US data on Tuesday show clearly that the economy has weakened recently. Bloomberg reports:
Consumer sentiment unexpectedly decreased in May to the lowest level in six months as Americans grew concerned over the outlook for jobs and the economy, while a measure of home prices dropped to a nine-year low.
The Conference Board’s confidence index dropped to 60.8 from a revised 66 reading in April, figures from the New York- based private research group showed today. Home prices decreased 5.1 percent in the first quarter from the same time in 2010, according to data from S&P/Case-Shiller...
Home prices were down 4.2 percent from the previous three months, the biggest one-quarter drop since the first three months of 2009, according to the report from S&P/Case-Shiller. At 125.41, the group’s national index was the lowest since the second quarter of 2002...
Also today, the Institute for Supply Management-Chicago Inc. said its business barometer fell to 56.6 this month, the lowest since November 2009, from 67.6 in April. Figures greater than 50 signal expansion. Economists forecast the gauge would fall to 62, according to the median estimate in a Bloomberg News survey.
There was some better news from the euro area in the form of lower inflation. Bloomberg reports:
European inflation unexpectedly slowed in May, giving the European Central Bank room to keep borrowing costs on hold next month.
Inflation in the 17-nation euro region slowed to 2.7 percent from 2.8 percent in April, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists had forecast no change in the inflation rate, the median of 33 estimates in a Bloomberg News survey showed. Unemployment held at 9.9 percent in April from the previous month, a separate report showed.
There was also some short-term relief in financial markets from the latest news on Greece's sovereign debt problem. From Bloomberg:
European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the group of euro-area finance ministers.
Inspectors from the EU, the International Monetary Fund and the European Central Bank are set to wrap up a review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($158 billion) bailout in the next few days. The EU will then formulate its plan for further aid to Greece, which remains shut out of financial markets a year after the rescue.
3 comments:
I could see an increase in housing construction if builders sense that the declining rates of homeownership will last for a generation, and begin to work on building rental properties.
This seems to be the thread of the confused. I come back when people who understand what is going on in the housing market are back.
The other thing they don't get: if you don't have a job, you can't afford a house. With unemployment (those they are counting) at nearly 10%, wages depressed, and lack of growth, and, let's face it, houses still overpriced from the fraudulent boom, as well as banks now tightening their fists after getting burned by "community organizer's" shack-downs that got them into this mess to begin with, Freddie and Fannie are worse off than before the crisis, and no faith in the economy nor the government. It's still a mystery to the left why the housing market is still in the toilet? I don't know whether to fear their stupidity or arrogance. Perhaps both.
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