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  • OECD's Better Life Initiative and Moving Beyond GDP

    Last year, the OECD launched a new initiative with the aim of moving beyond GDP as the key measurement of a nation's economic strength. The Better Life Initiative is designed to come up with new ways of evaluating the overall economic health of a nation and its citizens. OECD Secretary-General Angel Gurría narrates a short video to describe the progress of the initiative over the last 6 months: The OECD now has an interactive chart that allows you to see where member countries rank in various categories: Read more about the Better Life Initiative here .

  • Case-Shiller: Housing Prices Dropped in 19 of 20 Metros in November

    Just as it was in October, Phoenix was the only city among the twenty top US metro areas where home prices went up in November, according to the latest S&P/Case-Shiller Home Price Indices release. The indices showed a 1.3 percent drop in both the 10-city and 20-city composites. Washington, DC and Detroit remain the only two metro areas where home prices for November 2011 were higher than November 2010. "Atlanta, Las Vegas, Seattle and Tampa all reached new lows in November," according to the Case-Shiller report, with Atlanta looking particularly bad with an annual drop of 11.8 percent. Here's a look at the long term trend: From the release: ““Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall. Weakness was seen as 19 of 20 cities saw average home prices decline in November over October,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The only positive for the month was Phoenix, one of the hardest hit in recent years. Annual rates were little better as 18 cities and both Composites were negative. Nationally, home prices are lower than a year ago. The 10-City Composite was down 3.6% and the 20-City was down 3.7% compared to November 2010. The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand. The crisis low for the 10-City Composite was April 2009; for the 20-City Composite the more recent low was March 2011. The 10-City Composite is now about 1.0% above its low, and the 20-City Composite is only 0.6% above its low. From their 2006 peaks, both Composites are down close to 33% through November. Multi-family homes are showing more positive signs than single family homes. Otherwise there just isn't much positive coming through in these Case-Shiller reports of late. Read the full release here .

  • NAR's Pending Home Sales Index Drops in December, But Remains Above December 2010 Level

    The National Association of Realtors Pending Home Sales Index topped 100 in November. That represented a 19-month-high for the index. So while the index edged down in December, to 96.6, the big picture is still somewhat hopeful, says NAR chief economist Lawrence Yun : While we are not likely to look to the NAR as a primary, objective source of analysis on the state of the housing market, Yun is certainly a credible source, and the index's ups and downs do provide a helpful read on one key aspect of the economy. Read the NAR press release here .

  • eMarketer: Steady Rise in Online Ad Spending

    If eMarketer 's projections are correct, we will see a big uptick in online ad spending this year. It could be a strong indication that the digital economy is in for a surge. We wonder what the overall economic impact will be, and whether we can look back in 12 months and see online ad spending as a reliable economic indicator. Here is a look at eMarketer's projections for online ad spending in the US over the next five years: From the report: US online ad spending will post growth well above 20% again this year to reach nearly $40 billion, eMarketer estimates, as the internet continues to prove its worth to advertisers in a tough economic climate. “Advertisers’ comfort level with integrated marketing is greater than ever, and this is helping more advertisers—and more large brands—put a greater share of dollars online,” said David Hallerman, eMarketer principal analyst. Double-digit growth is expected through 2014, when US online ad spending will reach $52.8 billion. In 2016, eMarketer expects advertisers to spend $62 billion online. Read US Online Ad Spend to Close in on $40 Billion here .

  • Over Half of Skyscrapers Under Construction Globally are in China

    Take a look at this figure from Barclays Capital : A sign of progress? Sure. China is rapidly building more skyscrapers because of its recent economic growth. But this could also be a sign of the bad things to come. The Barclays Capital Skyscraper Index has shown "an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis." With 14 new skyscrapers going up in China, the question we have is whether this portends bad things for China's economy or the global economy as a whole? Hat tip BBC News .

  • Atlas Van Lines Migration Report

    The Watch is in Michigan for a couple of days, where people seem a little surprised, and yet pleased to see one report that has migration away from the state leveling off. In Atlas Van Lines 's 2011 migration report, Michigan is listed as balanced state. Interstate moves to and from Michigan were even in 2011. The same was true for half the US states. There were very few states that qualified as inbound states over the year. Take a look at the Atlas migration map: We understand why elected officials in Michigan might point to this map as a good sign. After all, Michigan had been an outbound state for 6 years in a row. But the map shows there is simply a lot less mobility across the US. Read the report here .

  • Marketplace Morning Report: Gold's Dropping Value

    The value of gold has dropped more than 400 dollars per ounce since an August 2011 high of $1900, Marketplace reports. This appears to be the result of growing confidence in the US economy, and the dollar gaining strength. Marketplace's Steve Chiotakis and Stephen Beard discussed the iconic metal's drop in this report .

