Obama Stimulus May Have Gotten It Right After All

From 1Q2010 to 2Q2011, the stimulus caused the economy to operate above potential based on the CBO stimulus effect data. Now as the stimulus effect is waning, 2Q2011 GDP and Potential GDP are crossing. GDP trend lines show the economy is gravitating towards zero growth – and although the autopsy has not began, it is becoming clear that the stimulus did not provide the seeds necessary to reignite the economy.

Is the Stimulus Effecting Unemployment Claims?

Stimulus and initial unemployment claims may be correlated. If claims rise as stimulus ends is there any lasting benefit from the stimulus effort? Claims have been above the key 400,000 level for several weeks and there appears to be a risk that this high level may produce a reduction in monthly jobs growth that has occurred for the past several months.

New Home Sales Tumble 12.6% – Stock Market Does Not Care

New home sales in the New Normal are almost redundant. The markets have written off any construction resurgence for the short and medium term.