Money & Company

Tracking the market and economic trends
that shape your finances.

Category: Economy

Real Estate | Autos | Consumer | Economy

New construction up sharply in November

New construction on homes and apartments increased sharply in November, a bright spot for the beleaguered U.S. real estate market
New construction on homes and apartments increased sharply in November, a bright spot for the beleaguered U.S. real estate market.

New housing starts last month rose 9.3% over a revised October estimate and were up 20.1% above November 2010. Homes and apartments were built at a rate last month that would produce 685,000 new units this year, when adjusted for seasonal variations, according to the Commerce Department.

The gains were largely driven by the volatile apartment sector, meaning the uptick could reverse itself. Single-family housing starts in November were up 2.3% over October, though down 1.5% over November 2010. Homes were built last month at a seasonally adjusted annual rate of 447,000 units.

"This was a good report," wrote economists Patrick Newport and Michelle Valverde of the consultancy IHS Global Insight. "The single-family market is finally getting off the mat and ... the multi-family segment is continuing to make small strides. ... [W]e should expect good housing start numbers in the upcoming months."

Starts were at their highest level in 19 months. Month over month, starts were up 22.6% in the West, 3.15 in the South and 53.8% in the Northeast. Starts were down 18.2% in the Midwest.

The number of building permits issued to builders also showed improvement, with new permits up 5.7% over October and 20.7% above the November 2010 rate. Permits were issued at a seasonally adjusted annual rate of 681,000 units.

"By historical standards, home-building activity is still very depressed, but at least it appears to be on an established upward trend,” Paul Diggle, property economist with Capital Economics, wrote in a note.

The new-home market this year has suffered worse than the one for previously owned homes as foreclosures continue to provide stiff competition for newly built properties.

New-home builders have turned to developing models for multi-generational families and touting their green credentials to distinguish themselves from foreclosure properties –- often competing against the very models they built during the boom years as little as four years ago.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A home under construction in Buckingham, Pa. Credit: William Thomas Cain / Getty Images

California creates 6,600 new jobs in November

Unempsearchjobselcentromarkralstonafpgetty

California employers added a modest 6,600 new jobs in November, driving the monthly unemployment rate down to 11.3%, its lowest level since the depths of the recession in June 2009.

But economists warned that the Golden State still has a long way to go in making up for the 1.3 million jobs that disappeared over the last four years and that the road toward historic, single-digit unemployment levels could be a tough slog.

"This is an OK jobs report," said Kimberly Ritter, associate economist with the Kyser Center for Economic Research at the Los Angeles Economic Development Corp. "It's good to see the unemployment numbers coming down across the board. We're still seeing slow progress ... and at least we can say it's steady."

The decline from October's jobless rate of 11.7% marked the fourth consecutive month of California employment growth, the California Employment Development Department reported.

The EDD also noted that it revised upward to 37,600 the number of new jobs for October. In all, 211,400 jobs have been created this year, an annual growth rate of 1.7%, the EDD said.

California's unemployment rate, which far exceeded the national rate of 8.6% in November, has dropped by more than a percentage point from a high of 12.5% in December 2010.

Similar drops were registered in major regions: Los Angeles County is down to 11.9% from 13% a year ago; Riverside-San Bernardino counties to 12.5% from 14.5% a year ago; Orange County to 8.1% from 9.4% a year ago; and Ventura County to 9.5% from 10.9% a year ago.

While economists caution that some of the improvement in the November numbers could be caused by people giving up on job searches, they point to the last two weeks' decline in the number of people putting in first-time claims for unemployment insurance benefits as a positive sign that a sustained recovery is underway.

The U.S. Department of Labor reported earlier this week that monthly requests for unemployment claims fell to their lowest level since 2008.

That guarded optimism is shared by Donald Whatley of Torrance, a furniture manufacturing production manager laid off in the spring. Whatley, 54, said he feels that the job climate is getting better, even though he's yet to be rehired.

"Just getting in the door is my problem," he said. "But I've seen the number of calls [from potential employers] turn around lately and, hopefully, something will turn up."