  • Case-Shiller: Housing Market off to Poor Start in Fourth Quarter

    Only one of the twenty top US metro areas saw an increase in home prices from September to October, according to the latest S&P/Case-Shiller Home Price Indices release. That market was Phoenix, where the Case-Shiller price index rose a paltry 0.3 percent. The indices for Washington, DC and Detroit are up compared to October, 2010, while the other 18 markets are all down in year-to-year data. Here's a look at the long term trend: From the release: “There was weakness in the monthly statistics, as 19 of the cities posted price declines in October over September,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Eleven of the cities and both composites fell by 1.0% or more during the month. And even though some of the annual rates are improving, 18 cities and both Composites are still negative. Nationally, home prices are still below where they were a year ago. The 10-City Composite is down 3.0% and the 20-City is down 3.4% compared to October 2010. “In the October data, the only good news is some improvement in the annual rates of change in home prices, with 14 of 20 cities and both Composites seeing their annual rates of change improve. The crisis low for the 10-City Composite was back in April 2009; whereas it was a more recent March 2011 for the 20-City Composite. The 10-City Composite is about 2.4% above its relative low, and the 20-City Composite is about 1.9%.” Multi-family homes are showing more positive signs than single family homes. Otherwise there just isn't much positive coming through in these Case-Shiller reports of late. Read the full release here .

  • World Giving Index: Most Nations More Charitable in 2011

    People around the world were more charitable in 2011, according to the UK-based Charities Aid Foundation . CAF's World Giving Index measures giving in three areas: donating money, volunteering time to an organisation, and helping a stranger or "someone you didn't know who needed help." While charitable giving of money dipped slightly from 2010 to 2011, more people volunteered and/or helped strangers this past year. The United States topped the list with a World Giving Index score of 60. Ireland is a close second with a score of 59, while last year's top countries, Australia and New Zealand, remain near the top with scores of 58 and 57, respectively. Regionally, Southern Asia stands out for a significant increase in giving from 2010 to 2011. Here is a look at the regional breakdown: Read the full report here .

  • Adam Davidson: Shopping-Based Indicators and the State of Saving Among American Consumers

    In his most recent New York Times Magazine column, Adam Davidson writes about how he and his Planet Money colleagues surveyed the shopping indicator scene to see what Americans' shopping patterns might tell us about the state of the economy. From lipstick (once a strong indicator, now not so much) to Champagne sales ("consistently accurate"), there is no shortage of goods that are extolled as strong indicators. But in the end, the big takeaway is that consumers seem to remain consumers, and have yet to transition into savers. Davidson: Of all the indicators we looked at, one of the most consistently accurate was Champagne sales. The amount of French Champagne that Americans consume has predicted — with nearly 90 percent accuracy — the average American income one year later. Apparently, when we pop a Champagne cork, we know that good times are ahead (see chart). Champagne sales hurtled upward twice in recent history — at the peak of the Internet bubble in 1999 and during the heyday of the housing bubble in 2007. These were both followed by slowdowns as fewer people found reason to celebrate. There are so many indicators to choose from that you could glean just about anything regarding our economic future. In fact, the most telling indicator appears to be the sheer number of indicators themselves. Americans now have so many seductive things they can buy that there are ample consumer options no matter what we feel. Partly as a result, savings — known in economics as deferred consumption — have fallen steadily for more than 30 years, from a high of nearly 12 percent of income. It kissed zero before a tiny uptick in the past couple years. The decline of the savings rate is particularly troubling because it is consistent through busts and booms. During the fast growth of the late 1990s and mid-2000s, and the dark times that followed, people have been choosing to spend more and save less than ever before. Paradoxically, this happened just as pensions have been disappearing and life spans have been increasing. It suggests that Americans are so caught up in every short-term enthusiasm or agony that they haven't thought enough about long-term fiscal health. Read What Nail Polish Sales Tell Us About the Economy here .

  • WSJ Map: Food Stamp Use by State

    More American families are participating in the federally supported food stamps program this year, Phil Izzo reports in the Wall Street Journal. Izzo notes that enrollment in the program has increased 7.8%, and the actual number of Americans receiving food stamps has risen to 15% of the population. At Real Time Economics , Izzo shares an interactive map to show how enrollment varies from state to state. Click here to use the map. Read Food Stamp Use on the Rise here .

