Paper Economy
This chart shows the change in the number of workers unemployed 27 weeks or more since 2000. The number of long term unemployed workers increased to 4.79 million in February. (SoldAtTheTop)
Jobs report not so great for the long term unemployed
Friday's employment situation report showed that conditions for the long term unemployed worsened notably in February while still remaining distressed by historic standards.
Workers unemployed 27 weeks or more increased to 4.797 million or 40.2% of all unemployed workers while the median term of unemployment increased to 17.8 weeks and the average stay on unemployment increased to 36.9 weeks.
Looking at the charts below, you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.
President-elect Franklin D. Roosevelt goes to his Inauguration with the outgoing President Herbert Hoover as they share a ride to the Capitol in Washington, D.C. Big government policies and philosophies, like the antiquated vaudeville style huckster politicians of 1930s, never hold up over time, SoldAtTheTop writes. (Franklin D. Roosevelt Presidential Library and Museum/AP/File)
Big government doesn't work
Big government doesn't work. It's that simple. Also, it's immoral to obligate generations of individuals to operate within and contribute to a system rife with massive policy delusions, particularly a system they had little to no part in creating.
Of course, that's using my definition of morality... policy junkies value things exactly the other way round.
Who's right?
Watching some random FDR-era YoutTube videos brings some insights on the basis for "New Deal" policies but more importantly, you can feel the antiquity. ( Continue… )
Jobless claims declined by 7,000 to 340,000 claims from 347,000 claims for the prior week. (SoldAtTheTop)
Jobless claims fall to 340,000
Today’s jobless claims report showed a decline to initial unemployment claims and a slight increase to continued unemployment claims as initial claims trended below the closely watched 400K level.
Seasonally adjusted “initial” unemployment claims declined by 7,000 to 340,000 claims from 347,000 claims for the prior week while seasonally adjusted “continued” claims increased by 3,000 claims to 3.094 million resulting in an “insured” unemployment rate of 2.4%.
Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.
RECOMMENDED: Four job trends for 2013
Currently there are some 1.78 million people receiving federal “extended” unemployment benefits.
Taken together with the latest 3.53 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.31 million people on state and federal unemployment rolls.
The latest data from the Mortgage Bankers Association shows that mortgage rates declined 7 basis points to 3.58 percent since last week. (SoldAtTheTop)
MBA: Mortgage rates drop to 3.58 percent
The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 7 basis points to 3.58% since last week while the purchase application volume jumped a notable 15% and the refinance application volume also rose 15% over the same period.
The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).
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private employers added 198,000 jobs in February 2012, according to private staffing and business services firm ADP. (SoldAtTheTop)
ADP: Private employers add 198,000 jobs
Today, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in February as private employers added 198,000 jobs in the month bringing the total employment level 1.64% above the level seen in February 2012.
Perusing the rest of the data in the ADP dataset you can see the the economy is currently showing the most growth for small to mid-sized service providing jobs with goods-producing jobs remaining near trough levels.
Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
RECOMMENDED: Four job trends for 2013
At 56.9 the business activity index improved a slight 0.89 percent since January but remained 5.64 percent below the level seen a year earlier. (SoldAtTheTop)
ISM: Service sector continues expansion in February
Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity continued to expand in February as assessments of service-sector related activity generally improved with the business activity component increasing slightly while the overall non-manufacturing index climbed to 56.0 from last months reading of 55.2.
At 56.9 the business activity index improved a slight 0.89% since January but remained 5.64% below the level seen a year earlier.
This month, service industry respondents are sounding very positive with all respondent quotes citing improving activity and "positive signs":
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"Our business is beginning to turn up slightly." (Health Care & Social Assistance)
"Business seems to be improving; RFQ volume and orders also up." (Management of Companies & Support Services)
"Continuing to see slight uptrend in activity, primarily related to 1st quarter initiatives started." (Finance & Insurance)
"Construction market showing some positive signs." (Real Estate, Rental & Leasing)
"The economy continues to slowly pick up, perhaps at an even faster pace than had been previously projected. New housing permits and business licenses are at a multiyear high, although still lower than pre-recession." (Public Administration)
"February bouncing back to forecast levels, which was 11 percent over 2012." (Wholesale Trade)
"Business is picking up; more projects to bid and things are improving." (Construction)
In December 2012, the price of residential properties in Hong Kong declined 0.8 percent since November but climbed 26.77 percent above the level seen in December 2011. (SoldAtTheTop)
Hong Kong bubble? Property prices fall in December.
The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in December, the price of residential properties declined 0.8% since November but climbed 26.77% above the level seen in December 2011.
The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market.
RECOMMENDED: How savvy are you about real estate? Take our quiz.
This chart shows, in millions, the total value of residential construction put in place between 2004 and the beginning of 2013. Total residential construction slid slightly in January, dropping 0.02 percent from December 2012. (SoldAtTheTop)
Construction spending mixed in January
Today, the U.S. Census Bureau released their latest read of construction spending showing mixed results in January with total construction spending and non-residential construction spending declining while single family residential construction spending improved.
On a month-to-month basis, total residential spending declined 0.02% from December climbing 22.05% above the level seen in January 2012 while still remaining a whopping 54.97% below the peak level seen in 2006.
Single family construction spending climbed a notable 3.62% since December rising 30.21% since Janaury 2012 but remained a whopping 68.00% below it's peak in 2006.
Non-residential construction spending declined a whopping 5.08% since December but still climbing 3.95% above the level seen in January 2012 and remained a whopping 27.36% below the peak level reached in October 2008.
RECOMMENDED: How savvy are you about real estate? Take our quiz.
The Bureau of Economic Analysis released their second estimate of the Q4 2012 GDP report showing that the economy barely registered growth in Q4 2012. (SoldAtTheTop)
BEA: US economy grew 0.1 percent in Q4
Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q4 2012 GDP report showing that the economy barely registered growth in Q4 2012 with real GDP improving at an annualized rate of just 0.1% from Q3 2012.
On a year-over-year basis, real GDP increased 1.61% while the quarter-to-quarter non-annualized percent change was an increase of a slight 0.03%.
The latest quarterly results indicate that the most notable source of weakness in the economy came from declines in exports with the "net-exports" component declining at an annualized rate of 3.9% from Q3, and notable declines in government spending particularly on national defense with a 22.0% decline in federal national defense spending from Q3.
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Residential investment, on the other hand, worked to buoy the overall fixed investment component growing at an annualized rate of 17.5% from Q3.
Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.
Jobless claims dropped to 344,000 claims from 366,000 claims for the prior week. (SoldAtTheTop)
Jobless claims fall to 344,000
Today’s jobless claims report showed a notable decline to both initial and continued unemployment claims as initial claims trended below the closely watched 400K level.
Seasonally adjusted “initial” unemployment claims declined by a notable 22,000 to 344,000 claims from 366,000 claims for the prior week while seasonally adjusted “continued” claims declined by 91,000 claims to 3.074 million resulting in an “insured” unemployment rate of 2.4%.
Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.
RECOMMENDED: Four job trends for 2013
Currently there are some 2.00 million people receiving federal “extended” unemployment benefits.
Taken together with the latest 3.66 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.67 million people on state and federal unemployment rolls.
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