More Economic Bad News

If the unemployment numbers (hanging around 10%) weren't enough to convince you that everyone but the rich in America are still mired in a continuing recession, then consider the housing market. According to the Commerce Department, new home sales have dropped to their lowest level in nearly half a century.

Last month new home sales fell by a whopping 16.9%, to an annual sales volume of about 250,000 homes. That's pretty bad, considering that economists consider a sales volume of 700,000 homes to be the sign of a healthy economy. And there's little hope of the sales rising significantly any time soon (even though new home prices dropped 14% to a median price of $202,100). The pundits say the sales won't pick up until the homes foreclosed on are cleared from the market. That'll be a long time since there are 3 million foreclosures expected to happen this year.

This is also a bad sign for job creation. New home construction usually leads a jobs recovery. But builders are building right now. With the glut of unsold new homes on the market (and losing value), the number of building permits they have applied for is the lowest number in more than 50 years.

The economic pundits are now saying it could take another three years for the housing market to recover. Personally, I think that's an optimistic estimate. I don't think there'll be a significant recovery in housing until there's significant improvement in job creation. Our economy didn't just suffer a little downturn -- it saw millions of jobs disappear in a large and lasting recession. No segment of the economy will truly recover until most of those jobs are replaced (and I don't mean replaced with low-wage no-benefit jobs).

It would help if the government was spending to help with job creation, but they aren't. The Democrats have been too timid to do any extensive job creation, and now that the Republicans again control the House of Representatives they are in a position to block any job creation efforts (since their corporate masters like the current job situation).

As the unemployment and housing numbers clearly show, things are not getting any better. With the government inaction, it won't get better any time soon. We might as well get used to these bad times. They're going to last quite a while.