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Saturday, August 14, 2010

Negative News Flow

by Calculated Risk on 8/14/2010 08:55:00 AM

Although not unexpected, the news flow is about to take a more negative tone starting with the existing home sales report on August 23rd. We've been discussing this for some time ... and I'd like to highlight just a few pieces of forthcoming data:

  • The existing home sales report will show that sales collapsed in July (this is showing up in all the regional reports).

  • The existing home months-of-supply will jump to double digits.

  • House prices are probably falling again, although this might not show up in the repeat sales indexes until September or October (this data is released with a lag).

  • On August 27th, the second estimate of Q2 GDP will be released. This will probably show a significant downward revision from the preliminary estimate of 2.4% annualized growth. The downward revision is due to lower construction spending than the BEA initially estimated, less contribution from inventory adjustments, and the June surge in exports.

  • The unemployment rate will probably start ticking up again soon (or the participation rate will fall further).

    Just something to be aware of ...