By:
Lissette Saca
July 22, 2011 6:00pm
From unemployment to housing price levels and government policy debates, this week has been a very interesting one. Here is a quick look at the numbers and headlines that made news this past week.
Employment: Despite an overall decreasing trend in unemployment levels, yesterday’s
Jobless Claims Report stated that the number of individuals who filed for unemployment for the week of July 16th increased to 418,000 from a previous 405,000 from the week before. When looking at levels of unemployment, it is always important to look at the big picture (or what is commonly known as the long-run). Because unemployment levels can vary significantly from week to week, there exists a much more accurate depiction of the “actual” level called the 4-week moving average. This average provides a number which accounts for volatility in the weekly unemployment levels which may have been caused by external factors such as significant layoffs from one single company. Therefore, despite the increase in this week’s unemployment levels, long-run levels of unemployment show that the number of jobless claims filed has, in fact, decreased from 423,250 to 421,250 within the last four weeks. Having said that, what does this week’s number mean? Well…. It means that more individuals filed for unemployment this week when compared to last week. However, looking at the 4-week moving average, the overall level of unemployment decreased and there is an overall declining trend in the number of filed jobless claims. Things are looking up in this economic indicator overall!
Housing: Housing continues to be the slowest of all the economic indicators to recover. Existing home sales continued to decrease, even below consensus levels, for the month of June. Nevertheless, there is some good news. Home price levels released by the
Federal Housing Finance Agency for the month of May showed a slight increase in the average price of homes on the market; a welcome change from previous weeks. What does it all mean? In analyzing the numbers and their overall trends, the housing sector is still in a lag. Homes are now increasing in value; however, they are not selling. This can be a problem for anyone who is in the home buying market. The increasing price of homes may be a leading reason why home sales are in decline. And with the increasing volatility of the recent unemployment levels, many can no longer afford to purchase their dream home.
Government Policy Debate: “Raising the debt ceiling” and “debt ceiling default” have been a few of the most talked about topics and phrases this past week. Heated talks and exchanges have occurred in Washington D.C. as the August 2nd deadline for the government to increase the nation’s debt ceiling to avoid defaulting on its debt approaches. The crucial question: Can a debt compromise be reached? Many states don’t seem to think so and are bracing for a debt ceiling default, despite the fact that government officials have not reached an agreement on whether to raise the debt ceiling (or because they have not done so). Many states have begun to take out loans to ensure that they have enough to cover their requirements. Contingency plans are being put in place by various states so that they can get their slice of the pie (which comes in the form of money that the federal government pays individual states for services such as education, Medicaid, transportation and others). However, if there is no agreement reached and the debt ceiling is not raised, that money may never come. Regardless of individual positions on the subject, or of the arguments that are taking place, we will have our answer on August 2nd. So let’s brace for impact!
And that’s your week in review!