SkyIG

SKY News Summary 03-11-10

Most of the market has been focused on troubles in the housing market and the resultant effects on the economy. A report from RealtyTrac out today shows the number of foreclosures slowing to 6% year-over-year, the smallest annual rise in four years. If we have gotten a handle on residential lending problems, will commercial lending problems be the next drain on the economy? An answer may be found in a report released by The Census Bureau on March 1, entitled, “Value of Construction Put in Place.” While the report provides data on construction, not on lending, it shows the federal, state and local share of construction (especially highways, up 17.7% yoy) growing, while the private share of construction is shrinking (down 14.3% yoy). The shift in construction spending will mean more government spending, but may not mean a tightening of bank credit and defaults to the extent we experienced when the troubled housing market led us into the recession.
http://www.census.gov/const/C30/release.xls
http://www.realtytrac.com/contentmanagement/pressrelease.aspx?channelid=9&itemid=8695

The Treasury’s deficit report for the month of February shows a $61.8 billion increase in the current fiscal year-to-date deficit to $220.9 billion, from last year’s February year-to-date deficit of $589.8 billion. The increase is mainly due to TARP outlays shown under Treasury Department outlays.
http://www.fms.treas.gov/mts/mts0210.pdf

ICSC- Goldman Sachs reported strong chain store sales for the week ending March 6. In fact, this was “the strongest year-over-year gain in the ICSC-Goldman Sachs (ICSC-GS) chain store sales index, for the week ending March 6, since July 14, 2007 when it also posted a similarly large gain.” Consumers may be using credit to pay for their purchases as a report from the Federal Reserve shows consumer installment credit rising by $ 5 billion in January.
http://www.icsc.org/homepage/research_article.php?id=115
http://federalreserve.gov/releases/g19/Current/

The Mortgage Bankers Association’s Purchase Index increased 5.7 percent from one week earlier in a positive sign for the housing industry. More increases may come with the approach of April’s stimulus expiration date.
http://www.mbaa.org/NewsandMedia/PressCenter/72129.htm

The Department of Labors’ weekly initial unemployment claims report for the week ending March 6, showed very little change from the week before. While weather has wreaked havoc on most of February’s data, this current data should be accurate. The advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week’s revised average of 470,500.
http://www.dol.gov/opa/media/press/eta/ui/current.htm

Sources: MBAA, Census, ReatyTrac, ISCS, Federal Reserve, and Treasury websites.