U.S. Home Sales: Are We Just Celebrating California?

Last week’s release of December new home sales (which are recorded as contracts signed to purchase a home) showed that sales jumped by 17.5% m/m, following in the wake of the strong existing home sales report, which showed home resales jumping 12.3% m/m. Looking more closely at the data, the gain was driven by the West region where sales jumped by 72%. Sales were modestly higher in the South and Midwest, while sales in the Northeast fell back. Previously, the existing home sales report, which counts home sales as contracts closed on a home, was positive across regions, but showed the biggest monthly jump in the West region, in both November and December. Meanwhile, the pending home sales report, which is based on contracts signed and leads existing home sales by a month or two, rose 16.9% in November, before collapsing by 13.2% m/m in the West in December.

U.S. Employment: Less Than Meets the Eye

As we expected, November’s bleak employment report was a blip, and the pace of job creation of December is more consistent with our reading of the economy, as shown in our 2011 U.S. Outlook.  The December report fell short of expectations and definitely short of what one would hope to see at this stage of the recovery. A look at the details shows that while the economy continues to create jobs on net (and one should hope so 18 months after the official end of the recession), the pace of job creation is not accelerating.  A net of 1.2 million jobs were created in 2010 (only 72,000 since the official end of the recession in June 2009), after over eight million were lost during the recession. The good news is that while hires are staying level, separations are declining.

RGE’s Wednesday Note – No Comfort in November for U.S. Employment

With payrolls growing by an anemic 39,000 and expansion in private payrolls slowing sharply to 65,000, the November U.S. employment report was quite disappointing. Given the slight improvement in other recently released economic data, we expect subsequent reports to paint a better picture than this latest appraisal, and upward-revised data for October and September offer a reminder that November data are subject to revision. Nevertheless, the strength of the economy clearly remains inadequate to create jobs quickly enough to bring about a significant, near-term reduction in the now 9.8% unemployment rate. In “U.S. Employment Report: A Disappointing November,” available exclusively to clients, we examine the recent data for signs of the employment situation going forward.

November Disappoints for Jobs

The November employment report was quite disappointing, with payrolls growing by an anemic 39,000 while expansion in private payrolls slowed sharply to 65,000. Meanwhile, with the household survey showing another drop in employment, the unemployment rate ticked up to 9.8%. The median duration of unemployment climbed, and wage growth stalled. This report stands in contrast […]

RGE’s Wednesday Note – A Spanish Inquisition

Contagion has taken hold of Spain, with respect to both the sovereign and the banking system, in the wake of Ireland’s financial troubles and bailout application. In contrast with Greece, where the key vulnerabilities are in the public sector, both Spain and Ireland have run up large private sector imbalances following real estate booms and busts. In “Comparing Spain With Ireland and Other PIIGS: Better in Some Ways, More at Risk in Others,” available exclusively to clients, we shed light on Spain’s balance sheet vulnerabilities to assess liquidity and solvency risks in comparison with Ireland and the other PIIGS (Italy, Greece and Portugal).

Comparing Spain With Ireland and Other PIIGS: Better in Some Ways, More at Risk in Others

Contagion is spreading from Ireland to Spain, which shares some key vulnerabilities in the wake of its real estate boom/bust and large non-performing loan overhang in the banking sector. A house price comparison shows that the housing bubble in Spain was more pronounced than in the United States but less pronounced than in Ireland.

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