How well is the economy really doing?

[MichaelB]

Here's another piece of economic news that gives us a good read on the "state of the economy". Foreclosure rates are running at a rate lower than the run-up to the housing crash.

The percentage of loans on which foreclosure actions were started during the fourth quarter was 0.36 percent, a decrease of two basis points from the previous quarter, and down 10 basis points from one year ago. This foreclosure starts rate was at the lowest level since the second quarter of 2003.

The percentage of loans in the foreclosure process at the end of the third quarter was 1.77 percent, down 11 basis points from the third quarter and 50 basis points lower than one year ago. This was the lowest foreclosure inventory rate seen since the third quarter of 2007.

https://www.mba.org/2016-press-releases/feb/mortgage-foreclosures-and-delinquencies-continue-to-drop

 

[Senator]

That is great news, unless you are a real estate investor. Foreclosures are the life blood of a flipper...

That's why I think this market downward spiral is a blip, not a dooms day scenario.

 

[Another Reader]

Foreclosures and foreclosure starts are a lagging indicator. At least a year's lag. You get laid off, make the payments until you can't, then wait a minimum of three months of non-payment before foreclosure is initiated by the lender.

 

[Mulligan]

If we can trust the unemployment rate, I would assume foreclosures at the macro level should not be a problem for a while.


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[mrfeh]

I think it's clear the US economy is doing pretty well.

Is it going gangbusters? Nope. But, I'm just fine with that. I'd rather have steady 2-3% annual growth than the boom & bust cycle we've had the last 15 years.

 

[ejman]

I hate feel good threads like this with actual data . Where is the Sturm und Drang? Where is the sky is falling fun? Where is that wonderful all is lost - lets panic fun? - Oh my! A conspiracy to keep us poor souls in the dark no doubt...

 

[Senator]

I think it's clear the US economy is doing pretty well.

Is it going gangbusters? Nope. But, I'm just fine with that. I'd rather have steady 2-3% annual growth than the boom & bust cycle we've had the last 15 years.

Everyone that wants a job, has one. Wages are stalled, or even falling, but that will be the new normal. The new normal is service sector jobs, that by definition are low paying.

That is the trouble with the economy. It can be seen in many companies earnings reports. Top line revenue growth is flat.

 

[Dcharles]

I believe our low gas prices have helped prop up a lagging economy that is stuck in the mud with uncertainty on Federal regulation, lack of trust and an unstable world around us. I believe when the US regains it's leadership position in the world, stability will improve and hopefully our economy as well.


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[Independent]

I'm not sure what "regains it leadership" means in this context. The US has less than 5% of the world population and about 16% of world GDP (on a PPP basis).

With worldwide improved communication, mobile capital, and improving governments, it seems that the US share of the second will continue to decrease.

It's good that the US economy has improved since the depths of the Great Recession, and the OP gives one more measure of that. But, we're not going back to some dominant economic position.

 

[pb4uski]

I believe our low gas prices have helped prop up a lagging economy that is stuck in the mud with uncertainty on Federal regulation, lack of trust and an unstable world around us. I believe when the US regains it's leadership position in the world, stability will improve and hopefully our economy as well. ....

From another thread:

As an optimist, I chose 5% the past two years and we'll stick with that and not adjust it for inflation. In other words, I chose to start a WD rare of 5 percent from 60 years old when I retired and see how things go when I hit 70 and begin SS. ....

(emphasis added)

Huh?

 

[VFK57]

Foreclosures have declined surely yet it differ from state/county to state. In SF Bay Area,for example, losing a house does not mean you will rent and pay less. Rents went so high that many counties have law suits to stop pricing going through the roof.

 

[Sycamore]

While I agree with Senator that the market downturn is not a dooms day scenario, I see a global slowdown in the business I'm in.