Economic Indicators, Stock Market & Investment Reports

7.31.2009

U.S. recession is near an end

The pace of the American economy decline is waning as the U.S. gross domestic product fell at a seasonally adjusted 1.0% annual rate April through June in the first estimate of second-quarter GDP. It fell 6.4% in the first quarter and 5.4% in the fourth quarter, at the pit of the recession.

GDP, a broad gauge of the country’s output, has now fallen four-consecutive quarters, the first time that has happened since quarterly records began being kept in 1947.

Government spending, bolstered by the first payouts from a $787 billion stimulus package, propped up the economy and accounted for 20 percent of the country’s output.

The recession began in December 2007, according to the National Bureau of Economic Research. The nonprofit research group uses a broader definition of a recession than do many economists, including industrial production and employment. Another popular definition of a recession is two consecutive quarters of a shrinking GDP.

Many economists expect a rise in GDP starting this quarter, suggesting the recession is at or near its end. They say that even if the economy has bottomed, the recovery over the coming months or possibly years many be painfully slow.

Bright spots have been seen in stock markets, corporate profits, some housing markets and the pace of job losses. New-home sales rose a fourth time in six months during June as buyers jumped to take advantage of fallen prices for property.

Unemployment climbed to 9.5 percent in June, leaving a total of 15 million people out of work and looking for jobs. Generally the job market tends to follow the rest of the economy, as employers wait to hire more workers until their businesses strengthen. This means the threat of sustained, double-digit employment in coming months remains.


Related links:
Investors smell a recovery
Equity volatility subside, interest-rate volatility shot up

7.08.2009

Equity volatility subsided, interest-rate volatility shot up

Confidence in equities is returning, but investors fret of inflation

SMARTINMONEY. Equity volatility index (VIX) has slowly subsided and is now down to pre-Lehman levels, a sign that investor confidence is returning.



But as volatility has subsided in equities, it has popped up in debts. The implied volatility of interest-rate swap options has shot up in recent months, indicating that investors are uncertain about long-term interest rates. Ten-year Treasury bond yields have swung between just over 2% and almost 4% since December. Although many countries are experiencing mild deflation, investors fret and rush to protect themselves. Read full article ...

7.03.2009

Another disappointing month for U.S. job market

The U.S. unemployment rate rose for the ninth straight month, climbing to 9.5% from 9.4%, and hitting another 26-year high in June.

The battered labor market took a step backwards last month as employers trimmed more jobs from their payrolls in June. There was a net loss of 467,000 jobs in June, compared with a revised loss of 322,000 jobs in May. This was the first time in four months that the number of jobs lost rose from the prior month.

Nearly 3.4 million jobs have been lost during the first half of 2009, more than the 3.1 million lost in all of 2008.

7.02.2009

Brighter data on American house prices

Many think that the worst is over even though house prices in America were still roughly 18% lower than a year earlier. The latest Case-Shiller indices, released on June 30th, showed that prices continued to fall in April. The ten-city index was 0.7% lower than a month earlier, and the 20-city index went down by 0.6%. But these falls were the smallest since June 2008.

The number of foreclosures in process rose by 22% in the first quarter of this year, and that the number of prime mortgages with payments at least 60 days late went up by 20%.


The government is stepping up its efforts to get people to take part in its anti-foreclosure program. Many look to housing to lead a broader economic recovery; they also believe that house prices indirectly affect consumer spending, both by allowing people to borrow against the value of their homes.