Financial FAQ Materials

US housing starts dive in April

Posted on Sunday, 15th May 2011 by Emily Smith

The Commerce Department has today revealed US housing starts slumped in April – much worse than forecast.

Housing starts dived 10.6% in the month to a seasonally adjusted annual rate of 523,000 units, analysts had expected an annual rate of 563,000.

In the meantime, applications for building permits, a barometer of future home construction, also fell, by 4%, to annual rate of 551,000 units.

Demand for houses in the US continues to be weak with potential buyers struggling to obtain mortgages.

Furthermore, the housing market is weak due to a glut of unsold and repossessed properties.

Today’s data further highlights the fragility of the housing market with many suggesting it is holding back the recovery of the world’s largest economy.

Meanwhile, the news sent oil prices sliding with Brent crude down $2.10 to $108.75 after rising above $111 earlier today.

Tags: April, Housing Starts, Housing Starts Dive, Starts Dive
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Deciphering the Economic Schizophrenia: What Do the Mixed Signals Mean?

Posted on Sunday, 15th May 2011 by Vanessa Miller

A seemingly contradictory line up of recent economic indicators has been drawing a lot of attention as of late, leaving in its wake a population of economists and economic analysts who have suddenly been struck dumbfounded. They are, after all, dealing with an economy that just refuses to stick to their models and predictions.

Here is a run-down of some of the more “perplexing” measures of the past month:

The US Bureau of Labor Statistics released its April Employment Situation Report in which it indicated that non-farm payroll employment rose by 244,000 in April . According to the BLS these job gains occurred in several service sector industries, as well as manufacturing, and mining. But t

Two interesting inflation charts

Posted on Thursday, 12th May 2011 by Emily Smith

THE Bureau of Labour Statistics has released its latest inflation figures, providing us with an opportunity to reflect on where the American macroeconomy is heading. The producer price and consumer price releases showed similar trends. Both core and headline inflation ticked up, but the core increase was much more subdued. Core producer prices rose 2.1% in the 12 months to April, up from 2.0% in March. Core consumer prices rose 1.3% in the 12 months to April, up from 1.2% in March.

Both core CPI and core PCE (the Fed’s preferred measure of inflation, taken from the GDP release) are signaling a healthy increase in inflation that remains within the Fed’s comfort zone. (The annualised rate of inflation over the past three months is probably a little hot for the Fed’s taste, but it also believes that as commodity prices level off upward pressure on prices will ease.) A dose of inflation is a good thing for an economy at this point in the business cycle. Have a look at the path of the real interest rate, as calculated by the Cleveland Fed:

It’s negative!

The Most Expensive Homes in America

Posted on Tuesday, 10th May 2011 by Emily Smith

House Hunters has nothing on these homes. With cable television being a purveyor of home shopping as a means of entertainment, it seems everyone is wanting not only to keep up with the Jones’, but to also take a sneak peek at their closet space or bathroom updates.

The most entertaining house hunting shows feature homes that walked right off the set of Life Styles of the Rich and Famous with Robin Leach to House Hunters production. But these homes, even at the biggest and best, pale in comparison with the real big boys on the block of the dream home market.

You want to take a peek? Well, that is not likely. The

Is housing holding back recovery?

Posted on Saturday, 7th May 2011 by Emily Smith

THIS morning, several news outlets are reporting on new home price data from Zillow which shows that prices fell 3%, quarter-on-quarter, in the first three months of the year. That’s in line with Case-Shiller data and not particularly surprising. Interestingly, it seems as though Fannie and Freddie are unloading a lot of foreclosed properties, a development which is holding down prices. Obviously, this effect is concentrated in markets with lots and lots of foreclosures—largely those in the West, Florida, and other hotspots like Atlanta and Detroit.

Kevin Drum reads the news and writes:

Most analysts now expect that the housing market won’t bottom out until sometime next year. Until that happens, it’s unlikely that that the sluggish economic recovery we’re seeing right now will improve much.

I wish he’d explain that a little. What’s the mechanism he has in mind? For new housing consumers—renters and buyers—falling prices are a good thing; they boost disposable income. Falli

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How to Hire an Employee

Posted on Saturday, 7th May 2011 by Vanessa Miller

How to hire an employee. I’ve spoken a lot about hiring employees here on erica.biz, and why it’s so important to start hiring early, especially if you are just starting out and you don’t have a lot of free time to pursue your business. But many people I speak to don’t know how to hire an employee.

With this post, I’ll take hiring an employee step-by-step and show you exactly how I hired someone to help me out at home.

The situation: Brian, my current boyfriend, moved in with me about 7 weeks ago. He’s a freelance graphic designer who builds custom WordPress websites. He works part-time on Whoosh Traffic and takes other client contracts part-time.

He also loves to cook, and we now eat most meals at home. Neither of us enjoy cleaning, and between our businesses, we barely have time to work on the house. If you’ve been reading erica.biz for a while, you know I’m a big fan of hiring out for housekeeping, yard maintenance, etc. We already have

Tags: Employee
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