Economic Trifecta: Rain Predicted For Tomorrow

Anyone hoping for backdated economic data relief today may have to turn to their local weatherman for good news.  There were dismal reports on new home sales, weekly jobless claims, and in durable goods.  When does a real recession show up in the official numbers?

New home sales for August were just announced, and they were bad.  There were only 460,000 new homes sold at an annualizedrate.  Economists expected about 510,000 sales.  July’s report showed 520,000 and June showed 500,000.  The onlyregion to gain from last month was the Midwest.

Durable Goods came in just as dismal for August.  While durable goodsare more volatile than bipolar patients off their meds, it is just more salt on the wound.  The Commerce Department reportedthat big ticket items fell 4.50% to a seasonallyadjusted $208.50 billion. Durables were also revised lower for Julydown to 0.8% instead of the previous estimate of 1.3%. Economists werelooking for a drop of roughly 2% for August. This is the worstdurable goods report since January 2008.

There was good news on the weekly jobless report measured by initialjobless claims.  Weekly claims jumped by 32,000 to 493,000.  Economists expected them to drop by 5,000.  Economic weakness wasprevalent and hurricanes were blamed for roughly 50,000 of theseclaims.  This marks the highest amount of claims since Sept. 29, 2001.  That was in the aftermath of the 9/11 terrorist attacks when companieswere making cuts in droves.

Thank God they keep telling us there is no recession and that theeconomy is fundamentally sound.  Stocks are rallying on more hopes of a bailoutpackage being reached.   But the economic numbers for the next month orso are not going to show any great improvement from August.

Jon C. Ogg
September 25, 2008