  • Ritholtz Calls for More Reliable Holiday Retail Projections

    Barry Ritholtz would like to rein in the hype about holiday spending. And not just this year. But every year. At least until we focus on some measurements that are reliable. Ritholtz points out that much of the reporting on holiday sales at this time of year is based upon consumer surveys. And those surveys have shown to be way, way off. From Ritholtz's most recent Washington Post column: When you conduct a survey, you are asking people to say what they plan to do. Hence, what you learn is what they believe about their future behavior. We are an unreliable bunch. If you want to learn how much people actually spent, you need to measure that at the cash register. History has shown again and again that there is little correlation between our expectations and our actions. Yes, we want to save more for retirement, lose weight, get into shape. We say so each January. And by February, you will discover the yawning chasm between intentions and action. So when those breathless retail sales surveys were released, we had no idea as to whether, and by exactly how much, sales might climb. The most that could be accurately said was that more people appeared to be in stores on Black Friday 2011 than in 2010. Indeed, that can be explained in part by the unseasonably warm weather around the country; as well as the extended store hours (including midnight Thanksgiving Day). How far off have these surveys been in the past? Enormously. In 2005, based on a survey on Black Friday and Saturday, the NRF forecast a 22 percent increase in holiday shopping gains for the Thanksgiving weekend. The results? Up just 1 percent. The National Retail Federation has been especially off in their projections. On his The Big Picture blog, Ritholtz shows just how far the NRF projections have been: Read Ritholtz's Washington Post Column, Did Black Friday save the season? Beware the retail hype , here . Read Humans Are Awful at Predicting Their Own Behavior at The Big Picture , here .

  • Home Prices Weaken, According to Case-Shiller Indices

    US home prices are now back to where they were in the first quarter of 2003, according to the latest S&P/Case-Shiller Home Price Indices release. Here's a look at the long term trend: From the release: “Home prices drifted lower in September and the third quarter,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The National Index was down 3.9% versus the third quarter of 2010 and up only 0.1% from the previous quarter. Three cities posted new index lows in September 2011 - Atlanta, Las Vegas and Phoenix. Seventeen of the 20 cities and both Composites were down for the month. Over the last year home prices in most cities drifted lower. The plunging collapse of prices seen in 2007-2009 seems to be behind us. Any chance for a sustained recovery will probably need a stronger economy. “Detroit and Washington DC posted positive annual rates of change and also saw an improvement in these rates compared to August. Only New York, Portland and Washington DC posted positive monthly returns versus August. It is a bit disturbing that we saw three cities post new crisis lows. For the prior three or four months, only Las Vegas was weakening each month. Now Atlanta and Phoenix have fallen to new lows too. On a monthly basis, Atlanta actually posted a record low rate of -5.9% in September over August. The markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside. The relative good news is that 14 cities saw improvements in their annual rates of change, versus the six that weakened.” Is "not as negative as it could have been" the new positive for housing reports? If so, this is a positive report. Read the full release here .

  • OECD: Slower Economic Activity on the Horizon

    The OECD 's composite leading indicators (CLIs) "point more strongly to slowdowns in all major economies" than they were last month. Here is a look at the composite CLIs for September: Anything below that 100 marker points to economic activity below the long term trend. And most OECD countries are below the line now. The US, Russia and Japan remain holdouts, but Japan and US are still trending downward toward the 100 marker. The indicators for Germany might be the most disappointing, and underscores the struggles in Europe: See the specific CLIs for OECD countries here .

  • Searching for the V Shaped Recovery

    While we're all accustomed to the idea that what goes up must come down, we've been hoping that the opposite is true, at least as far as the economy is concerned. Mark Wynne of the Federal Reserve Bank of Dallas refers to this way of thinking as the "plucking theory," a phrase coined by Milton Friedman. The idea is that the depth and speed of a recession would be matched by a mirrored recovery, like a plucked guitar string. Well, that certainly hasn't happened this time around. In an Economic Letter, Wynne shares some data from past recessions and recoveries that were indeed V-shaped, and then looks at the current situation: How does recent U.S. experience compare? It depends to some extent on when we define the crisis start. Conventional wisdom holds that it began in August 2007, and the NBER dates the business-cycle peak in December 2007. Chart 3A (below) overlays the recent behavior of U.S. real GDP relative to its precrisis trend along with the data plotted in Chart 2, taking 2007 as the first year of the crisis. Here we are just looking at annual GDP numbers. The numbers for 2011 and 2012 are based on projecting the 2010 number forward using the September 2011 Blue Chip Economic Indicators consensus. It is striking how closely the path of U.S. real GDP trend tracks the average path of output in countries that have experienced banking crises. In that sense, the pace of the recovery is more or less in line with what we might have expected based on the historical experience of other countries that have undergone similar banking calamities. However, reasonable people might argue that the crisis really started in 2008, when major U.S. financial institutions got into serious difficulties, ultimately prompting major policy initiatives from fiscal and monetary authorities to help stabilize the economy. Does this date change things? Chart 3B shows how the comparison is affected if we take 2008 as the beginning. If anything, the fit to the historical patterns observed elsewhere is better. That is, the performance of real GDP in the U.S. is almost exactly in line with what we might have expected based on the average experience of other countries that have gone through banking crises. Read the full Economic Letter here .
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