A Mixed Bag of Economic Reports

The summer economic meme seems to be improvement in manufacturing, no good news on real estate and bouncing along the bottom for employment.

Economic Gauges

The Philly Fed said that its index rose to 4.2 in August from a negative 7.5 in July. That’s the highest reading since November 2007. All of the sub-indexes were positive with the exception of, you guessed it, the employment index, though it did get less worse going from a -25.3 to a -12.9.

The index of leading economic indicators rose 0.6% which is the fourth month in a row that index has been up. From Jake at EconompicData.com, here is a graphic representation.

Mortgages

Problems in the single family home market are not getting any better at all. The Mortgage Bankers Association reported that 13.6% of single family home mortgages were either at least one payment past due or in foreclosure. Foreclosure starts were pretty much flat which would be encouraging if that number meant anything but given foreclosure moratoria in various states, the data is too muddied to make much out of it.

The pain is not distributed evenly. Consider this and thank God if you don’t happen to live in one of these states:

In Florida, 22.8% of mortgages outstanding were delinquent at least one payment or in foreclosure. Other poor performing states include Nevada, where 21.3% of mortgages were delinquent or in foreclosure, Arizona, where 16.3% were delinquent or in foreclosure, and Michigan, where 15.3% were delinquent or in foreclosure.

Employment

New claims for unemployment insurance jumped 15,000 to 576,000 last week. The four-week moving average was also up 4,250 to a level of 570,000. These are seasonally adjusted figures and they were not expected to move in this direction.

Once again from Jake, here’s a pictorial of the numbers:

Like I said, the same old story. Some pickup in manufacturing but the consumer continues to get slaughtered. If the blip up in the Philly Fed, leading indicators and some other similar positive signs don’t amount to more than just inventory restocking then this entire recovery story might well crash and burn this Fall.

The employment and housing numbers aren’t going to sit well at all with the political class. If things aren’t starting to look up within a month or so, expect some major moves on stimulus. The natives aren’t just getting restless, they’re the ones taking it on the chin.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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