"U.S. OUTLOOK IS ONE OF NEAR-TERM WEAKNESS AND LONG TERM STRENGTH’ anyone puzzled by recent economic numbers is not alone,they can be contradictory and confusing sometimes and as we have learned in the past consumers spending habits usually run hand in hand with the consumer confidence index.Everyday their is good news and then the next paragraph that will have news that is not so good. Most Americans are reducing their debt right now with the extra cash they have,if they are fortunate to have any in lieu of spending freely,
Businesses are cautious about hiring and expanding until they get a clear signal that consumer spending is back to where it was,reduced debt and rising home prices will eventually boost consumer spending,consumer spending needs the business community to start hiring and giving out raises that exceed the cost-of-living index,so who blinks first,consumers need businesses to start spending money and the businesses need the consumers to start spending money.
SEPTEMBER HOUSING LOOKS SOLID,CONSTRUCTION GAIN MAY BUOY U.S. ECONOMY
A recovery in home construction is building strength helping the economy instead of dragging it down,according to IHS GLOBAL INSIGHT the September housing permits far exceeded the expectations in all four regions,the northeast was the lowest but it was 15 percent higher than September of 2011.The Commerce Department reported that housing permits are less volatile than starts and more reflective of future work and they were up 11.6 percent in all four regions,those are strong numbers real strong. With 114,000 new jobs created in September those are the positive numbers that economist have been hoping for. Housing typically leads the U.S. out of a recession it has not done so in this one and the only reason I can come up with is because housing is what caused this recession and that has never happened before,this is called the biggest recession since the great depression,and that is true.
Home construction is closely watched because it’s labor intensive,since losing two million jobs after the housing crash it has been a slow and painful recovery.Last year their were only 434,000 single-family homes built ,that was the worst year on record, so this year each quarter is between 10 and 20 percent increase over last year as you can see we have a ways to go to get back to where we were.But with seven months in a row with an increase,even a slight increase or a large increase we are on the way back.September auto sales were the best month the auto business has had this year in United States and Canada, With last weeks unemployment number taking a huge leap forward,the naysayers were out in force accusing the Obama administration of playing games with the number,with only three weeks to go before the Presidential election some people were questioning how the unemployment percentage could fall below 8 percent for the first time since Obama was elected. The next one that matters comes out three days before the election, if that number takes a huge tumble down than we can all start to wonder.
HOUSING MARKET "FORECLOSURE FILINGS HEAD DOWN"
September count marks a five year low,according to a report filed last Thursday their were fewer homes on track to be seized by their lenders than any time in the last five years,nationwide that makes two months in a row sharp decline,the foreclosure rates follow geographic borders a little closer than some of the other indicators,and that has to do how bad they were hit when the housing bubble burst along with the job market recovery.The five worst states are Arizona,California,Illinois,Georgia and Florida, at last Nevada fell out of the top five after leading the country for two years in a row.
Home prices build to new peaks in dozens of U.S. cities,the average home price has begun to inch up after four or five years of soft market conditions,in more than 100 metropolitan areas August prices have hit an all time high.In addition their are another 50 metropolitan areas that are within 2 percent of their all time high,an example of those areas are Austin,TX Denver,CO Indianapolis,IN and Portland MN,according to Moody,s Analytics Chief some of these cities did not have far to go to get back to where they were,other cities that got hit hard are months away of just getting back to where they were.
I owe an apology to our friends to the north more specifically the good people in the great city of Saskatoon,Canada. I received a banner from the Mayors office two months announcing their graduation of the first class from their joint-partnership with the local community college teaching heavy equipment . After one year their heavy equipment training program had graduated 8 students and 7 of them had gone to work.I still do not know if they were bragging about the 8 or the 7, but either way I did not think it warranted all of the attention it received in the newspaper and e-mail.So I made a couple of snide comments about the success of their heavy equipment training program because I am extremely familiar with how much it cost in time and money to get somebody through the heavy equipment school and their is no way training that few students you can stay open without government help.Regardless nothing justifies my snippy comments especially after I learned that they do not enjoy 300 days of sunshine like we do,their training season is only 6 months long so I guess thats pretty good. So to the good people of Saskatoon if you were offended by what I wrote you have my sympathies.