Horrid Data: Housing, Jobs, Durable Goods

Inquiring minds are looking at weekly unemployment claims.

In the week ending Sept. 20, the advance figure for seasonally adjusted initial claims was 493,000, an increase of 32,000 from the previous week's revised figure of 461,000. It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 50,000 claims to the total. The 4-week moving average was 462,500, an increase of 16,000 from the previous week's revised average of 446,500.

The spin above blames hurricanes. I do not buy it, at least to the extent claimed. The fact of the matter is this economy is rapidly falling apart.

In December 2007 I stated that every jobs report this year would be bad. So far we have had 8 consecutive horrid jobs reports. We have lost jobs every month this year. September will be the 9th month in a row. One cannot blame hurricanes for this data series.

August Home Sales Drop 34.5%

The disaster in home sales continues. The U.S. Census Bureau has just issued the New Residential Sales Report for August 2008. Let's take a look.

Sales of new one-family houses in August 2008 were at a seasonally adjusted annual rate of 460,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 11.5 percent (±11.7%) below the revised July rate of 520,000 and is 34.5 percent (±7.3%) below the August 2007 estimate of 702,000.

The median sales price of new houses sold in August 2008 was $221,900; the average sales price was $263,900. The seasonally adjusted estimate of new houses for sale at the end of August was 408,000. This represents a supply of 10.9 months at the current sales rate.

Calculated Risk has a nice graph and commentary at August New Home Sales: Lowest August Since 1982.

click on chart for sharper image

Notice the red columns for 2008. This is the lowest sales for August since 1982 (not seasonally adjusted, 39 thousand new homes were sold in August 2008, 36 thousand were sold in August 1982).



click on chart for sharper image

The second graph shows New Home Sales vs. recessions for the last 45 years. New Home sales have fallen off a cliff.

Calculated Risk has two more charts on housing inventory and month's supply of homes that inquiring minds will want to check out.

Durable Goods Disaster

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders August 2008 is out. Let's take a look.

New Orders

New orders for manufactured durable goods in August decreased $9.9 billion or 4.5 percent to $208.5 billion, the U.S. Census Bureau announced today. This was the
largest percent decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8 percent July increase.

Excluding transportation, new orders decreased 3.0 percent. Excluding defense, new orders decreased 5.0 percent. Transportation equipment, down two of the last three
months, had the largest decrease, $5.1 billion or 8.9 percent to $52.3 billion.

Inventories

Inventories of manufactured durable goods in August, up thirteen of the last fourteen months, increased $2.4 billion or 0.7 percent to $338.5 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent July increase. Primary metals, up nine consecutive months, had the largest increase, $0.9 billion or 2.5 percent to $34.9
billion.

Capital Goods

Nondefense new orders for capital goods in August decreased $5.6 billion or 7.5 percent to $68.9 billion. Shipments decreased $2.0 billion or 2.8 percent to $67.2
billion. Unfilled orders increased $1.7 billion or 0.4 percent to $481.3 billion. Inventories increased $1.2 billion or 0.9 percent to $139.7 billion.

Defense new orders for capital goods in August increased $0.9 billion or 9.4 percent to $9.9 billion. Shipments decreased 0.2 percent to $9.1 billion. Unfilled orders increased $0.8 billion or 0.6 percent to $140.1 billion. Inventories decreased $0.2 billion or 1.2 percent to $19.1 billion.

The durable goods report was an absolute disaster. Orders plunged and inventories continue to rise.

Housing, jobs, and durable goods were all disasters. Expect to see production cutbacks and rising unemployment. Anyone who thinks the US is not in recession is in absolute fantasyland.

Comments

[The World's...:]

And Bernanke stated that withou the bailout the United States will go to a recession.

2008 Sep 26 12:32 PM

[bonifiedhus...:]

Why are so many homebuilders and XHB trading where they are? It seems clear that housing still has a long way to fall, and we are in a worse position than in July when they hit their lows.

