Focus on the Good News.
- Durable goods orders increase: The Commerce Department reported that orders for durable goods--manufactured products expected to last at least three years--increased 3.4% last month. This was the first advance in six months. Most of the increase came from orders for military aircraft and parts, machinery, computers, and fabricated metal products. (3/27/2009)
- New home sales rise: The Commerce Department reported that sales of new homes rose 4.7% in February from a month earlier. In combination with the equally unexpected increase in existing home sales, this means inventories are being drawn down and suggests that home sales are reaching a bottom. Watch for these developments: 1) prospective buyers, thinking the bottom has been reached, will come back into the market in droves; 2) prospective sellers, thinking the bottom has been reached, will remove their homes from the market waiting for prices to increase. With few new homes being built, we could move quickly into a high-demand low-supply situation, in other words a seller's market, precipitating rapidly rising home prices. This would intensify if homebuilders can't get loans from banks and begin adding to the supply of new homes. (3/26/2009)
- Existing home sales rise: The National Association of Realtors reported that existing home sales were 5.1% higher in February than in January, thanks in great part to distressed sales (foreclosures and short sales). Still, the increase was a surprise and good news. It means that existing house inventories are being drawn down, which is necessary for the market to bottom. In the meantime, savvy buyers are getting sweet deals. (3/23/2009)
- Suddenly, banks are in the black: Citigroup CEO sparked a stock market rally when he announced that the company had made a profit in the first two months of the year, its first in 15 months if it holds up. A day later, JP Morgan Chase reiterated that it had made a profit in the first two months of the year. Wells Fargo has said its results for the two months were strong. (Colorado Springs Gazette, 3/12/2009.)
- Jobs are being created: While the recession has claimed 4.4 million jobs, it has created 2 million others, according to government data. While this is a net loss, it's important to remember that jobs are created, even in an economic downturn. At his point, most of the new jobs are in education, health care, and government. However, there are new openings in private industry, especially for highly skilled workers. Engineers and the like. (AP via Colorado Springs Gazette, 3/10/2009)
All we hear about is the Jobs lost.