The Federal Reserve has indicated that it expects a slow and gradual recovery, and the government's strong efforts to ignite the economy have started to show results: TARP fund boosted the financial sector and cash-for-clunkers has raised vehicle sales from the dead. However, the sustainability for these efforts rest on a consumer that has seen 13 trillion dollars of wealth wiped out. The fact that US savings rate have risen from a pre-crisis 1% to 5.2% indicates just how hard it is going to be to invigorate consumer spending which accounts for 70% of the economy. If you look back at the state of the economy in July you will see that the improvements are not that dramatic today. The real estate cycle is likely to keep declining for a while.
- Factory Orders (July 2nd): Total factory orders rose +1.2% in May after +0.5% in April. Nondefence capital goods orders were signifi cantly stronger, rising +4.7%. Shipments, meanwhile, fell -0.9%, inventories
- Advance Retail Sales (July 14th): Total retail sales rose +0.6% following +0.5% in May. Excluding autos, sales rose +0.3% after +0.4%. However, if gasoline stations and autos are excluded, sales fell -0.2% after -0.1%, or -3.8% lower than a year ago. S&P500 +0.53%.
- Trade Defi cit (July 10th): The trade defi cit in may fell to -$26.0bn from -$28.8bn. This was the result of a +1.6% rise in exports against a -0.6% fall in imports. The non-petroleum defi cit decreased to -$22.7bn from -$23.8bn. S&P500 -0.40%.
- Industrial Production (July 15th): Industrial production has so far refused to follow the upwards burst in the ISM production index. It fell -0.4% in June, after -1.2% in May. It is also -13.6% lower than a year ago. Capacity utilisation, meanwhile, fell to 68.0% (another record low), from 68.2%.
- Housing Starts (July 17th): Starts rose for the second consecutive month in June, up +3.6% after +17.3%. Nevertheless, they are still -46.0% lower than a year ago. Single-family starts actually increased +14.4%, though are -28.2% lower than a year ago. Finally, building permits increased +8.7% after +4.0%, though down -52.0% annually. S&P500 -0.04%.
- New Home Sales (July 27th): New home sales were surprisingly strong in the month, rising +11.0% after +2.4%. An increase of +3.0% was anticipated. Sales are now -21.3% lower than a year ago. The inventory of unsold homes fell to 8.8 months' supply from 10.2 months. S&P500 +0.30%.
-0.6% was expected. Excluding transportation, orders increased +1.1%, while excluding defence, they fell -0.7%. Orders are now -26.7% lower than a year ago. S&P500 -0.46%.
From where I sit it looks like we had a long way to go in July, and we still do. - 31384
- Factory Orders (July 2nd): Total factory orders rose +1.2% in May after +0.5% in April. Nondefence capital goods orders were signifi cantly stronger, rising +4.7%. Shipments, meanwhile, fell -0.9%, inventories
- Advance Retail Sales (July 14th): Total retail sales rose +0.6% following +0.5% in May. Excluding autos, sales rose +0.3% after +0.4%. However, if gasoline stations and autos are excluded, sales fell -0.2% after -0.1%, or -3.8% lower than a year ago. S&P500 +0.53%.
- Trade Defi cit (July 10th): The trade defi cit in may fell to -$26.0bn from -$28.8bn. This was the result of a +1.6% rise in exports against a -0.6% fall in imports. The non-petroleum defi cit decreased to -$22.7bn from -$23.8bn. S&P500 -0.40%.
- Industrial Production (July 15th): Industrial production has so far refused to follow the upwards burst in the ISM production index. It fell -0.4% in June, after -1.2% in May. It is also -13.6% lower than a year ago. Capacity utilisation, meanwhile, fell to 68.0% (another record low), from 68.2%.
- Housing Starts (July 17th): Starts rose for the second consecutive month in June, up +3.6% after +17.3%. Nevertheless, they are still -46.0% lower than a year ago. Single-family starts actually increased +14.4%, though are -28.2% lower than a year ago. Finally, building permits increased +8.7% after +4.0%, though down -52.0% annually. S&P500 -0.04%.
- New Home Sales (July 27th): New home sales were surprisingly strong in the month, rising +11.0% after +2.4%. An increase of +3.0% was anticipated. Sales are now -21.3% lower than a year ago. The inventory of unsold homes fell to 8.8 months' supply from 10.2 months. S&P500 +0.30%.
-0.6% was expected. Excluding transportation, orders increased +1.1%, while excluding defence, they fell -0.7%. Orders are now -26.7% lower than a year ago. S&P500 -0.46%.
From where I sit it looks like we had a long way to go in July, and we still do. - 31384
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Want to find out more about the real estate cycle, then you should check out http://hubpages.com/hub/The-Real-Estate-Cycle.