But the recent, more upbeat economic indicators could turn down again early next year if a partisan, divided Congress doesn't renew federal unemployment insurance benefits, the Obama administration and advocates for the unemployed warn.

The Department of Labor predicts that 230,000 out-of-work Californians would lose their benefits of a maximum of $450 a week by the end of January and 600,000 by the close of March if Congress takes no action. Unemployment insurance payments are a major stimulus for California's recovering economy, experts say.

Bonnie Ornitz, an out-of-work computer systems administrator from Granada Hills, worried that she could be forced to sell her house and move to another state with a lower cost of living if her unemployment benefits are cut off.

"I'll be living entirely out of savings," Ornitz said, and "my medical [insurance] payments will be going sky high."

RELATED:

Fed Ex earns, drop in claims push stocks higher

Job market brightens as unemployment claims sink

House approves payroll tax extension with strings attached

-- Marc Lifsher

Photo: Unemployed people check listings at a jobs center in El Centro. Credit: Mark Ralston / AFP/Getty Images.

California unemployment falls for 4th straight month in November

Unempsearchjobselcentromarkralstonafpgetty

California employers added 6,600 new jobs in November, driving the monthly unemployment rate down to 11.3%, its lowest level since the depths of the recession in June 2009.

The decline from October's jobless rate of 11.7% marked the fourth consecutive month that the Golden State has generated jobs as it gradually replaces some of the 1.3 million lost in the worst economic downturn in half a century, the California Employment Development Department reported.

The EDD also reported that it had revised upward to 37,600 the number of new jobs for October. In all, 211,400 jobs have been created this year, the EDD said.

California's unemployment rate, which far exceeds the national rate of 8.6% in November, has dropped by more than a percentage point from a high of 12.5% in December 2010.

While economists caution that some of the improvement in the November numbers could be caused by people giving up on job searches, they point to the last two weeks decline in the number of people putting in first-time claims for unemployment insurance benefits as a positive sign that a sustained recovery is underway.

The U.S. Department of Labor reported earlier this week that monthly requests for unemployment claims fell to their lowest level since 2008.

That guarded optimism is shared by Donald Whatley of Torrance, a furniture manufacturing production manager laid off in the spring. Whatley, 54, said he feels that the job climate is getting better, even though he's yet to be rehired.

"Just getting in the door is my problem," he said. "But I've seen the number of calls [from potential employers] turn around lately and, hopefully, something will turn up."

But the recent, more upbeat economic indicators could turn down again early next year if a partisan, divided Congress doesn't renew federal unemployment insurance benefits, the Obama administration and advocates for the unemployed warn.

The Department of Labor predicts that 230,000 out-of-work Californians would lose their benefits of a maximum of $450 a week by the end of January and 600,000 by the close of March if Congress takes no action. Unemployment insurance payments are a major stimulus for California's recovering economy, experts say.

RELATED:

Fed Ex earns, drop in claims push stocks higher

Job market brightens as unemployment claims sink

House approves payroll tax extension with strings attached

-- Marc Lifsher

Photo: Unemployed people check listings at a jobs center in El Centro. Credit: Mark Ralston/AFP/Getty Images.

Exports brighten trade figures at L.A. seaport

0HFECAVPQOAPCAC4MQ93CA59YO3ICAZH2BCYCAUX5AZFCA5I7T8CCA2KM4TGCAJJ8KB1CA3DIZ4YCANVTCPACAJ0XLDKCA67UV6JCABGWBTXCASYCRQZCA64025ECAMK171HCASY7OBDCA1YXNXCCAP9HEX0
The Port of Los Angeles had its biggest month ever for exports in November and the total was also high enough to drive the nation's busiest cargo container port past its record for goods shipped overseas in a year.

The Los Angeles port moved 195,878 containers containing exports in November, an increase of more than 15% over the same month a year earlier. That gave the port an 11-month total of more than 1.93 million cargo export containers, breaking the old mark of 1.84 million export containers recorded during the 12 months of 2010.

Imports through the Port of Los Angeles rose 6.2% in November compared with a year earlier. Overall, through the first 11 months of the year, cargo moving through the port was up less than 1% compared with a year ago.

