If We're Not in Recession Now, ECRI Was Wrong

From the Blonddad Blog on Saturday:

"Tomorrow begins July, meaning that we have arrived at midyear, the point by which ECRI [MP: Self-described as the "world's leading authority on business cycles"] predicted we would enter a new recession.  While we don't have the June data, as of May real income, payrolls, and real retail sales continued to rise, although retail sales are below their March peak.  Industrial production was off slightly in May from its post recession peak in April.

In monthly data released last week, new home sales continued their recent improvement, reaching a 2 year high.  The Case-Shiller index of repeat home sales after adjusting for seasonality still improved slightly for the third month in a row.  Durable goods orders increased although their overall trend is still sideways.  The Chicago PMI remained slightly positive.  Consumer confidence continued to fade.  Consumer spending was flat, but as indicated above consumer income improved."

MP: After summarizing about two dozen additional economic indicators, most of which were mildly positive, neutral, or mildly negative, here the conclusion:

"All things considered, it appears that this summer, like the summers of 2010 and 2011, will likely be the weakest point of the year.  Deflation now should set up a rebound later.  Turning to the title of this piece, while I suspect it will be touch and go for a couple more months, I continue to believe that ECRI's prediction will ultimately be proven wrong."

May Las Vegas Home Sales Highest Since 2006

DQ News -- "Las Vegas-area home sales rose to a six-year high for the month of May as the number of transactions above $200,000 increased sharply from last year, making up for fairly flat sales for lower-cost properties. With foreclosure resales at the lowest level since late 2007, the median sale price rose above a year earlier for the second consecutive month, reaching a 17-month high. 

In May, 4,829 new and resale houses and condos closed escrow in the Las Vegas metro area. That was up 6.1% from a revised 4,550 the month before and up 5.7% from 4,570 sales a year earlier."

MP: With both home sales and median home prices increasing in Las Vegas year-over-year, and with foreclosures at close to a five-year low and sales for the month of May at a six-year high, I think it's safe to say that the Las Vegas real estate market is past the cyclical bottom, and on the way back up.  

Markets in Everything: Bakken Oil Field Basics Class

Missoulian -- An oil field basics class will be offered at Bitterroot College of the University of Montana. The class will teach the “nuts and bolts” of oil and gas field operation and will use both videos and in-person instruction.

The one-day class called “Bakken Oil and Gas Field Basics” will be offered July 13 and 20. The cost is $55 for those who register before July 6.

Poster of the Day: Our New Health Care System

This pretty much sums it up....

 

Photo of the Day: Field of Government Agencies

Ray Charles Sings America the Beautiful

Music starts about 1:30. It doesn't get any better than this.

As a Share of Household Spending, U.S. Has Most Affordable Food in World & It's Never Been Better

We hear reports all the time that real household incomes are stagnant or falling, the middle class is disappearing, household wealth has declined, and income inequality is rising.  All of those reports might make one think that the standard of living for the average American is bad and getting worse.  But here's one basic measure of a country's standard of living that shows Americans are better off than their consumer counterparts anywhere in the world: The share of household consumption expenditure on food consumed at home, see table below (USDA data here).  

Relative to our total household spending, Americans have the cheapest food on the planet - only 6.6% of the average household budget goes to food consumed at home.  European countries like Spain, France and Norway spend twice that amount on food as a share of total expenditures, and consumers in countries like Turkey, China and Mexico spend three times as much of their budgets on food as Americans.  

Another measure of food affordability, total food expenditures in the U.S. as a share of disposable income (see chart above, USDA data here), shows that food has become more affordable in the U.S. over time.  Spending on food has fallen from more than 25% of the average American's income in 1933 to only 9.4% in 2010, an all-time low.  Between 1980 and 2010, the share of disposable income spent on food in the U.S. fell from 13.2% to 9.4%, which is equivalent to almost a 4% increase in the average American's disposable income over the last 30 years.   And a number of countries in the list below spend more on food as a share of household expenditures today than Americans spent on food during the Great Depression. 

Bottom Line: As a share of our disposable income, food in the U.S. has never been cheaper than it was in 2010 (more recent data are not yet available).  And Americans spend less on food as a share of our household expenditures than consumers anywhere else in the world.   

Share of Household Spending     on Food, 2010	%
United States	6.6
Singapore	7.5
United Kingdom	9.7
Canada	9.8
Ireland	10.2
Switzerland	10.3
Australia	10.7
Germany	11.0
Austria	11.1
Denmark	11.5
Netherlands	11.6
Hong Kong, China	12.1
Finland	12.5
Qatar	12.5
Sweden	12.6
Belgium	12.7
Spain	13.1
France	13.2
Norway	13.4
Malaysia	13.9
Bahrain	14.3
Kuwait	14.5
United Arab Emirates	14.5
Japan	14.8
Italy	14.8
Slovenia	14.9
South Korea	15.0
New Zealand	15.0
Portugal	15.6
Czech Republic	16.0
Greece	17.3
Latvia	17.5
Israel	17.6
Ecuador	17.8
Slovakia	17.9
Hungary	17.9
Uruguay	18.6
Colombia	18.8
South Africa	19.6
Poland	20.2
Argentina	20.2
Estonia	20.3
Bulgaria	21.3
Turkey	21.4
Lithuania	21.7
China	22.3
Mexico	22.7
Croatia	23.2
Chile	23.2
Costa Rica	23.4
Iran	23.4
Saudi Arabia	23.7
Taiwan	23.9
Brazil	24.8
Thailand	25.0
Dominican Republic	25.1
Turkmenistan	25.8
India	27.7
Bolivia	28.0
Venezuela	28.9
Peru	28.9
Russia	29.0
Romania	29.7
Uzbekistan	31.4
Indonesia	32.2
Bosnia-Herzegovina	32.7
Macedonia	32.9
Tunisia	35.6
Kazakhstan	35.9
Philippines	36.4
Egypt	38.0
Guatemala	38.0
Vietnam	38.0
Nigeria	39.8
Morocco	40.5
Jordan	40.6
Georgia	41.3
Ukraine	41.7
Kenya	41.7
Pakistan	41.9
Belarus	42.1
Algeria	43.7
Azerbaijan	45.3
Cameroon	46.9