News Roundup

This morning’s news is really not news at all. It is all merely confirmation of what we already know: things are rotten.

First here’s the press release on claims for unemployment insurance:News Release This data shows that the jobless claims are now at an historic high. Unemployment lines are growing, and after the massive layoffs announced this past Monday, they will undoubtedly continue to grow. Unemployment is typically a lagging indicator. That is the job situation gets worse after the economy has already turned down and then improves well after the growth has picked up. This is because employers hesitate to lay workers off until they have strong evidence that the downturn will last a while and, conversely, they only re-hire when the pick up in growth looks sustainable.

Second, the housing industry is still falling deeper into recession. The data released this morning was for new home construction and showed a uniformly weak picture. Here’s the statistics from MarketWatch.com: New Home Sales Fall to Record Low. New home sales fell all across the country during 2008 and hit a record low in December. This is another instance of the economy plumbing record lows. This data had been reported since 1963 and the figures for 2008 are the worst since then. Couple the bad new homes report with the existing home data reported earlier in the week and the overall picture remains very gloomy. Clearly the adjustment in housing still has some way to go, and even with record low mortgage rates there seems to be no evidence of a sustained recovery. The only bright spot was in the existing house data where there was an uptick of purchases, but that seems to have been driven by bargain hunters buying up foreclosed homes. That’s hardly a desirable or sustainable foundation for growth.

Still, neither of today’s reports was a surprise. For that we should be grateful.