US Economy Could Recover Much Sooner Than Expected pt 3

[eXpat]

CBO projects record-high $1.5 trillion budget deficit this year

The Congressional Budget Office is estimating that the federal budget deficit will hit $1.5 trillion this year, another new record.

The non-partisan budget agency is also predicting that next year's budget deficit will drop to $1.1 trillion.

The new report comes a day after President Obama pledged to work with congressional Republicans to reduce budget deficits and accumulated federal debt.

It also comes as Congress soon decides on raising the federal government's $14.3 trillion debt ceiling, a move some Republicans are resisting unless it is accompanied by major spending cuts from the administration.

The Associated Press notes that the higher deficit estimate reflects "bipartisan legislation passed in December that extended Bush-era tax cuts, unemployment benefits for the long-term jobless and provided a 2 per cent payroll tax cut this year. That measure added almost $400 billion to this year's deficit, the CBO says."

http://content.usatoday.com/communities/theoval/post/2011/01/cbo-projects-15-trillion-budget-deficit-this-year/1

It is a record deficit in dollar terms, and almost equals the 10% of GDP overspend recorded by Washington in 2009 at the depth of the recession.

The Congressional Budget Office (CBO) revised up an earlier deficit estimate of $1.07tn after President Obama agreed a new stimulus package with Congress.

That package extended Bush-era tax cuts and prolonged unemployment benefits.

"The United States faces daunting economic and budgetary challenges," said the CBO in the introduction to its latest budget outlook report.

http://www.bbc.co.uk/news/business-12291143

[eXpat]

Only 47% Of Working Age Americans Have Full Time Jobs

VK, roving reporter for The Automatic Earth, has been playing with the numbers from the January 7 employment report issued by the U.S. Bureau of Labor Statistics. It seems valuable to look at unemployment from this, a different, angle. Some of it may even surprise you.

The total non institutional civilian labor force (Americans 16 years and older who are not in a institution -criminal, mental, or other types of facilities- or an active military duty) is reported as 238.889 million. Of these, we see:

* Employed: 139.206 million people (58.3% of labor force)
* Unemployed: 14.485 million people (6.1% of labor force)

Obviously, that can't be the total picture, we're only at 64.4%. This is why:

* Part time employed for economic reasons: 8.931 million people. This concerns people who want a full-time job but can't get one.
* Part time employed for non-economic reasons: 18.184 million people. Non-economic reasons include school or training, retirement or Social Security limits on earnings, but also childcare problems and family or personal obligations.

But the by far largest category "missing" from both the Employed and Unemployed statistics is the "Not In Labor Force": 85.2 Million people.

The BLS definition states: "Not in the labor force (NILF). A person who did not work last week, was not temporarily absent from a job, did not actively look for work in the previous 4 weeks, or looked but was unavailable for work during the reference week; in other words, a person who was neither employed nor unemployed." (Clearly, this does include lot of unemployed people).

To summarize: 108.616 million people in America are either unemployed, underemployed or "Not in the labor force". This represents 45.5% of working age Americans.

If you count the "Part time employed for non-economic reasons", you get 126.8 million Americans who are unemployed, underemployed, working part time or "Not in the labor force". That represents 53% of working age Americans.

So only 47% of working age Americans have full time jobs. While the official unemployment rate is 9.4%. Something's missing somewhere.

http://www.businessinsider.com/real-employment-rate-47-percent-2011-1#ixzz1C2PNGfJ1

[eXpat]

A Frightening Satellite Tour Of America's Foreclosure Wastelands

RealtyTrac is out with the total foreclosure numbers for 2010. On the whole things are getting worse.

72 percent of major metro areas saw an increase in foreclosure volume. Although some of the worst hit areas in Nevada, California and Florida improved from 2009, the foreclosure rate in these areas remains shockingly high. If not for some foreclosure suspensions due to the robosigning scandal, these numbers would have been higher.

For a frightening way to visualize the foreclosure crisis, we're borrowing a Google maps technique described by Barry Ritholtz.

link to the article and the maps:
[url]http://www.businessinsider.com/satellite-tour-foreclosure-cities-2011-1?slop=1#slideshow-start#ixzz1CFjS7Vrt[/url]

[Daniel_Plainview]

There's such an overflowing plethora of negative economic news today -- from housing data to durable goods data -- that for now I'll just duplicate a post appearing in the "Sideways Unemployment" thread. I always feel bad for the cornies when their illusion of a "recovery" becomes shattered by the intervention of stark reality. I weep for the cornies ... and empathize with their plight ...

Aw Crap -- Jobless Claims Skyrocket by 51K as Phony Recovery Loses Steam

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending Jan. 22, the advance figure for seasonally adjusted initial claims was 454,000, an increase of 51,000 from the previous week's revised figure of 403,000. The 4-week moving average was 428,750, an increase of 15,750 from the previous week's revised average of 413,000.

The advance seasonally adjusted insured unemployment rate was 3.2 percent for the week ending Jan. 15, an increase of 0.1 percentage point from the prior week's unrevised rate of 3.1 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Jan. 15 was 3,991,000, an increase of 94,000 from the preceding week's revised level of 3,897,000. The 4-week moving average was 3,975,500, a decrease of 39,750 from the preceding week's revised average of 4,015,250.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 482,399 in the week ending Jan. 22, a decrease of 67,491 from the previous week. There were 502,710 initial claims in the comparable week in 2010.

The advance unadjusted insured unemployment rate was 3.7 percent during the week ending Jan. 15, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,593,535, a decrease of 58,900 from the preceding week. A year earlier, the rate was 4.3 percent and the volume was 5,602,357.

