NY & Philly Fed reports, August housing starts and sales, 2nd Q Flow of Funds, BLS & Census on the states, & romney on the moocher class..

it has been a relatively slow week as relates to new economic releases, and most of the economic blogs were still preoccupied with assessing the benefits & damage of QE3 anyway… if you want to see the whole discussion on the direction that US monetary policy is headed in, there’s about 5 dozen linked paragraphs on it at the beginning of this week’s globalglassonion…otherwise, the political hemisphere of the blogosphere was pretty much focused on romney’s remarks at a private fundraiser, in which he claimed 47% of us are moochers who pay no taxes but “who believe that they are victims,  who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.“; he went on to say “my job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.“… since we’re in the stretch run of the campaign, these comments generated thousands of posts in response (really, google searching for “the 47 percent” over just the past week returns 185,000 links)…briefly, most the 46% of us who dont pay income taxes are either retired (who paid taxes all their working lives), students, unemployed or those making so little at their jobs that the earned income tax credit eliminates their income tax liability; moreover, 61% of those who dont pay income tax do pay payroll tax, which means they have jobs, and when you account for total payroll taxes, their contribution is 15.3% of their income, which is a higher rate than romney himself paid in 2011...

ISM PMI among the few economic releases this week were the first two of the regional Fed reports for September, which give us the first clue as to the direction the September purchasing manager’s index will take…the Empire State Manufacturing Survey from the NY Fed, which also covers part of CT & NJ, produced its lowest reading since 2009 as the general business conditions index fell to -10.41 in September, after it dropped more than 13 points into contraction at -5.85 in August (recall that below zero for these indexes indicates contraction)..most of the empire state subindexes also weakened with this report; the new orders index fell nine points to -14.0, its third consecutive negative reading and its lowest reading since late 2010; the unfilled orders index slipped to -14.9, and the shipments index was down slightly for the month at 2.8, while the inventories index rose to zero, suggesting no change in inventory levels; moreover, the important employment index fell to 4.26 in September from 16.47 in August, and the workweek index went negative, falling to -1.06 from 3.53….the September Manufacturing Survey from the Philly Fed (pdf), on the other hand, did show some improvement over previous months, although the general index remained at contractionary levels for the 5th consecutive month; the survey’s broadest measure of district conditions, the diffusion index of current activity, increased 5 points, to a reading of -1.9the current new orders index rose 6.5 from a negative 5.5 to post a positive 1.0, while the unfilled orders improved by 8 points from a -16.2 to a -8.2however, september’s current shipments index fell nearly 10 points , from  -11.3 to -21.2, and inventories fell from August’s -6.9 to a deeply negative -21.7…meanwhile, both employment related indexes improved; number of employees rose from -8.6 to -7.3, meaning less layoffs, and  the average workweek rose from -14.6 to -7.3, which means the reductions in hours worked are slowing…again, we’ll include bill mcbride’s graph showing these first two september regional Fed surveys with a dashed green line, the composite of all the regional Fed surveys thru august in blue, and the final monthly PMIs as released by ISM as shown in red; the correlation between extended contractions in the series and recessionary periods (the horizontal blue bars) is fairly obvious..

Total Housing Starts and Single Family Housing Starts there were a few reports on housing data for August this week…the first one we’ll look at is Permits, Starts and Completions from the Census Bureau (pdf); you may recall these reports from the census have a large margin of error; nonetheless, by looking at the revisions and taking the long view we can see how housing is recovering – or not…in August, privately-owned housing starts were at a seasonally adjusted annual rate of 750,000, which was 2.3% (±10.2%)* above the revised July estimate of 733,000; starts for July had been reported at 746,000, so the initial estimates for the two months were pretty close; however, August housing starts were 29.1 percent (±12.8%) above the August 2011 rate of 581,000, so we’re clearly off the bottom, as you can see on bill mcbride’s chart, which shows overall starts in red, and single family starts in blue, going back to 1968…single-family housing starts in August were at a rate of 535,000; up 5.5% (±10.4%) from july, while the start rate for units in buildings with five units or more was 208,000...new building permits authorized in August were at a seasonally adjusted annual rate of 803,000, 1.0% (±1.2%) below the revised July rate of 811,000, but  still 24.5% (±1.7%) above annual rate of 645,000 permits last august…of August permits, 512,000 were for single family structures and 263,000 represented units in building of more than 5 units…housing completions in August were at a seasonally adjusted annual rate of 689,000, 0.7% (±18.8%) above the july rate and 11.7% (±17.5%) above annual rate of 617,000 last august…this report also gives housing starts, permits, under construction & completion data by region in the tables pages 2 to 6 of the pdf, but since the 90% confidence intervals on them run between ± 25% and ± 50%, they’re really only a curiosity…

