Pelosi on Deal, “We’re Almost There”… House Speaker Nancy Pelosi said she and Treasury Secretary Mnuchin are close to a stimulus deal.
What it means – We’ve been back and forth on this seemingly forever. Just land the plane already! The White House has upped it’s offer to a reported $1.88 trillion, while Pelosi is closer to $2.2 trillion. They seem to be bickering over the cash gifts, er, grants, for cities and states. We don’t need the deal inked before the election, just agreed upon. But the conversation leaves out a key player, the Senate.
There are more than a few Senators who aren’t hip on a package of more than $500 billion to $900 billion, which leaves any plan between the White House and the House in limbo. The market is turning on every news report because investors recognize that we’re not out of the economic woods. Without another round of stimulus cash, individuals, businesses, real estate investors, and even government entities like cities and states will take big hits in the next few months. These groups will take hits eventually, but the longer we put it off, the higher the markets can go. Lacking a definitive agreement, the last week of October is starting by erasing all of the month’s gains.
Initial Jobless Claims Fall Below 800,000… Weekly initial jobless claims in state programs finally dipped below 800,000 again, falling to 787,000.
What it means— Overall continuing clams dropped by another million people, down from 24.2 million last week to 23.15 million. That’s great news, we just need 15 more weeks of decline like this to get the number back to a reasonable range. Problems with state unemployment agencies makes for more chaos than clarity.
The Bureau of Labor Statistics reported that workers are dropping out of the labor force, either because they don’t see any hope of getting a job soon or they have other responsibilities, like essentially home schooling their kids. There’s no way to know if the drop in continuing claims represents previously unemployed workers finding jobs or dropping out. Let’s hope it’s more of the former.
Housing Starts Up 1.9% in September… Single-family housing starts increased 8.5%, while multi-family housing starts dipped 15%.
What it means – We can’t get enough single-family homes to meet demand, even though home builders are plunking them out quickly. The same can’t be said for apartment buildings. Multi-family housing starts fell about 15% last month. That puts single-family housing starts up 22% over this time last year, and multi-family down 17%. The strongest building activity was in the Northeast, where housing starts shot up 67%. Housing has been a bright spot in the economy. Let’s hope it stays that way.
With mortgage forbearance and deferral programs still in effect, we haven’t seen the worst of what will likely happen in the residential housing market because of the lock down and knock-on economic affects. The reality is that 17.1 million U.S. households were behind on their monthly rental payment or their monthly mortgage payment as of Sept. 28th. That’s 13.5% of the 126.8 million households in the country.
Existing Home Sales Up 9.7% In September to Fastest Pace Since May 2006…The pace of existing home sales reached an annualized 6.54 million units last month, up 21% over this time last year.
What it means— The National Association of Realtors reported that the inventory of existing homes for sale fell to 2.7 months of supply, the lowest on record. That explains why 7 out of 10 homes on the market sold in less than one month. The rapid sales pace and dwindling supply drove prices higher, with the median sale price reaching $311,800, 15% higher than this time last year, and the largest increase since 2005. While we don’t have the other markers of a housing bubble, such as loose financing and drive-by appraisals, it sure feels like the real estate market is getting out of whack. This is especially noticeable in areas away from urban settings. “The West” is being rediscovered by city escapees. The movie, “Escape from New York,” has become too real.
New Sony PlayStation Will Record Player Audio Chats, Looking for “Harmful” Language…The next Sony PlayStation will come with a feature that nobody wants; the ability to record audio chats among players.
What it means— The company claims it wants to deter harmful talk, where players berate or otherwise make other players feel bad. The company can’t moderate every group chat, where players talk to each other on open mics. Instead, Sony will rely on players to report others, then Sony Safety will listen to the conversation in question to see if players spoke inappropriately to each other.
We used to have a way of dealing with this. We’d hang up on people when they were being offensive, and then not invite them back to a game. Apparently, now we need a corporate moderating board to help us. Isn’t that the problem we’re now trying to fix with large social media companies? If Nintendo, maker of the Switch game console, does the same thing, they could rename their device the Switch Snitch. Even Orwell would likely disbelieve society is adopting “Big Brother Watching” as an acceptable practice.
Data supplied by HS Dent Research
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What do you do, sir?” ~ John Maynard Keynes
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