Economy Watch: Foreclosure Rates, Trade Deficit, Unemployment Fall; IMF Asks to Ease Up on Euro Debt
- Oct 12, 2012
RealtyTrac reported on Thursday in its U.S. Foreclosure Market Report for September that 180,427 U.S. residential properties suffered foreclosure filings—default notices, scheduled auctions and bank repossessions—during the month, a decrease of 7 percent from the previous month and down 16 percent from September 2011. September’s total was also the lowest U.S. total since July 2007.
The overall decrease during September was driven mostly by sizable decreases in the non-judicial foreclosure states, such as California, Georgia, Texas, Arizona and Michigan, according to RealtyTrac. Several judicial foreclosure states—Florida, Illinois, Ohio, New Jersey and New York, for example—continued to buck the national trend, seeing substantial year-over-year increases in foreclosure activity both in September and, for that matter, the third quarter.
“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market—at least at a national level,” RealtyTrac vice president Daren Blomquist said in a statement. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.”
IMF Urges More Flexibility on Euro Debt
Earlier this week, the International Monetary Fund scaled back its forecasts for growth in most parts of the world. On Friday (in Japan), IMF managing director Christine Lagarde urged the eurozone’s strictest deficit hawks (meaning the German government) to be a little more flexible when it comes to imposing austerity on the largest debtors of the zone (that would be Spain, Portugal and Greece).
Speaking at an opening session of the annual IMF and World Bank meetings in Tokyo, Lagarde said that it was a “narrow path” to cutting debts while at the same time not choking the growth needed to permanently overcome those masses of public debt. “Reducing public debt is incredibly difficult without growth,” she said, adding that high debt makes it harder to get growth–which is perhaps the defining vicious circle of our time. “So it’s a very narrow path that needs to be taken.”
It isn’t clear, of course, that the German government believes the Greeks (or the other high-debt states of the EU) need any more latitude in paring their deficits than they already have, whatever the IMF says. Coincidentally, Greece’s statistical agency said on Thursday that the country’s unemployment rate was officially 25.1 percent, up from 24.8 percent in June. The July rate is more than double, 54.2 percent, for Greeks aged 15 to 24. At these levels, a few tenths of a percent isn’t much of a move, but the numbers might have symbolic value for highlighting the dreadful condition of the Greek economy.
Trade Deficit Up, Unemployment Claims Down
Other economic news on Thursday was mixed: The U.S. Department of Commerce reported that total U.S. exports and imports were both down in August, which points to weakening economies in other parts of the world as well as domestically. Also, the U.S. trade deficit edged up $44.2 billion. Oil, and goods from China, accounted for most of the total.
On the other hand, initial U.S. unemployment claims took an unexpected dive for the week ending October 6, according to the U.S. Department of Labor on Thursday. Initial claims were 339,000 for the week, compared with the previous week’s revised figure of 369,000. The less-volatile four week moving average was thus a little more volatile than usual, dropping 11,500 to 364,000.
Wall Street was in positive territory for most of the day on Thursday, but ended mixed. The Dow Jones Industrial Average lost 18.58 points, or 0.14 percent, while the Nasdaq declined 0.08 percent. The S&P 500 eked out a minuscule 0.02 percent gain.