on the same day as census released the new home data, the NAR (National Association of Realtors) reported on August Existing-Home Sales and Prices; according to the NAR, total existing-home sales, which includes completed sales of single-family homes, condos, et al, rose 7.8% to a seasonally adjusted annual rate of 4.82 million in  August from 4.47 million in July; this total was also 9.3% above the 4.41 million annual sales rate of last august and the highest rate of home sales since the early 2010 spike in sales caused by the homebuyer tax creditthe median sales price for all home types sold in August was $187,400 in August, a 9.5% increase over last August’s sales prices, and the 6th month in a row that the NAR showed year over year median price increases, the first time they’ve shown a string of six price increases since May 2006; as we’ve pointed out, average & median sales prices have been increasing in part due to the large inventory of foreclosed homes being kept off the market; distressed homes, which includes foreclosures and short sales sold at a discount, accounted for 22% of August sales, compared to the 31% of sales they accounted for in August 2011; foreclosed homes, which were only 12% of the total, sold for an average of 19% less than others on the market, while short sales were discounted 13%…there were 2.47 million previously owned homes listed for sale in August, which was 18.2% less homes on the market a year earlier; at the current sales rate this represents 6.1 months of supply…the median time on market for homes sold in August was 70 days, down 23.9% from the 92 day median a year earlieer; 32% of homes sold in August were on the market for less than a month, while 19% were on the market for six months or longer (a separate report from Realtor.com:puts the August inventory at.1.84 million units in August, down -18.68% from their year earlier report) ..according to Freddie Mac, the average rate on a 30-year fixed-rate mortgage in August was a near record low 3.60%, up from the 4.27% average rate of a year earlier; thus, the monthly commitment for such a home buyer would have been 8.5% less than a year earlier…but even with lower outlays, first time home buyers accounted for 31% of home sales in August, down from 34% in July and 32% a year earlier, while cash buyers bought 27% of those homes sold in both August & July, less than their 29% year ago clip…NAR labels most of those buying with cash as investors, and says they counted for 18% of all purchases, up from 16% in July but down from 22% in August of last year…regionally, sales in the northeast rose at a rate of 8.6% and sold at a median price of $245,200, barely up from a year ago; sales in the South rose at an annual pace of 7.3%, with a median sales price of 160,100, 6.5% hgiher than last year, while existing-home sales in the Midwest increased 7.7% to a level of 1.12 million, while the  median price in the Midwest was $152,400, up 7.8% from August 2011…and in the West, sales increased 8.3% to an annual level of 1.17 million in August but were unchanged from a year ago….the median price in the West was $242,000, which is 16.3% higher than last year, largely due to a shortage of homes being offered for sale..

