Thursday, January 29, 2009

Better Late Than Never: Economic Data Review

Several important economic reports were released today. They all had one thing in common: the economy is far from okay. This falling chain of dominoes has been set in motion by the real estate bubble.

New home sales have fallen off the proverbial cliff. Over supply and ever tightening credit standards are the culprits, the later being covered in previous posts regarding bank reserves.

Without robust new home sales, one would expect durable goods sales to suffer as well. As covered in an earlier post, durable goods are products such as appliances, home furnishings, electronic equipment, etc.

Without robust durable goods sales, one would expect job losses. Initial jobless claims have been rising and now stand at multi-year highs.

Continuing claims are rising as well. It is becoming increasingly difficult to find a job after termination.

Some members of the press corps have dismissed this data because the population has grown since the last time the U.S. experienced similar job losses. To those Pollyannas: the above graph lets us know that we have surpassed RELATIVE highs in the number of jobless claims as well

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