Friday Economic Snapshot: The housing recovery continues
Now that we’re settling into dog days of summer, the US economy has entered a period of malaise that’s not uncommon for the sweatiest, stickiest part of the year. As Q2 earnings come in from a range of industries, the stock market has fluctuated without drastic changes one way or another, yet economic news isn’t quite as cheerful and bright as it was in the spring and earlier parts of summer.
In the past week we’ve seen an increase in mortgage delinquencies, a slight increase in weekly unemployment claims and mixed manufacturing data from across the country’s regions. At the same time, new home sales numbers that came in were unquestionably solid, continuing the so-called housing recovery.
This week is mixed, with a touch of summer doldrums. Let’s dive in.
After falling for the last five months, June showed the first spike of mortgage delinquencies. Released by Lender Processing Services, Inc., the total U.S. loan delinquency rate — loans that are 30 or more days past due, but not in foreclosure — is at 6.68 percent. This is a month-over-month change of 9.91 percent.
Adding a bit of geographic color, the states with the most delinquent loans include Florida, Mississippi, New Jersey, New York and Maryland. On the other side of the coin, those with the lowest rates include Wyoming, Montana, Alaska, South Dakota and North Dakota. Those Dakotas really are the Promised Land these days. Perhaps the government should fund some dams to create some more reservoirs so these economic/petrol gold mines can become bigger players in the boating market.
The latest installment of the weekly seesaw from the Department of Labor, this week’s unemployment insurance weekly claims report showed that seasonally adjusted initial claims was 343,000, an increase of 7,000 over the previous week.
As we’ve followed this data, this number is well within the range we’ve seen for months. The four-week moving average was 345,000, a decrease of 1,250 from the previous week’s revised average of 346,500.
With no big manufacturing gains, upticks in private sector hiring or new stimulus, don’t expect these numbers to edge down anytime soon.
New Home Sales
And now for some good news… As usual these days, it comes from the perpetually rebounding housing market. Sales of new single-family houses in June 2013 were at a seasonally adjusted annual rate of 497,000 according to the U.S. Census Bureau and the Department of Housing and Urban Development. This solid total is up from 459,000 in May.
The report states that this is 8.3 percent above the revised May rate of 459,000 and is 38.1 percent above June 2012’s estimate of 360,000.
This is good news any way you slice it, and should continue to fuel pickup truck sales, durable goods orders and many other areas of the economy. Hopefully it can drum up some more jobs along the way.
As Brunswick reported mixed Q2 results that showed a modest four percent increase in net sales and the Marine Products Corp family of boats jumped by 9.8 percent, it’s clear the economy is still marching forward, not stopping. That said, most numbers aside from housing aren’t quite as optimistic as they were in the beginning of 2013.
The stock market has taken it all in stride, staying in bull market territory. However, as summer begins to eventually wind down (sorry – nobody likes that kind of talk in July!), there’s already talk of political debt ceiling battles and a possible government shutdown. As we’ve seen, political hostage taking really rattles the market and has the potential to impact the economy. Let’s hope our elected officials keep this in mind, as no industries need further pressure on top of the already deep sequester cuts.
So have no fear — all of that potential chaos is months away and it’s the heart of summer. Get out there and enjoy it!