July 2012 U.S. Economic Fundamentals

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    Rising home prices bring 700,000 Americans above water

    Rising home prices helped more than 700,000 homeowners regain equity in their homes during first quarter, but 11.4 million borrowers still owed more on their mortgage than their homes were worth, according to the latest report from data aggregator CoreLogic.


    The number of U.S homeowners with negative equity declined by 6 percent in the first quarter compared to the fourth quarter, leaving 23.7 percent of all homes with mortgages underwater. That's down from 25.2 percent in the fourth quarter.



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    Airbus plans new factory in Alabama

    NEW YORK (CNNMoney) -- European aircraft manufacturer Airbus announced plans Monday to build a new facility in Alabama to produce commercial airliners.


    Adam Buck, a spokesman for the mayor of Mobile's office in Alabama, said the $600 million facility will begin construction next year and will generate 1,000 permanent new jobs. It will be located on the site of a former Air Force base, where Airbus already has an engineering facility, Buck said.



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    U.S. retail sales fall for third straight month

    WASHINGTON —U.S. retail sales fell for a third straight month in June as demand slumped for everything from cars and electronics to building materials, a sign the economic recovery is flagging.


    Retail sales slipped 0.5%, the Commerce Department said on Monday.


    It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2%.



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    10 American cities struggling with foreclosures


    In May, there were 205,990 foreclosure filings on U.S. properties, according to latest foreclosure report from Realty Trac. That's up 9 percent from April, but down 4 percent from a year ago, 

     


    More worrisome though, May foreclosure starts (default notices or scheduled foreclosure auctions) jumped 16 percent from a year ago, after 27 straight months of year-over-year declines.



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    One crucial indicator shows the U.S. economy isn't slowing at all

     

    The mainstream consensus has lately been that the economy is slowing. Based on my tracking of federal revenues in real time, I suspect that that view is incorrect. Instead the recent data reflects only normal oscillations within the ongoing slow growth trend.


    Total federal tax collections, including withholding taxes, are available to us with just a one day lag in the US Treasury’s Daily Treasury Statements, which makes them an excellent analytical resource. Withholding is mostly for compensation, and thus it is a good measure of the economy’s strength. However, it is extremely volatile day to day so I rely more on a monthly moving average of the 10 day total collections, comparing that with the prior year. Smoothing sacrifices a bit of timeliness to get a clearer picture of the trend without losing too much of the edge that the daily data provides. Unfortunately, I have found even the 10 day total data too noisy for meaningful comparison so I’ve had to resort to additional smoothing. As a result the smoothed data is a little slow, so I also look at raw month to date data after mid month.



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    U.S. poverty on track to reach highest level since the 1960s


    WASHINGTON (AP) — The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

     


    Census figures for 2011 will be released this fall in the critical weeks ahead of the November elections.



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    U.S. sales of previously occupied homes drop 5.4% to 4.37 million, lowest since October

    WASHINGTON - Americans bought fewer homes in June than May, indicating the weak economy could make a modest housing recovery choppy.


    The National Association of Realtors said Thursday that sales of previously occupied homes fell 5.4 per cent in June to a seasonally adjusted annual rate of 4.37 million homes. That's the fewest since October.



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    U.S. apartment vacancies fall below 5%


    Preliminary figures from real estate research firm Reis
    show that the national vacancy rate in the apartment sector dropped 20 basis points in the second quarter and now stands at 4.7 percent—the lowest level in a decade. The figure is 120 basis points below the same time a year ago.



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    Seven signs that the recession risk in America is rising

    The Philly Fed in the red for months on end, soaring food prices and tepid retail sales: We are living in strange times, says Gluskin-Sheff chief economist David Rosenberg.


    “Makes you want to go out and bet on the horses,” said Rosenberg. “We are seeing things happen that are extremely rare.”


    Rare and risky — Rosenberg has identified seven uncommon occurrences on America’s economic landscape that suggest the recession risk is rising.



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    Five years after the U.S. real estate bubble burst, home values have reached bottom

    After five long years of a housing recession, U.S. home values have reached a bottom, according to Zillow’s second quarter Real Estate Market Reports, which were released today.


    U.S. home values logged their first annual increase since 2007, rising 0.2 percent over the past year. Nearly one-third of metros covered by the Zillow reports showed annual increases in home values.


    There appears to be good news on the horizon as well. The Zillow Home Value Forecast shows values will increase in two-fifths of markets over the coming year, with the biggest increases in the Phoenix and Miami markets, where home values are predicted to rise 9.9 percent and 6.1 percent, respectively.



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    U.S. jobless claims fall, still volatile due to auto jobs

     

    The number of Americans filing new claims for jobless benefits fell last week to near a four-year low but an unusual pattern for summer factory shutdowns kept hopes in check that the weak labor market was improving.


    Other data on Thursday showed new orders for long-lasting U.S. manufactured goods rose in June although a gauge of planned business spending plans dropped, pointing to a slowdown in factory activity.


    Economists said the two economic reports did little to change the view that the economy was stuck in a rough patch.


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    U.S. housing market lays new foundation

    The U.S. housing market is finally awakening from its six-year nightmare.


    After suffering through years of falling prices and moribund sales, the market is witnessing a rise in home values and a burst of new construction.


    The renewed activity is providing a small but significant boost to the broader economy, which is struggling to grow at anything beyond a modest pace.



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    Miami property market continues its recovery with prices and sales up


    Miami home prices and sales are continuing to be buoyant with strong gains in June, marking seven consecutive months of appreciation, the latest data shows.


    The median sales price of condominiums in Miami Dade County, for example, increased a by 34% to $160,000 compared to a year earlier, the figures from the Miami Association of Realtors reveal. And the median sales price of single family homes rose 5% to $194,250.


    ‘The remarkable rise in Miami home prices over the last seven months reflects the strong demand that exists for local properties,’ said the association’s chairman Martha Pomares.



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