,000 figure that economists say would represent a healthy economy.

    Millions of homeowners in the U.S. have lost their homes to foreclosures when they lost their jobs and were unable to keep paying their home loans. The glut of houses for sale has pushed down prices, but stricter lending requirements have curtailed the number of buyers who qualify for new loans. Sales of existing houses, often cheaper than prices on comparable new homes, have increased in recent months.

    In a third report, the government said that the number of U.S. workers making their initial claims for jobless aid increased by 21,000 last week to 377,000, after falling to a nearly four-year low the previous week. New applications for unemployment assistance have steadily fallen in recent months, averaging about the same number as last week’s total.

    But economists say that the 8.5 percent national unemployment rate will not decrease much until the number of new requests for jobless aid falls consistently below 375,000, to signal that hiring has picked up. About 13 million U.S. workers are unemployed. While the labor market has improved in recent months, the country has struggled to replace the 8.7 million jobs lost during the recession from 2007 to 2009, the worst in the U.S. since the 1930s.

    The country’s central bank, the Federal Reserve, announced Wednesday that it is keeping its benchmark lending rate near zero through late 2014, its latest attempt at boosting the national economy. At the same time, however, it trimmed its projection for the U.S. economy this year, saying that it may only advance by as much as 2.7 percent, down from an earlier 2.9 percent prediction.

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    US New Home Sales Lowest In History
     
  2. mudwhistle
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    mudwhistle Diamond Member

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    This means more Quantitative Easing and more unrecorded inflation.......and more shrinking of the dollar until after the election at least.
     
  3. Annie
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    Annie Diamond Member

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    If only that were the only issue, though lord knows it's a serious one. The problems are myriad and do not spell recovery any time soon. Lots of links follow at the sites:

    Fed Won't Admit it - But QE3 is Already in Force - Yahoo! Finance

    Yeah, here's more from an econ professor at Yale:

    http://finance.yahoo.com/blogs/daily...170501261.html

    2011 GDP: 1.7%
    Not exactly a barnburner.
    http://www.bloomberg.com/news/2011-1...op-europe.html
     
  4. mudwhistle
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    mudwhistle Diamond Member

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    However, the press will continue to ignore the bad news and will search for a silver-lining in every report....using "unexpectedly" often in their reporting.

    It's clear that things are not getting better, but Obama needs a good economy, and since he can't produce one, he's going act like it's better......and the media will back him up 200%.
     
  5. samjones
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    There's a difference between a losing investment and a market collapse and homes now are in a market collapse. We don't know if we've hit the bottom not because we don't know which direction homes are headed but because there are so many sellers and so few buyers that we don't know where home values should rightly be placed.

    This is bad.

    Assuming we can trust the numbers presented in the chart, home valuations don't look materially different than stock valuations, historically. Move the market a year or 2 in one direction and instead of "buying high", put "selling low" and the DJIA looks similar to home values.

    One big difference is that every economic policy over the last 3 years has been designed to prop up the DJIA - Eff the homeowners. Oh wait - let me remember - the value of homes only matters to subprimer CRA people, right? It doesn't affect you and me......

    Right?
     
  6. expat_panama
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    expat_panama Silver Member

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    We don't have to assume any such thing because anyone who wants can look and think for himself. That home sales graph shows annual numbers ending two years ago. Here're the month stats ending last month:
    [​IMG]
    --so what we got is home sales stopped falling over a year ago and they bottomed out because of a two decade sales glut. The proprietary home price index plot is some clown's opaque fudging to grab tenure through politics. Here's the Fed's home price index devided by the CPI--
    [​IMG]
    --showing once again that things have bottomed out and have been basing.
     

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