Where’s The Recovery?
April remains a cruel month. New jobless claims are the highest they’ve been since late January, with the four-week average stubbornly hovering around the 375,000 mark. Though we’re technically in a recovery, nobody believes it. A Rasmussen Reports survey earlier this week shows a majority is under the impression America is still in recession. That’s for good reason.
To dig America out of the hole created by the financial sector’s collapse, we need an explosion of industry. Instead, we’re seeing a fizzle. The Philadelphia Reserve Bank found manufacturing output growth slowed slightly in the mid-Atlantic region, with its index of general business activity for the factory sector falling from 12.5 in March to 8.5 in April. The lackluster performance dampens the rest of the economy. People who don’t feel secure about their economic future aren’t investing in homes, so housing inventory remains substantial, with 2.4 million houses listed for sale by the end of February. In a healthy market, an average of 6 million homes changes hands in the course of a year; today, that number is closer to 4.5 million. With a significant chunk of the market still in the process of foreclosure, housing won’t recover anytime soon.