Economic Update – Wall Street Doesn’t Mind Employment, Foreclosure Numbers

Retail is taking whatever it can these days in terms of good news. On Thursday the U.S. Department of Commerce reported that sales by American retailers decreased only 0.1 percent in February compared with January; analysts were expecting worse. If car sales are excluded, Americans actually bought 0.7 percent more than they did the previous month.But it isn’t time to break out the party hats, since consumers may well be stocking up on peanut butter and macaroni & cheese in the event of a job loss. The U.S. Department of Labor reported that new jobless claims rose 654,000 in the week ended March 7, which was more than expected.Despite efforts to stanch foreclosure rates, the latest on housing foreclosures nationwide isn’t so much different as in recent months. According to data from research firm RealtyTrac, residential foreclosures (default notices, auction sale notices and bank repossessions) nationwide were up 6 percent in February over January, with the February ’09 totals representing a 30 percent increase over the same month last year, which is the number that inspired the most headlines, though such a change is hardly surprising.When it comes to the concentration of foreclosures geographically, it’s partly a case of “round up the usual suspects.” The number-one major metro area for foreclosures, noted the Irvine, Calif.-based RealtyTrac, is metro Las Vegas, where 1 in 60 housing units received a foreclosure filing in February–a rate more than seven times the national average. Other metro areas with high foreclosure rates include Cape Coral-Fort Myers, Fla., and the California metro areas of Stockton, Modesto, Merced, Riverside-San Bernardino, Bakersfield, and Vallejo-Fairfield.Among states with high foreclosure rates, there was more geographic diversity, the company reported. Besides California, Florida, Arizona and Nevada, other top ten states for foreclosure include Illinois, Michigan, Ohio, Texas, Georgia and Virginia.In the commercial real estate realm, foreclosures still haven’t taken off as briskly as on the residential side, but certain cities may proved to be bellwethers in that regard. According to data compiled by Bloomberg, the rate of commercial properties with mortgage payments more than 60 days late has reached 3.93 percent in metro Cleveland. Metro Detroit is similarly vexed: its rate is 3.75 percent. Standard & Poor’s puts the average delinquency rate for all major North American commercial property markets at 1.1 percent.The Federal Reserve’s Flow of Funds report noted on Thursday that the net worth of U.S. households and non-profit groups decreased $5.1 trillion in the fourth quarter of 2008, to $51.5 trillion. It’s the lowest level in four years–which was arguably only part way up the housing bubble, so there will probably be further declines in the quarters ahead. It may have only be phantom wealth, but it hurts all the same. To give some perspective: $5.1 trillion is more than the 2007 GDP of Japan, and roughly three times as much as gross state product of California for that year.Wall Street didn’t seem to mind these numbers, not at least on Thursday. The Dow Jones Industrial Average was consistently up through the day, ending 239.66 points higher, or 3.46 percent. The S&P 500 was up 4.07 percent and the Nasdaq was up 3.97 percent.