So, initial unemployment claims fell by 38,000 to 550,000 (seasonally adjusted), which is good, but continuing claims* rose by 69K to 6.31 million, and this number does not include folks who have exhausted benefits, and those who are getting extended benefits, and any number much above 400K is bad news anyway, so this week is just less bad than expected.
We’ve also now had a 5th straight month of pending home sales increases, which seems like good news, though the foreclosure rate seems to still be on the “getting worse” side of the trend, (more in another post) and this includes the fact that somewhere between 30% and 50% of current home sales are in some manner distressed sales.
It’s likely that the continued rise in bankruptcy filings (click on pic for bigger picture), has a lot to do with this.
BTW, this is one of the problem that I have with the Obama/Geithner/Summers “stimulus”: it has very little to do with ordinary people in pain, and a lot to do with keeping the banks healthy.
The fake economy is a higher priority than the real economy.
Which is why the Institute for Supply Management’s Non-Manufacturing Index and the Manufacturing Index both fell again in July, while in the UK, where the stimulus was, you know, stimulus, and not a half baked plan which included inefficient tax cuts, and genuflecting to conservatives in the name of “bipartisanship”, manufacturing rose for the first time in 16 Months.
We do have some good news in real estate, with June pending homes sales increased for the fifth straight month, though I’m still of the opinion that this is largely vulture investors looking for cheap bargains.
Additionally, mortgage rates fell, though one cannot be too certain about how long that will last, as the yields on the mortgage backed bonds hit a 2-month high.
In any case, the good initial claims numbers strengthened the US dollar, which in turn pushed oil down from yesterday’s 6 week high.
*Full disclosure, this includes me…..Any engineering openings in the greater Baltimore area would be very much appreciated.