Preliminary figures from the neighboring Port of Long Beach showed a 15.6% decline in imports in November, compared with the same month last year. Exports there were down 22.2% in November, compared with a year earlier.

Through the first 11 months of the year, overall cargo movement through Long Beach, the nation's second busiest container port, was down 3.5% compared with 2010. One reason for the decline was the loss of business from Hyundai, which moved its cargo terminal to the Port of Los Angeles last year.

ALSO:

Protesters block some West Coast port traffic

Business leaders join L.A.'s  Asia trade mission

Los Angeles wants a bigger slice of perishables market

-- Ronald D. White

Photo: Trains move cargo to and from the ports of Los Angeles and Long Beach, the nation's busiest seaport complex. Credit: Katie Falkenberg / Los Angeles Times

Consumer Confidential: Chase disclosure, retail sales, Toys R Us

Chasepic
Here's your thank-the-lord-for-the-nighttime Thursday roundup of consumer news from around the Web:

— From the Better Late Than Never file: Chase bank is making its checking accounts easier for customers to understand. The bank says it will start providing a three-page disclosure that helps consumers quickly identify the key terms of its basic checking account, such as the monthly fee and conditions customers need to meet to have that fee waived. Chase will be the first major bank to adopt a version of the consumer-friendly disclosure developed by the Pew Charitable Trusts earlier this year. As it stands, Pew says disclosures are often more than 100 pages and bury the fees and terms of most interest to consumers. The model disclosure developed by Pew in April is just one page and highlights terms such as the ATM withdrawal fee and overdraft policy. (Associated Press)

— Retail hopes are rising for the holiday season. The National Retail Federation says it now expects holiday sales for the November-December period to rise 3.8% to a record $469.1 billion. That's up from its more modest 2.8% forecast made in early October when the economy's health looked more uncertain. The new forecast is hardly stellar. The projected gain is still below the 5.2% pace seen during the holiday 2010 season from the prior year, but it's well above the 2.6% average increase over the past 10 years. And any upgraded forecast is good news as stores look to the final days before Christmas to rope in holiday shoppers. (Associated Press)

— But some retailers are taking no chances. Toys R Us says its stores nationwide will remain open for 112 uninterrupted hours beginning at 6 a.m. Tuesday, Dec. 20, and continuing through 10 p.m. on Christmas Eve. This is the second year Toys R Us has opened 24 hours during the holidays. The company will hold a two-day sale from Tuesday to Wednesday, and it has extended shipping deadlines. Orders submitted online by 2 p.m. on Christmas Eve can still be picked up in store on the same day, so presents can be wrapped and ready for Christmas morning. (Orlando Sentinel)

— David Lazarus

Photo: Chase wants customers to finally understand their checking accounts. Credit: Kathy Willens / Associated Press

 

New jobless claims drop to lowest level since 2008

New jobless claims dropped last week to the lowest level since May 2008
Initial claims for unemployment insurance dropped to 366,000 last week, the lowest level since May of 2008, in another sign that the job market is making a significant improvement.

The new figures released Thursday by the Labor Department showed a drop of 19,000 initial claims from the previous week's adjusted figure of 385,000. The four-week average is 387,750 -- below the 400,000 level that economists say is key to cutting into the unemployment rate.

There were 427,000 initial jobless claims in the same week last year, and more than 600,000 people were filing for unemployment benefits each week during the depths of the "Great Recession" in early 2009.

"It looks like Christmas is coming after all this year for the economy," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York. "Initial jobless claims have tumbled the last two weeks in a way that suggests more Americans are finding work."

The new jobless figures are consistent with an annualized economic growth rate of about 3.5% in the last three months of the year, Rupkey said, which would be a marked improvement over the 2% growth rate in the third quarter.

The sharp downward trend in jobless claims comes after the unemployment rate fell to 8.6% in November, from 9% the previous month. Thursday's data helped boost investors, with the Dow Jones industrial average up more than 100 points in early trading.

RELATED:

U.S. unemployment rate falls to 8.6%

Weekly jobless claims drop below 400,000

Fed puts off any new policy action until 2012

-- Jim Puzzanghera in Washington

Photo: Attendees at a New York job fair on Monday. Credit: Associated Press

 

 

California's home sales up 4% in November

HomeSales

California's housing market showed some signs of luster in November with sales picking up over the same month last year, but prices declined and foreclosures remained prevalent.

