Thursday, August 27, 2009

U.S.: Unemployment’s Rate is the Achilles Heel by Angelo Airaghi [Guest Analyst

U.S.: Unemployment's Rate is the Achilles Heel
by Angelo Airaghi [Guest Analyst]

As housing is giving some relief to household pockets, the Federal Reserve warns about a slow recovery. The Euro, in the mean time, is testing key resistance levels against the U.S. dollar. 

U.S.: housing still supportive

Tangible signs of improvements are beginning to show up, albeit the recovery remains fragile in the United States. In July, the conference board index increased 0.6% month-on-month from + 0..8% in June. It was the fourth consecutive month of increase, giving further prove that the U.S. economy might have bottomed. In a speech at the Jackson Hole Symposium, Fed Chairman Bernanke confirmed that the worst might be over for global economies, thus indirectly anticipating a safe-haven demand's decline for U.S. dollars and Treasuries in the coming months. Nonetheless, the Federal Reserve will keep rates low for the first part of 2010 with inflation so mild. In July, the producer price index (PPI) fell 0.9% versus the expected -0.4%. In reality, after two months of gains, 6.5% in June and 15% in May, housing starts slid by 1.0% in July to 581,000 annualized (+2.5% expected). Nevertheless, singles component (three-quarters of the market) rose 1.7%, while multiple houses declined 13.3%. Starts are still above the average of the first three months of the year, although away from the over 2 million produced in 2005.

Existing home sales increased at the contrary by 7.2% (+2.0% expected) to 5.24 million in July from 4.89 million in June. Inventories remained unchanged at 9.4 months of supply. However, both single homes and condos improved. The first climbed by 6.5% and the second by 12.5%. Clearly, the first-time homebuyers tax credit program, which allows first time buyers to receive a refundable credit of USD 8.000.-. (10% of the home value, if lower) until December 1st, have helped home sales. Nonetheless, the positive domino's effect created by the activity in the housing sectors could continue in the future as well supported by low interest rates and affordable prices. Home ownership remains an American dream. Consequently, a bipartisan group of U.S. senators are requesting that the tax credit program to be renewed for an extensive period of time......

Other articles at website ~ PSL
Education for Liberation! Venceremos Unidos!
Peter S. Lopez {aka:Peta}
Sacramento, California,Aztlan
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