Spot The Odd Vol Out
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Fewer Americans applied for initial jobless claims in the September 17 week though today's report is mixed. The week-to-week change, at minus 9,000, is a good indication but the 423,000 level is 3,000 higher than the Econoday consensus and reflects a 4,000 upward revision to the prior week to 432,000. Another negative is the fifth straight rise in the four-week average, though the latest gain is minimal to 421,000 vs a revised 420,500 in the prior week. Still, a look back to mid-August shows the four-week average at 403,500 in a comparison that points to trouble for the September employment report.
Continuing claims, in data for the September 10 week, fell 28,000 to 3.727 million with the four-week average down 7,000 to 3.742 million. The unemployment rate for insured workers, at 3.0 percent, is unchanged for the six straight week.
The Labor Department reports no special factors in either the current week or in the upward revision to the prior week when the East coast was cleaning up from Hurricane Irene. Markets, where risk-aversion is very heavy right now, aren't getting any lift from today's report.
The purchase index fell 4.7 percent in the September 16 week to end a brief run of improvement. On a four-week basis, the purchase index is down 1/2 percent in a reading that doesn't point to strength in underlying home sales. The refinance index rose 2.2 percent in the week with the four-week average down 3.9 percent. The average rate for 30-year fixed mortgages with conforming loan balances ($417,500 or less) is unchanged at 4.29 percent with jumbo loan balances ($417,500 or more) down two basis points to 4.55 percent.
A rough 10 years for the middle class
NEW YORK (CNNMoney) -- It's official. The first decade of the 21st century will go down in the history books as a step back for the American middle class.
Last week, the government made gloomy headlines when it released the latest census report showing the poverty rate rose to a 17-year high. A whopping 46.2 million people (or 15.1% of the U.S. population) live in poverty and 49.9 million live without health insurance.
But the data also gave the first glimpse of what happened to middle-class incomes in the first decade of the millennium. While the earnings of middle-income Americans have barely budged since the mid 1970s, the new data showed that from 2000 to 2010, they actually regressed.
For American households in the middle of the pay scale, income fell to $49,445 last year, when adjusted for inflation, a level not seen since 1996.
And over the 10-year period, their income is down 7%.
"Economists talk about the lost decade in Japan. Well, with these 2010 data, we can confirm the lost decade for the American middle class," said Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities.
The housing starts report for August was mixed as starts dipped while permits rose moderately. Housing starts declined 5.0 percent in August, following a 2.3 percent decrease in July. The August annualized pace of 0.571 million units posted lower than the median projection for 0.592 million units and is down 5.8 percent on a year-ago basis. The dip in August was led by a 13.5 percent fall in the multifamily component, following a 7.2 percent gain in July. The single-family component edged down 1.4 percent after a 5.8 percent decrease the month before.
By region, the fall in starts was led by a 29.1 percent plunge in the Northeast.
However, a rebound in permits suggests that some of the weakness in starts was weather related as Hurricane Irene likely weighed on new groundbreaking. In contrast, housing permits rebounded 3.2 percent, following a 2.6 percent contraction in July. Permit issuance is less affected by weather since they issued indoors. The August pace of 0.620 million units annualized printed above analysts' expectation for 0.590 million. Permits in August are up 7.8 percent on a year-ago basis.
On the news, equity futures edged down while rates were little changed.