Sales fell 4.2% from October, although they commonly decline from October to November, and compared with November 2010, they were up 4%, according to real estate research firm DataQuick. A total of 32,669 homes sold last month, which is about 18% below the average for November since 1988, when DataQuick's statistics begin.

The state's median home price was $244,000, up 1.7% from October and down 4.3% from November 2010.

“These days, buyers and sellers have to contend with two sets of problems, which sometimes play into each other and sometimes conflict with each other," DataQuick President John Walsh said in a statement. "The first is the lousy economy and the opportunities it presents, for better or worse. The second is the dysfunctional mortgage-finance system. Interest rates may be at record lows, but the types of mortgages that are available have been drastically reduced and qualifying is a true grind.”

The state's median price, which is the point at which half the homes in the state sold for more and half for less, has declined year-over-year for 14 consecutive months. The most recent low in the median was hit in April 2009, at the height of the financial crisis. After that, the housing market began showing some signs of strength as a tax credit mostly aimed at first-time buyers helped fuel a buying spree. The market has been weak ever since that credit expired in April 2010.

Foreclosures are a big part of that weakness, as those homes and other so-called distressed properties tend to sell at a discount. Of the previously owned homes that sold last month, about 1 in 3 were foreclosures and about 1 in 5 were short sales, in which the home is sold for less than the outstanding debt on the property.

In Southern California, sales rose 0.3% from October and 4.2% from November 2010 with 16,884 homes bought across the six-county region. The median home price for the region was $275,000 in November, up 1.9% from October but down 4.2% from November 2010.

The Bay Area's housing market picked up a bit of steam last month. A total of 6,317 homes sold in the nine-county region, down 2.0% from October and up 3.4% from November 2010. The Bay Area's median home price was $363,500, up 3.9% from October and down 4.3% from November 2010.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: For-sale signs in Palo Alto. Credit: Paul Sakuma / Associated Press

California consumer confidence falls

Beverly Center Mall Dec 11 konrad fiedlerBB

California consumers' confidence plunged by about 10 percentage points in the fourth quarter of this year as the state continued to experience high unemployment and a volatile stock market rattled nerves, Chapman University reported.

The A. Gary Anderson Center for Economic Research said Wednesday that its composite index of consumer confidence fell to 78.6 in the December from 88.2 in the year's third quarter.

Any index level lower than 100 indicates that more consumers are pessimistic than optimistic about the economy and are less willing to buy new products.

The index is based on consumers' outlook on economic conditions and their spending plans, the Anderson Center said.

The new California results contrast with a national survey conducted by the University of Michigan which showed an uptick in consumer confidence to 64.1 in November from 55.7 in August.

RELATED:

Pacsun to close up to 200 stores

Furor surrounds Amazon's price comparison app

November retail sales rise 0.2%, less than expected

-- Marc Lifsher

Photo: An H&M store at the Beverly Center Mall. Credit: Konrad Fiedler / Bloomberg

Most Americans plan to cut spending on dining, entertainment, homes

SHOPPING
The next few months are going to be low key for consumers, more than half of whom plan to spend less on restaurants and entertainment while forgoing long vacations and major purchases, according to a new report.

Out of nearly 2,500 adults, 51% said they plan to take their money and save or invest it, according to a poll from Harris Interactive. That means 61% of consumers will be spending less on restaurants while 58% will cut back on entertainment expenses, though that’s slightly less than the percentage that said the same last year.

But fewer people -– 26% compared with 30% in 2010 -– say they have enough money to blow it the way they want. 

Buying a home is a nonstarter for 93% of respondents; 86% of people said they don’t even plan to move in the next half a year. And 88% won’t buy or lease a new car, truck or van while 97% won’t spring for a boat or recreational vehicle. 

In the thick of the holiday season, 77% said they won’t pick up a new computer, while 71% don’t intend to take a vacation that lasts longer than a week.

By now, it's not a new refrain: Harris researchers blame the high unemployment rate and the fluctuating economy for consumer belt-tightening.

