Bizarro world where housing is economy bright spot
Sales growth of new builds
Compared to year-ago levels, sales of new homes are booming, reaching a two-year high in May. Sales are still well some 75% below prerecession peaks, but there's an undeniable improvement going on. An exchange-traded fund of U.S. home builders (ITB) is up 41% this year.
Growth in contract signings of homes
Pending home sales -- which means, contracts to buy existing homes -- also were at two-year peaks in May. Record-low mortgage rates, stabilized home prices, and improved if not great hiring has helped lead to improvement in housing activity, which is still about a third below peak.
U.S. house prices
House prices in the U.S. appear to be stabilizing. Case-Shiller became the last of the major indexes to show a monthly improvement, though it's still showing year-on-year declines as the chart above shows. A real estate trade group says low inventories may lead to price growth later, though other analysts fear about the impact of so-called shadow inventory of foreclosed and near-foreclosed property that haven't hit the market.
The 'jobs plentiful' gauge
Consumer confidence is ebbing, and a major reason is the lack of confidence in the jobs market. The figure in red measures the difference in the percentage of respondents to a Conference Board survey who say jobs are plentiful from those who say they are not plentiful. That number hasn't been positive since March 2001 and was -44.1% in June -- and the figure points to a likely slow pace of jobs growth in June. The jobs data is due this Friday.
Profits drop for first time in four years
Though not by much, corporate profits dropped in the March-ending quarter, the first decline in four years. The drop came as profits from overseas dropped sharply -- and with the trouble in Europe and the turbulence in China, foreign profits may well have dropped even more in the second quarter.
Though very volatile, world trade volumes and industrial production dropped on a monthly basis in April, an indicator of the tough times seen across the globe. Again, Europe and Asia are to blame, though U.S. trade also declined on the month.