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Paper Economy

This chart shows the rate of initial and continued unemployment claims over the past three years. Both measures increased last week, (SoldAtTheTop)

Jobless claims on the rise

By Guest blogger / 10.03.13

Today’s jobless claims report showed a increases to both initial and continued jobless claims as seasonally adjusted initial claims remained over the 300K level. 
Seasonally adjusted “initial” unemployment claims increased by 1,000 to 308,000 claims from 307,000 claims for the prior week while seasonally adjusted “continued” claims increased by a notable 104,000 claims to 2.925 million resulting in an “insured” unemployment rate of 2.3%.

 
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. 

Currently there are some 1.47 million people receiving federal “extended” unemployment benefits.

 
Taken together with the latest 2.46 million people that are currently counted as receiving traditional continued unemployment benefits, there are 3.93 million people on state and federal unemployment rolls. 

Kevin Concannon, former U.S. undersecretary of agriculture, chats with vendor Helen Wise at the State Farmers Market in Raleigh, N.C.. SoldAtTheTop analyzes recent proposals to cut federal food stamp spending. (Allen Breed/AP Photo/File)

The politics of food stamps: Unlimited government!

By Guest blogger / 10.02.13

Listening to a recent Diane Rehm episode entitled "The Politics of Food Stamps" which discussed proposed cuts to the federal food stamps program provides yet another example of how far out of hand and fiscally profligate the statist policy junkies have gotten.

The proposed cut, as stated directly in the opening of the show, would amount to 5% of the program cost, roughly $40 billion, over 10 years or put another way, roughly $4 billion per year for the next 10 years. 

Recall from my prior posts that the current monthly cost of funding the federal food stamps program is $6.35 billion with an annual total of roughly $76.2 billion.  ( Continue… )

At 56.2 the Institute for Supply Management's purchasing manager’s composite index (PMI) rose 0.5 percent from August and climbed above the level seen a year earlier. (SoldAtTheTop)

Manufacturing gets a boost in September

By Guest blogger / 10.01.13

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity improved in September.

At 56.2 the purchasing manager’s composite index (PMI) rose 0.5% from August and climbing above the level seen a year earlier giving an indication of improving conditions for manufacturing.

Respondent assessments still appear to be hopeful with several noting strength and positive outlook: 

"Global sales generally trending moderately higher." (Textile Mills)

"Slight increase in demand. Forecast looks better. 4Q looking better than 3Q — should begin to see demand increase in October/November." (Food, Beverage & Tobacco Products)

"Raw materials shortages continue. General trends are up, which enhances shortage issues." (Wood Products)

"Overall business is flat to down across the board." (Machinery)

"Housing continues to improve, resulting in improved conditions for our industry." (Furniture & Related Products)

"Rising costs of China labor has us re-evaluating our current position in that country." (Computer & Electronic Products)

"Steady increase in work this month." (Primary Metals)

"Overall business is picking up." (Transportation Equipment)

"Outlook remains strong with housing market and customer orders." (Electrical Equipment, Appliances & Components)

"Labor rates along the Gulf Coast are rising with the increased activity of construction and maintenance projects." (Chemical Products)

This chart shows the average interest rates of 15- and 30-year fixed rate mortgages since 2007. Rates fell last week after the Federal Reserve announced it would not begin tapering its asset purchases. (SoldAtTheTop)

Mortgage rates fall to 4.47 percent

By / 09.28.13

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 a notable 15 basis points to 4.47% since last week while the purchase application volume increased 7% and the refinance application volume increased 5% over the same period.
As a result of Fed Chairman Bernanke's abrupt turn-around on the "tapering" issue, rates appear now to be pulling back notably after weeks of explosive increases that saw a rise of over 100 basis points. 

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).

Pending home sales declined with the seasonally adjusted national index falling 1.6% from July but increasing 5.8% above the level seen in August 2012. (SoldAtTheTop)

Pending home sales decrease in August

By Guest blogger / 09.27.13

Yesterday, the National Association of Realtors (NAR) released their Pending Home Sales Report for August showing that pending home sales declined with the seasonally adjusted national index falling 1.6% from July but increasing 5.8% above the level seen in August 2012. 