“As it stands now, the cycle of bad feelings and decreased spending does not look like it’s positioned to change anytime soon,” the report said. 

RELATED:

Americans feel more confident, but should they?

Holidays have consumers feeling better, still cynical, poll finds

-- Tiffany Hsu

Photo: Carolina Ahumada and her daughter Nicole Gonzalez carry bags on Black Friday at South Coast Plaza in Costa Mesa. Credit: Mark Boster / Los Angeles Times

Top U.S. CEOs still cautious about economic recovery

Boeing Chief Executive Jim McNerney
The nation's top business chief executives remained cautious about the economic recovery, with a leading gauge of their outlook little changed in the last three months of the year.

The Business Roundtable's quarterly CEO Economic Outlook Survey Index ticked up slightly to 77.9 from 77.6 in the third quarter of the year. But that is still significantly down from the 109.9 level in the second quarter, before the European debt crisis began taking its toll on the global economy. The index can range from 150 to negative 50, with a figure above 50 signifying economic expansion and below 50 indicating a contraction.

"The findings of this survey reflect the continuation of a slow, uneven recovery characterized by ongoing economic uncertainty for American businesses," said the group's chairman, Boeing Co. Chief Executive Jim McNerney. The Business Roundtable, which represents top U.S. companies, surveyed 130 of its member chief executives.

Executives were a little more optimistic about company's sales in the next six months, with 68% expecting an increase, up from 65% in the third quarter. But they said that would have no effect on hiring. In fact, 35% of the chief executives said they expected to increase their U.S. employment in the next six months, down from 36% the previous quarter.

RELATED:

New signs of trouble for Goldman Sachs

Fed puts off any new policy action until 2012

U.S. data point away from another recession

-- Jim Puzzanghera in Washington

Photo: Boeing Chief Executive Jim McNerney at the APEC CEO Summit in Hawaii in November. Credit: Reuters.

Consumer Confidential: Holiday travel, higher airfares, Acura redux

Trafficpic
Here's your watching-the-detectives Wednesday roundup of consumer news from around the Web:

— Downturn, shmownturn. Despite continued worries about the economy, more Americans are expected to hit the highway this holiday season. AAA says it expects 91.9 million Americans — about 30% of the population — to travel at least 50 miles from home during the 11-day, year-end holiday season. That's up 1.4% from a year ago, making it the second-highest travel volume in the past 10 years. The majority (about 91%) of travelers are expected to venture forth by automobile, a 2.1% increase from a year ago. That comes in the face of high prices at the pump, with gas prices 29 cents higher than a year ago. On the other hand, air travel is expected to decline slightly. (CNN Money)

— And there's a reason for that. If you thought it was more expensive to fly this year, you're right. Average domestic airfares rose to $370 in the second quarter of 2011,up 8.5% from the average fare of $341 in the second quarter of 2010, according to the U.S. Department of Transportation. Second-quarter fares increased 3.9% from the first quarter, the second consecutive quarterly increase. And total prices may be even higher than government says. Fares in the study include only the price paid at the time of the ticket purchase and do not include other charges such as baggage fees, paid at the airport or on board the aircraft. (ConsumerAffairs.com)

— Honda's Acura brand isn't so ritzy after all. The carmaker had always hoped its Acura line could emulate Toyota and Nissan, which successfully propelled the Lexus and Infiniti brands, respectively, into the rarefied luxury-car tier alongside Mercedes-Benz, BMW and Cadillac. It never quite happened, and Honda now says it will try to reposition Acura as a mid-range, fuel-efficient brand. Over the next few years, Acura will introduce a new compact sedan, the ILX, built on Honda's global Civic platform, replacing the TSX. A redesigned RL flagship is expected by next fall, followed by a redesigned mid-sized TL sedan in the spring of 2013. (ConsumerAffairs.com)

— David Lazarus

Photo: Despite economic hard times, more people are expected to hit the road this holiday season. Credit: Michael Robinson Chavez / Los Angeles Times

 

Connect

Recommended on Facebook


Advertisement

In Case You Missed It...

Video




Categories


Archives