News and Information from Strategic Real Estate Opportunities

Personal income in October 2009 increased 0.2% from September.  Real personal consumption expenditures (PCE) rose 0.4% and nominal PCE increased 0.7%.  Real disposable personal income (DPI) rose 0.2% and nominal DPI increased 0.4%.  The personal saving rate as a percentage of DPI was 4.4% in October.

New orders for manufactured durable goods in October 2009 decreased 0.6%, to $166.2 billion.  Excluding transportation, new orders fell 1.3%, to $124.9 billion.  Overall shipments decreased 0.2%, while non-defense capital goods shipments declined 1.6%.  Inventories were virtually unchanged from September.

Real gross domestic product (GDP) increased at an annual rate of 2.8% in the third quarter of 2009, according to today’s second estimate.  This follows a decrease of 0.7% in the second quarter.

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent in October, the U.S. Bureau of Labor Statistics reported today. The index has decreased 0.2 percent over the last 12 months on a not seasonally adjusted basis.

The seasonally adjusted all items increase largely reflected advances in the indexes for energy and for new and used motor vehicles. The energy index rose for the fifth time in the last six months, advancing 1.5 percent as the indexes for gasoline, fuel oil, natural gas, and electricity all increased. The index for all items less food and energy rose 0.2 percent in October, the same increase as in September. The indexes for used cars and trucks and for new vehicles both rose sharply and together they accounted for over 90 percent of the increase in the index for all items less food and energy. The indexes for airline fares and medical care also increased, while the shelter index was unchanged and the indexes for apparel and recreation declined.

The food index also increased in October, rising 0.1 percent after declining in two of the previous three months. The index for food away from home increased slightly, while the food at home index was unchanged. Within the food at home group, the index for dairy and related products rose significantly, while the fruits and vegetables index declined for the fourth straight month.

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential
construction statistics for October 2009:

BUILDING PERMITS

Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 552,000.This is 4.0 percent (±1.9%) below the revised September rate of 575,000 and is 24.3 percent (±1.9%) below the October 2008 estimate of 729,000.

Single-family authorizations in October were at a rate of 451,000; this is 0.2 percent (±1.0%)* below the revised September figure of 452,000. Authorizations of units in buildings with five units or more were at a rate of 85,000 in October.

HOUSING STARTS

Privately-owned housing starts in October were at a seasonally adjusted annual rate of 529,000. This is 10.6 percent (±8.7%) below the revised September estimate of 592,000 and is 30.7 percent (±8.3%) below the October 2008 rate of 763,000.

Single-family housing starts in October were at a rate of 476,000; this is 6.8 percent (±7.5%)* below the revised September figure of 511,000. The October rate for units in buildings with five units or more was 48,000.

HOUSING COMPLETIONS

Privately-owned housing completions in October were at a seasonally adjusted annual rate of 740,000. This is 1.9 percent (±12.4%)above the revised September estimate of 726,000, but is 29.9 percent (±9.7%) below the October 2008 rate of 1,055,000.

Single-family housing completions in October were at a rate of 528,000; this is 10.7 percent (±14.5%)* above the revised September
figure of 477,000. The October rate for units in buildings with five units or more was 200,000.

Real average hourly earnings fell 0.1 percent from September to October, seasonally adjusted, the U.S.Bureau of Labor Statistics reported today. A 0.3 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) slightly offset a 0.3 percent increase in average hourly earnings for production and nonsupervisory workers.

Real average weekly earnings fell 0.1 percent over the month, as a result of a decline in real average hourly earnings and an unchanged average work week. Since reaching a recent high point in December 2008, real average weekly earnings have fallen by 1.9 percent.

The Commerce Department reported that  retail sales rose 1.4 percent in October, reflecting a rebound in auto sales. Excluding auto sales, retail demand rose 0.2 percent, half of the expected 0.4 percent rise. However, Sales fell at many other retail stores as consumer spending remains under pressure, raising questions about the durability of the recovery.

September retail sales were revised downward to show a 2.3 percent decline, from the 1.5 percent drop initially reported.

Employers initiated 1,776 mass layoff events in the third quarter of 2009 that resulted in the separation of 277,924 workers from their jobs for at least 31 days, according to preliminary figures released by the U.S. Bureau of Labor Statistics. The number of extended mass layoff events reached a record high for any third quarter since 1985 when data became available.

Third quarter program highs in the number of events were also recorded in half of the 18 major industry sectors, 2 of the 4 geographic regions, 4 of the 9 divisions, and 15 states.

Separations due to business demand reasons increased by 27 percent from the same period a year ago.

Thirty-three percent of employers reporting an extended mass layoff event in the third quarter of 2009 indicated they anticipated some type of recall, up slightly from 29 percent a year earlier. Third quarter 2009 layoff data are preliminary and are subject to revision.

The national unemployment rate averaged 9.6 percent, not seasonally adjusted, in the third quarter of 2009, up from 6.0 percent a year earlier. Private nonfarm payroll employment, not seasonally adjusted, decreased by 5 percent (-5,765,000) over the year.

The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm payroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.

In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points. Among the major worker groups, the unemployment rates for adult men (10.7 percent) and whites (9.5 percent) rose in October. The jobless rates for adult women (8.1 percent), teenagers (27.6 percent), blacks (15.7 percent), and Hispanics (13.1 percent) were little changed over the month. The unemployment rate for Asians was 7.5 percent, not seasonally adjusted. (more…)

Wholesale inventories in September 2009 declined 0.9% from August and decreased 15.0% from September 2008, to $377.7 billion.  Sales increased 0.7% from the prior month but declined 15.2% from the prior year, to $320.2 billion.