More Bad News Than Good On The Economic Front

Well it’s Thursday and that means the weekly jobs report. There is also a bit of other economic news bouncing about.

Jobs

New claims for unemployment benefits fell by 47,000 to 522,000. The four-week moving average declined from 607,000 to 584,500. Once again, the seasonal adjustments make the numbers look better than what is really happening. Permanent layoffs and earlier seasonal shutdowns of auto plants have thrown the adjustments a curve. Still, the decline in the four-week moving average represents a continuing positive trend but it’s still an awful number. (more)

Philly Fed

The Philidelphia Federal Reserve Bank’s monthly survey of manufacturing activity slipped to minus 7.5 from minus 2.2 in June. The June report was considered overly strong so the decline was not unexpected. Still it means that the economy is contracting not expanding and the downturn is probably a good indication of how bumpy the recovery is likely to be. (more)

Foreclosures

RealtyTrac released its semi-annual report on foreclosure activity. It’s ugly. Things are getting worse. Here is what they had to say:

RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.

Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.

“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”

It’s an ugly world out there. Banks might be making lots of money and if you look hard enough you can find some second derivative type news but the bottom line is that the fundamentals are horrible and in the case of housing apparently continuing to deteriorate.

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