there was another major quarterly release this week, the Second Quarter 2012 Flow of Funds from the Fed (134 pp pdf), a report heavy on statistics and tables covering financial & non-financial sectors, credit markets and borrowing by type of financial instrument, but it’s mostly watched for and reported on for data on household balance sheets…according to the Fed, household net worth was at $62.7 trillion at the end of the second quarter, down $300 billion from the net worth of $63.0 trillion at the end of the first quarter; mostly due to a $600 billion decline in the value of stocks & mutual funds owned by households, which was partially offset by an increase of $355 billion in the value of household real estate (the CoreLogic HPI is used by the Fed for home values here)…household financial assets were valued at $51.9 trillion in the 2nd quarter, while tangible assets, such as homes, cars, & other durable equipment were worth $24.4 trillion; these were offset by liabilities of $9.6 of mortgage debt and $2.7 trillion in consumer credit…if there was a bright spot in this report it was that total household debt as a percentage of after tax income (DPI) fell to 113.2%, the lowest level since 2003…and with increasing home prices, household’s net equity in their real estate increased to 43.1%, the highest since the 2nd quarter of 2008….the adjacent bar graph from zero hedge shows how components of household’s balance sheets have changed since Q1 of 2004; with assets above the zero line and liabilities below; reading bar segments from the bottom up is easier if you click on the graph for a new window; consumer credit is chartreuse, mortgage debt is pink, real estate is blue, durable goods and other tangibles are red, deposits are green, corporate equities are violet, mutual funds are teal, pension funds are orange, and all other assets are light blue…note that household net worth, the black line transversing the bars, is not adjusted for inflation, so in real, inflation adjusted terms our household’s net worth still remains 16.4% below the Q1 of 2007 peak

State Unemployment echoing the August unemployment report from a few weeks back, the BLS released the Regional and State Employment and Unemployment Summary for August this week; despite the fact that the national unemployment rate fell, the jobless rate increased in 26 of the states during the month, was unchanged in 12, with the 12 other states and DC showing declines in the unemployment rate…Nevada continued with the highest unemployment rate in August, at 12.1%, with Rhode Island and California being the only other states with double digit rates, 10.7 and 10.6 percent, respectively…and North Dakota was again the state with the lowest jobless rate, at 3.0%…the biggest jump in joblessness was in Connecticut, where the rate rose from 8.5% to 9.0%, followed by Michigan, where unemployment was again rising, from 9.0% to 9.4%the adjacent chart from bill mcbride has each state represented by a vertical bar, arranged from the current worst jobless rates on the left, shown in red, declining to lower unemployment states moving right; the blue extension on each bar indicates the recession unemployment high for each state (thus, new york and new jersey are now at their highest jobless rate yet)….the WSJ also has an interactive graphic whereby you can graph the unemployment rate changes in up to 5 states at a time since the beginning of the recession… reflecting returns from the establishment survey portion of the monthly report, BLS reports payroll employment increased in 28 states, decreased in 21 states and the District of Columbia, and was unchanged in Colorado…the largest month over month increase in employment occurred in Texas, which gained 38,000 jobs, followed by Florida (+23,200) and Missouri (+17,900), while the largest monthly decreases in August employment were in Virginia, which lost 12,400 jobs, the District of Columbia, which reported 11,200 less jobs and Washington, which showed 8,800 fewer jobs than in July

  on the heels of last week’s census report on incomes, poverty and health insurance, the census broke out that same data into state by state information in a supplemental report called the 2011 American Community Survey; it showed median household income ranged from a low of $36,919 in Mississippi to a high of $70,004 in Maryland, and that between 2010 and 2011, inflation-adjusted median household income either fell or stayed the same in every state except Vermont, which major declines shown by Nevada, whose state median income fell 6%, California ( down 3.8 percent), Georgia (-3.5 percent), and Hawaii (-5.2 percent)twenty states saw a significant increases in income inequality as measured by the Gini index: Arkansas, California, Florida, Georgia, Illinois, Louisiana, Maine, Michigan, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Tennessee, Texas, West Virginia, and Wisconsin, while income inequality did not decrease in any states nationwide…the chart included here is of the percentage in poverty by state, prepared from the data in this survey by the Economic Policy Institute…poverty rates range from a high of 22.6% in Mississippi at the far left, to a low of 8.6% in New Hampshire on the right…the largest increases in poverty between 2010 and 2011 occurred in Louisiana (+1.7%), Oregon (+1.6%), and Arizona (+1.5%), while Vermont was the only state where the poverty rate declined.

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

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