Check out the latest from the respected Economists of the National Association of Home Builders.
Expect Bumps On the Road to Recovery
While people have been getting a little giddy over the recent, more upbeat news about the economy, a little realism is in order. The economy and, in particular, housing have been severely beaten down.
And while even less economic pain is desirable, this measure of improvement should not be confused with a return to normality. The road to recovery will be long and hard. (more)
Employment Is Still Falling
The July employment report, and the elation over losing “only†247,000 jobs nationally (at a seasonally adjusted annual rate), is a case in point. Yes, it was the smallest monthly job loss in almost a year and roughly a third of the jobs lost in January, the worst monthly job loss during the current recession. But jobs were lost in July.
So far this year, 3.6 million jobs have disappeared and 5.7 million jobs were lost from July 2008 to July 2009. (more)
Productivity Is Up, But at What Cost?
Second quarter productivity jumped 6.3% at a seasonally adjusted annual rate — up from first quarter’s meager 0.2% advance. This is a good news/bad news report.
Gains in productivity are always desirable and, in the long run, they help advance our standard of living. However, this advance arrived on the back of falling employment. In essence, it came about because employed workers are working harder. (more)
Consumers Are Skeptical About the Recovery
Households remain skeptical about the outlook for the economy, and certainly, the bleak job market is a major contributor. (more)
Housing Is On the Mend
The news from residential construction has been positive during the last few months. Although housing starts have been volatile — up one month and down the next — single-family housing starts have advanced steadily for the last five months. (more)
But Caution on Housing’s Outlook Is in Order
July’s total housing starts of 581,000 at a seasonally adjusted annual rate represent less than a third of the nation’s long-run need for new housing units driven by underlying demographics. (We estimate that number to be about 1.85 million starts per year.) (more)
And There Are Still Challenges Ahead
There will be challenges ahead for the economy as consumers slowly return and the inventory of vacant homes is absorbed. The potential pitfalls are many. A double-dip recession remains a small but conceivable possibility.
Let us rejoice in the good economic news. But don’t not lose sight that the journey to a full recovery is a long one. (more)