Meanwhile, the NARs chief economist Lawrence Yun is suggests rising interest rates (as a  result of the Feds "tapering" debacle) worked to motivate spring buyers but now that the seasonal surge is over, lower home sales are expected:

"Sharply rising mortgage interest rates in the spring motivated buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized last month ... Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead."

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version). 

Jobless claims declined by 5,000 to 305,000 claims from 310,000 claims for the prior week. (SoldAtTheTop)

Jobless claims fall by 5000

By Guest blogger / 09.26.13

Today’s jobless claims report showed a decrease to initial jobless claims and an increase to continued unemployment claims as seasonally adjusted initial claims climbed back above the 300K level. 

Seasonally adjusted “initial” unemployment claims declined by 5,000 to 305,000 claims from 310,000 claims for the prior week while seasonally adjusted “continued” claims increased by 35,000 claims to 2.823 million resulting in an “insured” unemployment rate of 2.2%. 

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. 

Currently there are some 1.34 million people receiving federal “extended” unemployment benefits. 

Taken together with the latest 2.50 million people that are currently counted as receiving traditional continued unemployment benefits, there are 3.85 million people on state and federal unemployment rolls. 

This chart shows the pace of new single family home sales since 2004. Sales jumped 7.9 percent in July 2012 but remained at historically low levels. (SoldAtTheTop)

New home sales jump 7.9 percent in August

By Guest blogger / 09.26.13

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for August showing a notable increase with sales climbing 7.9% from July and rising 12.6% above the level seen in August 2012 remaining at an historically low level of 421K SAAR units. 

It's important to recognize that the inventory of new homes appears to be mounting as unsold units totaled 175K, still though near the lowest level seen in in at least 47 years while the median number of months for sale declined to 3.0. 

The monthly supply decreased to 5.0 months while the median selling price increased 0.55% and the average selling price increased 4.39% from the year ago level. 

The following chart show the extent of sales decline to date (click for full-larger version). 

A sold sign is posted outside a sold home in Springfield, Ill. New data show that home prices are continuing to rise. (Seth Perlman/AP photo/file)

Home prices continue to rise

By Guest blogger / 09.25.13

Yesterday's release of the S&P/Case-Shiller (CSI) home price indices for July reported that the non-seasonally adjusted Composite-10 price index rose a notable 1.86% since June while the Composite-20 index also increased 1.85% over the same period. 

The latest CSI data is continuing to demonstrate significant resiliency compared to past years, as prices remained stable through the typically slow winter and early spring period and now appear to be rising notably through the more active late spring period. 

The 10-city composite index increased 12.28% as compared to July 2012 while the 20-city composite increased 12.39% over the same period. 

Both of the broad composite indices still show significant peak declines slumping -21.99% for the 10-city national index and -21.32% for the 20-city national index on a peak comparison basis. 

This chart shows the Chicago Fed's Activity Index since 2000. Economic activity improved in August, climbing to 0.14 from -0.43 in July. (SoldAtTheTop)

Chicago Fed: US economic activity improved in August

By Guest blogger / 09.23.13

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that the national economic activity improved in August with the index climbing to a level of 0.14 from a level of -0.43 in July while the three month moving average improved to a level weak of -0.18. 

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”. 

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth. 

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession. 

Job seekers check out companies at a job fair in Miami Lakes, Fla. An August Report. Nationally, initial jobless claims increased in the last week while continued unemployment claims decreased, according to yesterday's jobless claims report. (Alan Diaz/AP Photo)

Initial, continued and extended job claims see changes

By Guest blogger / 09.20.13

Yesterday's jobless claims report showed an increase to both initial jobless claims and a decline to continued unemployment claims as seasonally adjusted initial claims climbed back above the 300K level. 

Seasonally adjusted “initial” unemployment claims increased by 15,000 to 309,000 claims from 294,000 claims for the prior week while seasonally adjusted “continued” claims declined by 28,000 claims to 2.787 million resulting in an “insured” unemployment rate of 2.1%. 

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.

Currently there are some 1.45 million people receiving federal “extended” unemployment benefits. 

Taken together with the latest 2.51 million people that are currently counted as receiving traditional continued unemployment benefits, there are 3.97 million people on state and federal unemployment rolls. 

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