While I touched on unemployment duration at the end of my last blog, this is a very important subject and deserves a bit more elaboration. Quite simply being out of work for three or four weeks is a very different experience with very different economic implications than being out of work for six months to a year or more. The focus on the total number of unemployed obscures that reality. The thing that makes this recession so much different than the ones that have gone before it is how long people are staying out of work once they become unemployed. Yeah if you get laid off for a few weeks, it can be a pain in the butt, but essentially it is just an unplanned vacation. It does not really affect your long term financial solvency, nor do your job skills diminish significantly. After six months, regular state unemployment ...

Last week we received positive readings for some key economic indicators. But I still see plenty to worry about.

Source: FRED

On Tuesday the Census Bureau announced that U.S. retail and food services sales in August were 2.7% higher than in July on a seasonally adjusted basis. True, 2/3 of the additional $9 billion in spending was attributed to motor vehicles and parts, and September car sales could be much worse than August. Another 1/6 of the new spending came from gasoline stations, and the higher average gasoline prices in August are hardly cause for celebration. But even excluding autos and gasoline, core retail sales were up 0.6% in August. Here's the summary from Stephen Stanley of RBS:

after a string of contractions, these data suggest that consumer demand is, at a minimum, stabilizing. Core retail sales may even

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Date Status Sep 13, 2006 Feb 21, 2007 Apr 25, 2007 Jun 27, 2007 Oct 5, 2007...

According to the Census Bureau, total construction spending edged up to a seasonally adjusted annual rate of 965.7 billion in June -- a 0.3% increase from May, but down 10.3% from a year ago. However, private construction spending fell 0.1% for the month. Public spending, mostly for schools and roads (via the Stimulus Bill) rose by 1.0% to an annual rate of $321.7 billion, and was the primary reason that total construction spending was up. Within private spending, a rise of 0.5% on residential spending was more than offset by a 0.5% decline in non-residential construction spending. As the first graph below (both graphs are from http://www.calculatedriskblog.com/) shows, non-residential construction spending is now substantially larger ($397.9 billion annual rate) than is residential construction ($246.1 billion annual rate). This has not been the case historically and reflects the massive decline in the housing market over the last few years....

For Immediate Release

Chicago, IL – July 27, 2009 – Zacks Equity Research highlights Onyx (ONXX) as the Bull of the Day and Starwood Hotels and Resorts Worldwide (HOT) the Bear of the Day. In addition, Zacks Equity Research provides analysis on D.R. Horton (DHI), Lennar (LEN) and Beazer (BZH).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

We maintain our Buy rating on Onyx (ONXX) shares with price target of $45.

Onyx delivered strong financial performance in 1Q09 and we expect the company will continue to deliver very good financials for 2009. Nexavar sales continued to grow in 1Q08, which was mainly attributed to the market penetration in liver cancer while market share has stabilized in kidney cancer market in spite of heavy competition. Total Nexavar

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In today's Economix post, Casey Mulligan argues that the greater than predicted unemployment numbers should not be ascribed to the negative effect of the stimulus, but rather to bigger than anticipated negative shocks.

We cannot blame the Obama administration for failing to predict June's 9.5 percent unemployment rate. That result just shows the size of the shocks hitting the economy: Even the best forecasters can miss the unemployment rate by almost two percentage points, even when forecasting fewer than six months ahead.

That makes sense, and is in line with my previous post. But he then argues that since we’ve seen little stimulus effect so far, we should cancel the stimulus, since it'd be costly on a per-job basis (and in any case, he believes the effect on GDP to be small [1]). These are interesting assertions meriting further analysis.

Stock-Flow Mismatch

We're all free to use whatever multipliers we

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The Census Bureau reported that new homes sales fell in May to a seasonally adjusted annual rate of 342,000, a 0.6% decline from Aprils 344,00) rate. However, the April number was revised down from an initial read of 352,000.The May rate was a fairly significant disappointment relative to expectations of a 360,000 annual rate. On a year-over-year basis, sales are down 32.8%.There was some good news in the report. For starters, all of the weakness was concentrated in one region, namely the South, where sales were off 8.5% for the month, and 35.9% versus May 2008. The South is by far the biggest and most important of the four census regions when it comes to housing. Even with the decline, it represented 53.8% of all new home sales.That amounts to a sharp decline from the 58.4% share in April. This is because the ...

I'm still looking for, and still not seeing, the economic recovery that everybody is talking about.

Source: FRED.

One bit of good news this week was the Census Bureau report that nominal seasonally adjusted U.S. retail and food services sales rose 0.5% in May. But of the $1.57 billion increase in total spending, almost $1 billion of it came from extra spending at gasoline stations. An optimist might read that as an indication that consumers are now prepared to spend more, and just happened to devote most of that extra spending to gas. A pessimist might worry that it portends further cuts in spending on other items ahead. But then, pessimists always find something to worry about, don't they?

National average U.S. gasoline retail price. Source: NewJerseyGasPrices.com.

Or perhaps we can take some

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The broad sweep in housing-gold ratios is just as broad and as sweeping as both gold bulls and bears might hope…

Even the UK’s small, tightly packed mainland, floating off the edge of Europe, includes disparate and distinct real-estate markets. Glasgow is as different from London as Cornwall from Cheshire. But in the main (and the mania), and with a peak of 185,000 new dwellings under construction in 2006, the broad sweep of house-price inflation…followed by an inevitable slump lasting six years or so…tends to apply across the nation.

In the United States, in contrast, new housing starts at the peak of what pundits, economists and investment bankers clearly felt was a coast-to-coast boom in 2006 approached 1.63 million amid a total housing market of 128 million units spread across 3.5 million square miles.

By necessity, that makes the idea of an “average” home price more slippery. But let’s not let such quibbles

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Cautious optimism was at play yesterday as equity markets closed the day with modest gains.  Economic posts failed to cheer sentiments as the numbers couldn't suggest if an economic recovery is in sight.  However, financials recorded gains even as investors remained jittery over the May 4 release of government stress test results. The DJIA closed up 70 points for a 0.9% rise. The S&P held above 850, for a 1% gain and the tech-heavy NASDAQ edged up 0.4% on mixed earnings news from the tech sector. On the NYSE, a moderate 1.6 billion shares exchanged hands with advancing shares outrunning declining issues 9 to 2. Crude prices gained $0.77 to $49.62 after the OPEC Secretary General noted its members' 80% compliance of production cuts. Gold prices rose 1.6% on news of China's continued build-up of reserves.

Financials were the leading gainers yesterday, with a 3.6% advance, ahead of today's

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