While the media's expert analysts( "I got one right two years ago, but please don't mention the 80 others that were wrong") continue pushing the notion that recovery is happening, I'll stand by my contention that we ain't seen nothing yet.
Unemployment 7% mid 2003(moved back from June post)
Do I hear a Karen Carpenter song playing?
Message 17568133
To:scottonstocks who wrote (3781)
From: scottonstocks Thursday, Jun 6, 2002 6:05 PM
View Replies (3) | Respond to of 4258
Unemployment to hit 7% by year's end
This would be more in line with historical avgs and must occur before we see a real economic turnaround. Probably qtr 1-2 in 2003
Housing Starts Slow, Jobless Claims High
Thursday September 19, 3:11 pm ET
By Joanne Morrison
WASHINGTON (Reuters) - Reports on Thursday showing a slide in new U.S. housing projects and a persistently high number of workers seeking unemployment aid strengthened signals the U.S. economic recovery is stuck in the slow lane.
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U.S. housing starts fell 2.2 percent in August, their third monthly decline in a row, the Commerce Department reported on Thursday as the housing sector, while still at historically high levels, lost more steam than analysts were expecting.
Any sign of a slowdown in housing, one of the economy's mainstays during the 2001 slump and through the still-hesitant return to health, could be worrying although some analysts said there were signs a pickup was possible later in the year.
At the same time, the Labor Department said first-time applications for jobless insurance stood at 424,000 in the week ended Sept. 14, a level most economists say indicates a weak labor market. That marked a fall of 9,000 from the prior week, but was not enough to convince economists the labor picture is improving.
"Today's numbers confirm that a shallow recession is being followed by an equally modest recovery," said Edgar Peters, economist at Pan Agora Asset Management in Boston.
Underscoring the softness of the job picture, the four-week average of initial claims, a less volatile measure of employment conditions, rose to its highest level since May.
The manufacturing sector is doing little to help the recovery, according to the Federal Reserve Bank of Philadelphia's latest index of business conditions in the mid-Atlantic region. Although activity improved modestly in September, overall manufacturing conditions in the region remain sluggish, the bank said.
ROBUST RECOVERY IN QUESTION
Economists say that while housing starts are high by historical standards and the U.S. unemployment rate, which was at 5.7 percent in August, continues to hover at what was once considered full employment, prospects for a robust recovery remain in question.
"A full-fledged economic and profits recovery continues to be pushed off into the future, leaving investors in an uncomfortable holding pattern," Peters said.
U.S. Treasury Secretary Paul O'Neill said on Thursday the recovery was not a smooth one, but he still thought the economy was on track to generate a 3- to 3.5-percent pace of growth by the end of the year. "It's a bumpy road to recovery, " he told a group of American businessmen, adding that the recovery would obviously not be "smooth, uniform and yogurt-like.."
White House economic adviser Glenn Hubbard agreed the economy faces challenges, citing a lull in business investment as a key concern. "That continues to be the wild card," he told a group of economists. "Only with robust investment, will labor markets firm."
Despite the fall in housing starts, analysts are not sounding the death knell of the U.S. housing boom. Most expect activity to pick up in September, aided by the lowest financing rates in decades.
"While construction activity eased a bit in August, the level is still quite solid and permit requests are high enough to keep the sector in good shape for a while," said Joel Naroff, of Naroff president and chief economist of Naroff Economic Advisors in Holland, Pa.
But some economists warn the starts data suggest that the housing sector is unlikely to sustain recent levels of growth.
"It feels like the market probably did hit its highs in early part of year partly because of (mild) weather back then," said David Seiders of the national Association of Home Builders.
U.S. Treasuries rose on Thursday after release of the data, which raised expectations the Federal Reserve may opt to lower interest rates before the year ends.
The Fed's policy-setting Federal Open Market Committee is scheduled to meet next Tuesday to discuss interest rates, but most Wall Street firms are expecting policymakers to keep rates unchanged.
In afternoon activity, the Dow Jones industrial average was down 160 points, while the technology-laced Nasdaq Composite Index was down 30 points.
GROUND-BREAKING SLIDES
Ground-breaking for new homes slid to a seasonally adjusted annual rate of 1.609 million units in August from a downwardly revised 1.645 million rate in July. Building permits, an indication of builder confidence, tumbled 2.5 percent to 1.669 million units from 1.712 million units the preceding month.
The starts number fell short of expectations of analysts polled by Reuters, who had forecast a 1.674 million unit pace.
Single-family housing starts, the biggest category of building, fell 4.4 percent to a 1.252 million unit annual rate. Multifamily starts rose 8.2 percent.
Regionally, housing starts rose 9.4 percent in the Northeast and 3.1 percent in the South, but fell 18.7 percent in the Midwest and 1.6 percent in the West. |
