Skip to comments.Consumer Confidence, Flippers and Other Headaches for Housing
Posted on 02/07/2013 1:10:04 PM PST by whitedog57
The Bloomberg Consumer Confidence Index was released this morning and it shows slight improvement to -36.3. Consumer confidence has not been above -30 since 2008. A still sluggish housing market (despite record low mortgage rates) is partly to blame. The worst recovery since WWII is also to blame.
But what is really noticeable in the chart is that Consumer Confidence fell below 0 in the latter half of 2001 and only breached 0 on the upside for a brief time in Q1 2007. Apparently, the governments efforts to push home ownership did not placate nervous investors after the recession of 2001.
Adding to consumer woes is the sluggish job market. Initial jobless claims fell by a meager 5,000 from the previous week on a seasonally massaged basis. Even on a seasonally adjusted basis, there has not been much improvement in jobless claims in the past year.
Unadjusted claims ROSE 16,.700 to 386,200 for the week ending February 2. Its better than the IJC following the Holiday season!
Nonfarm output fell for Q4 2012 by 2.0%. Notice that nonfarm output has actually fallen since the END of the recession in 2009. AND this is the WORST Q4 since the end of the recession.
When we combine this news with the downward drift in wages and salaries as a % of GDP, youd better think twice about your parents home ownership recovery.
Add in the restrictive Dodd-Frank and CFPB rules, and youd REALLY better think twice!
Also add a dash of flippers helping to drive up prices in many areas with foreclosures, and we have a partay! Flippers arent a big thing, but the rise in housing prices are misleading for the general economy.
They call them flippers, flippers (turning over foreclosed houses) faster than lightning
Revolving credit slid by the largest amount since July, while non-revolving credit soared by $18.2 billion in December! At least student loans spiked in December again resulting in big growth in consumer credit outstanding. But not mortgages or other consumer debt.
And we are in the worst recovery since WWII after a recession.
Worst Multiple-Year Economic Recoveries Since WWII
1) June 2009 Present: 7.5 percent growth 2) April 1958 April 1960: 11.7 percent growth 3) May 1954 September 1957: 13.4 percent growth 4) November 1970 November 1973: 16.4 percent growth 5) November 2001 January 2007: 17.2 percent growth 6) March 1975 January 1980: 23.2 percent growth 7) October 1949 July 1953: 28.7 percent growth 8) November 1982 July 1990: 37.3 percent growth 9) March 1991 March 2001: 42.1 percent growth 10) February 1961 December 1969: 51.2 percent growth