The total number of people claiming benefits in all programs for the week ending Jan. 8 was 9,410,977.

linky winky

[Daniel_Plainview]

Nevertheless, hopefully the cornies will take refuge in the likelihood that the Fed will soon unleash QE3, and that the US Govt will soon undergo another round of stimulus spending. Happily, the federal deficit is under control such that massive amounts of Obamian pork-barrel spending won't worsen the fiscal dilemma. Oh, wait ... wait ... hold on ... as just announced within the past 24 hours, the Congressional Budget Office now projects that the 2011 federal budget will show a deficit of $1.5 trillion, or 9.8 percent of GDP. Oh drats. Damn! It looks like the US "recovery" has hit a brick wall. QE4 by the end of the year? How about QE5?

[peripato]

January 27, 2011
The Household Index of Poverty continues to rise

The Household Index of Poverty is the most sensitive calculation of U.S. economic performance and it is rising faster than at any time in history. Poverty in America rose 43% under her leadership, from November 2006 to November 2010.

The Household Index of Poverty is a simple, equal-weighted calculation of the five important statistics regarding poverty: The first two address inflation (food and fuel), the next two include the impact of unemployment (U6 Underemployment and Food Stamp demand) and the last is the Federal Debt, which is the long-term poverty statistic for all households.

<snip>
Table at link.

[OilFinder2]

Cog, you owe me $50.

LINK

If it hadn't been for a big drawdown in inventories, this would have been a big number.

[OilFinder2]

US Economic Momentum Impossible to Deny

By James Kostohryz Jan 31, 2011 12:10 pm

Strong acceleration in US economic momentum is becoming impossible to deny.

Chicago Purchasing Managers reported today that the Chicago ISM PMI accelerated to a reading of 68.8 -- its highest level since July 1988. The Chicago PMI has the strongest correlation to the national PMI. Some highlights were:

* Employment index strengthened to a height not seen since May 1984;
* New Orders index increased to the highest point since December 1983;
* The Production index improved to 73.7 from 72.2, while new orders rose to 75.7 from 71.3. The barometer of production along with new orders rose to its highest level since 2004.
* Order backlogs are breaking out to multi-year highs while lead times for MRO supplies plummeted.
* The Employment index showed a marked improvement, rising from 58.4 to 64.1, which represents a multi-year high.

In other news today, the Commerce Department reported that consumer spending surged 0.7% in December. The increase was made possible by a 0.3% increase in personal income and a decrease in the personal savings rate to 5.3% from 5.5%.

[...]

[eXpat]

Long-term unemployment growing despite economic recovery

As Congress and the White House ramp up their job-creation rhetoric, a growing number of long-term unemployed workers is slowing the pace of the expanding economy and weighing heavily on efforts to reduce the federal budget deficit.

A recent report by Pew’s Fiscal Analysis Initiative shows 30 percent, or 4.2 million of the 14 million, of those who are jobless have been unemployed for a year or more — the federal government defines long-term unemployed as six months or longer — the highest percentage since World War II as of December 2010.

In the last year, the number of long-term unemployed is up 25 percent, from the 3.4 people affected in December 2009, according to the report.

During the severe recession of the early 1980s, the percentage of workers unemployed for six months or longer peaked at 26 percent in 1983.

The nation's jobless rate has remained above 9 percent for the past 20 months. The federal government has continued to provide federal emergency and extended benefits beyond the 26-week limit offered by states, which the Congressional Budget Office says will cost $129 billion this year.

Lawmakers have battled over continued extensions of unemployment benefits with Republicans who insist the program be paid for. Democrats, meanwhile, argue that providing jobless insurance should be considered emergency spending.

The federal government has also increased food assistance and has paid for a greater share of healthcare coverage for those who have been without work for a long time.

The effects of unemployment also reduce federal revenue and potentially lower productivity.

In the current fiscal year, federal spending on unemployment benefits is projected to be five times greater than it was in each of the years immediately preceding the recession. Between 2005 and 2007, when the unemployment rate hovered around 5 percent, federal spending on unemployment insurance ranged between $31 billion and $33 billion, the report said.

http://thehill.com/blogs/on-the-money/801-economy/141151-long-term-unemployment-growing-despite-economic-recovery

[eXpat]

Nearly 11 Percent of US Houses Empty

I usually find the quarterly homeowner vacancy and homeownership report from Census pretty lackluster, but the latest one released this morning was anything but.
America's home ownership rate, after holding steady for a while, took a pretty big plunge in Q4, from 66.9 percent to 66.5 percent. That's down from the 2004 peak of 69.2 percent and the lowest level since 1998.

Homeownership is falling at an alarming pace, despite the fact that home prices have fallen, affordability is much improved and inventories of new and existing homes are still running quite high.

Bargains abound, but few are interested or eligible to take advantage.

More concerning than the home ownership rate is the vacancy rate. The Census tables don't tell the entire story, but they tell a lot of it. Of the nearly 131 million housing units in this country, 112.5 million are occupied. 74.8 million are owned, and that's only dropped by about 30 thousand in the past year. 38 million are rented, but that's up by over a million year over year. That means more new households are choosing to rent.

Now to vacancies. There were 18.4 million vacant homes in the U.S. in Q4 '10 (11 percent of all housing units vacant all year round), which is actually an improvement of 427,000 from a year ago, but not for the reasons you'd think.

The number of vacant homes for rent fell by 493 thousand, as rental demand rose. 471,000 homes are listed as "Held off Market" about half for temporary use, but the other half are likely foreclosures. And no, the shadow inventory isn't just 200,000, it's far higher than that.
So think about it. Eleven percent of the houses in America are empty. This as builders start to get more bullish, and renting apartments becomes ever more popular. Vacancies in the apartment sector have been falling steadily and dramatically, why? Because we're still recovering emotionally from the toll of the housing crash.

http://www.cnbc.com/id/41355854