The economy isn’t booming and the recovery is showing signs of slowing
Home resales fell in March though the supply of properties fell to 2.37 million. Prices have increased slightly to 2.5%. The National Association of Realtors said home sales slipped 2.6% in the first three months of this year. Distressed sales were t 29%, down from 34% in February.
Even with the decline, it’s the best it’s been since 2007, not exactly a ringing endorsement. [Reuters]
While the news on housing is mixed, it’s not a good sign though the NAR feels the market is stabilizing.
There does not seem to be a high correlation between jobs and housing in each state which points to a national problem. Keynesian economists like Paul Krugman would have us tax and spend more to propel the economy and consumer confidence while supply-side economists want to pay down the debt and deficit and cut stifling regulations.
Unemployment has shown to be unsteady and certainly not climbing upward with any regularity. Last week, more Americans filed applications for unemployment benefits which coincides with two weeks previous. It is an indicator of slowing job growth which was reflected in last month’s numbers. Most economists believe we are on a recovery track but it is slow.
Unemployment figures do not reflect Americans receiving benefits under federal programs which includes another 3.2 million people. They also do not reflect the millions who have completely left the work force and are no longer eligible for benefits or who could not collect under the unemployment guidelines.
Last month, job creation fell to 120,000 jobs, well short of the 200,000 needed to put a dent in unemployment. Manufacturing jobs in New York slowed according to Businessweek. It is a possible sign of a leveling off of expansion from factories. Last year, the economy only grew by 1.7%.
The auto industry, at least in terms of cars and light trucks, which are linked to employment, has shown the best gains in four years. While improving, it is still very slow.
Non-manufacturing jobs are expanding but at a much slower rate than expected –
…All told, this survey result came in at 56.0. That was off from the 57.3 score tallied in February. It was also the lowest reading since the score of 53.0 last December. It should be noted that a reading above 50.0 signals that this key sector is expanding. Expectations had been that non-manufacturing would have come in a tad higher, at 57.0.
Breaking the series down to its individual components, we find that business activity and new orders both slowed their rate of increase last month, with the former scoring 58.9 down from 62.6, and the latter achieving an expansion rate of 48.8 off from the prior month’s 61.2. Also, backlogs actually declined in March, tumbling to 49.5 from 53.0, while new export orders slowed its rate of growth, coming in at 52.5; in February that metric had totaled 54.5.
On the other hand, we saw increased strength in employment, which ticked up to 56.7 from 55.7 in February. This better employment number follows on the heels of a private-sector survey issued earlier this morning showing that 209,000 jobs were added in the non-government arena last month. On Friday, the U.S. Labor Department will issue its monthly survey on non-farm payrolls and unemployment. A payroll gain of about 210,000 is expected, while the jobless rate is forecast to have stayed the same at 8.3%…
Smaller firms are faring better but aren’t confident enough to take on debt to expand. They still see the economy as depressed.
Inflation is on the uptick. For March, the Consumer Price Index for All Urban Consumers (CPI-U) jumped to 229.392, the Bureau of Labor Statistics announced today. This is up 2.65% from its level a year ago, up 2.21% (annualized) from its level six months ago, and up 0.76% (actual) from last month’s 227.663.
The economy has had a boost over the last few years with wild spending and expanded running of the printing presses, but it is becoming a cause for concern because, with all of that, there seems to be no lasting effect to the economy. Bernanke isn’t worried because he’ll simply print more money or borrow from Peter to pay Paul.
I sense another QE in the wind.
Bernanke not worried about inflation because of the control by the Feds –
Bernanke is worried about jobs –
“The job market is far from normal,” Bernanke said. “Continued improvement…is likely to require stronger growth in final demand and production.”
Tony Blair, who believes in the importance of the Euro, sees debt reduction, reforms in pensions, welfare, other spending, and privatization as the answer to the global economic problems. As Europe moves right, the United States is moving left to a place where Europe found failure –
More information –
Beranke isn’t worried about inflation
Uneven housing recovery