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This Week's Business News

Personal Incomes

Incomes for all Americans rose 0.4% in May, below Wall Street expectations but far above the negative figure posted in April.

Consumer spending in May roughly was in line with incomes.

Jobless Claims

The four-week average of initial claims for jobless benefits - i.e., layoffs - now stands at 316,000. To put that into perspective, back in June 1997 that figure was 325,000.

Yep -- fewer people today are being laid off from their jobs when compared to the same period a decade ago. Obviously if Lou Dobbs knew about that he'd projectile vomit.

Club Fed

The voting members of the U.S. Federal Reserve believe our economy "seems likely to continue to expand at a moderate pace over coming quarters."

Regarding inflation, Club Fed apparently believes it's less of a risk today than in recent weeks and months. I don't know about that one, but time will tell.

Home Sales

5.99 million existing homes were sold in May, in line with Wall Street expectations and virtually identical to the 6.01 million sold in April.

915,000 newly-constructed homes were sold in May, below Wall Street expectations and below the 930,000 brand-new homes sold in April.

It goes without saying existing and new home sales both are well below the outsized levels achieved at the apex of the recent housing boom.

Construction Spending

Overall spending on construction projects in May posted a month-to-month gain of 0.9%, substantially above Wall Street expectations and the 0.2% gain recorded in April. Private-sector construction made up 76% of the value of total projects.

iPhone

Apple's much-ballyhooed iPhone debuted Friday morning. Thousands of young technophiles undoubtedly lined up for a chance to spend several hundred dollars on a gadget that will go out of style within a few years.

BTW, what ever happened to the Betamax?

On a serious note, Apple's share price has jumped 40 percent since the iPhone was announced. If you recently purchased shares then you need to take a step back, take a deep breath, wipe off the foam from the side of your mouth, and then read - line-by-line - the following books:

"The Intelligent Investor," by Ben Graham.
"Security Analysis," by Ben Graham.
"Wall Street on Sale," by Timothy Vick.

* * *

Data Sources: Census Bureau, National Association of Realtors, Labor Department, Commerce Department, FOMC Statement.


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Comments (3)

It goes without sa... (Below threshold)
John in CA:
It goes without saying existing and new home sales both are well below the outsized levels achieved at the apex of the recent housing boom.

I'm always amazed when a sector that is sizzling, like the housing market was, slows down a bit and the bears want to point to it as a looming recession.

On the other hand, the same group of people will bemoan the high cost of housing, even though a cooling housing market will help flatten or bring down home purchase prices.

And at last, the cries of the coming housing bubble amused me, especially when they tried to compare it to the tech bubble. In my modest economic knowledge, I didn't see it as being even close to the same.

When the tech bubble busted, people were standing around with pieces of paper that were worth nothing. When the non-existent housing bubble bursts, there will still be homes standing that can be repurchased by others who were biding their time. I guess that's why it's called real estate.

Simplistic analysis, maybe. But understandable to me.

John, you are spot on. I'm ... (Below threshold)
John F Not Kerry:

John, you are spot on. I'm a realtor in Minnesota. We are in a full-blown buyer's market, but homes are selling. The major problem here was the building of so many new townhomes that exiting townhome/condo owners have been having a nightmare time trying to sell at a small profit in order to bring some equity along for their next home. The dominoes, therefore, continue to stand, stalling the single family homes above the townhomes. In addition to that, many more buyers entered the market in the boom than was normal, especially with consistently low interest rates. The people who normally would be getting in for the first time now are already in. That being said, I am bullish on housing much more than I ever will be about the stock market.

Hooverville!... (Below threshold)
John F Not Kerry:

Hooverville!




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