PHM, DRI, TOL among others are well off their lows. The market makes no sense. Of course, Jesse Jackson and House Republicans are both protesting the "Bailout" so we live in weird times...

2008 Sep 26 12:34 PM

[Jason Rines...:]

Thanks Mish for posting this. Remember all of those months in the last year you posted declining job losses but almost no comments? To pay debt and have a recovery of any kind, skilled jobs must be created which requires billions of investment from the private sector and government. And to your point World's Worst Stock Picker, the coming depression will be called a recession. It will be the non depression-depression being reported like this recession since January was the non-recession recession.

2008 Sep 26 12:51 PM

[Chris B:]

OK, so a few investment banks go bankrupt, a few funds lose money on their investments, and we go through a recession. It happens periodically. Big deal! Recessions are buying opportunities, and they eventually end.

But now it appears the govt. is whipping up a panic with calls for immediate action. They tell us we must dilute the currency immediately or risk losing another 25% on our investments! Oh my!

Well, recessions can be dealt with and are no big deal long-term. Currency dilution, however, is playing with fire. Ask Argentina.

2008 Sep 26 01:38 PM

[bigqueue:]

Massive debt is playing with fire too......especially when there are no plans to repay. Faith is lost and should the house of cards ever fall (and this might be what we see now) so goes the illusion. (and your value / money)

2008 Sep 26 02:33 PM

[Landbuyer:]

Recession is when your neighbor loses their job. Depression is when you lose your job.

2008 Sep 26 04:23 PM

[moonbat1775:]

Revolution is when politicians and bankers loose their HEADS.

2008 Sep 26 07:43 PM

[moonbat1775:]

make that "lose". I seem to have lost mine.

2008 Sep 26 07:49 PM

[fnu149:]

USD currency devaluation in a prolong period of time will be a disaster. It will cause a huge deals of inflation since we rely on import so much. 700 billion deal can only delay what is forthcoming. The canon is firing at you from every direction.

2008 Sep 26 08:43 PM

[Metzenbaum ...:]

Gentlemen, relax your sphincters.

The 'bailout-as-trash-tabl... is getting stale.

While this is the end of American hegemony, on the 'day after', a farmer somewhere will have eggs to sell to someone with dollars. And so on.

Price discovery will reveal what things are worth, just like always. Maybe Manhattan will be a metaphorical smoking crater, so? They screwed up and it's time for reversion to mean.

FWIW, CNBC must exist for mouth breathing morons.

Thanks Mish for your insights.

2008 Sep 26 09:00 PM

[I need a ba...:]

Yes those stats are bad ... but the overriding worst stat is the ever increasing national debt at $10 trillion +. We need a really good accountant or a magician to make this disappear.

And who is up for election? Another lawyer (already have way too many of those) and a guy who served his country well.

Watch out below!!!!

2008 Sep 27 09:51 AM

[pepe:]

To Sojourner; You need to take a deep breath, 2 aspirins, and take a look at your comment again. Do you really think your kids would be happy with their Daddy's explanation of the world's economic problems?

2008 Sep 27 02:45 PM

[moonbat1775:]

Pepe,

I suggest Jews immediately forsake fractional reserve banking. I say this as a friend. One day that system will get the blame it deserves; it would be best if they drove in the stake themselves. Please read von Mises, Hayek, and Rothbard to learn the error of your ways.

2008 Sep 27 03:39 PM

[moonbat1775:]

Pepe, I did not mean your errors, I meant the errors of fractional reserve bankers, Jewish or not.

2008 Sep 27 03:40 PM

[pepe:]

To Moonbat1775,
I appreciate and share your dislike for fractional reserve banking, a major cause of our present world financial crisis. And I thank you for your pointing out that fractional reserve bankers may be of any ethnic origin; just as all gangsters aren't Italian.

My ire was raised by Sojourner's venting his anti-Semitic bias in his irrational explanation of the persons responsible for this crisis.

2008 Sep 27 09:28 PM