The state of the economy

An excellent briefing on where things stand from John Williams of the San Francisco Fed. (Thanks, once again, to Mark Thoma at Economist's View.)

* The housing slump has deepened further. Sales of existing homes fell 8 percent in September and are down 19 percent over the past 12 months. New-home sales rebounded in September, but are still down 23 percent over the past year. Inventories of new and existing homes for sale are at high levels, putting downward pressure on house prices and building.

* House prices in ten metropolitan areas fell on average about 5 percent in the 12 months through August, according to the Case-Shiller Index. Futures contracts on this index imply investors expect house prices in these cities to decline about 8 percent over the next 12 months.

* With demand soft and supply plentiful, housing starts plummeted 10 percent in September, bringing the year-over-year decline to over 30 percent. Housing permits likewise are in a deep descent, falling 7 percent in September and down 26 percent over the past year.

* Despite the bad news in the housing market and the turmoil in financial markets, consumers continued to spend in September. More recent data, however, suggest consumers may be tightening their grips on their pocketbooks. Sales of motor vehicles ticked down in October. Readings of consumer confidence and sentiment have moved down considerably over the past few months. Moreover, the recent surge in energy prices should damp consumption in coming months.


Be sure to open the charts (pdf) and look at the housing data. Scary. (Especially if the peak in prices marks your entry into the market--as in my case, to the month. Bear that in mind when I next dare to make a prediction.)

Presented by

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In