January Economic Picture

One month into 2009, nothing about the economy is looking good.

Before getting to the January numbers and charts though, I want to share this video from Glenn Beck’s show – Inconvenient Debt. It’s only about 4 minutes minutes long, but it will shock you if you haven’t already seen the chart Glenn supersized for this video.

Okay, moving along to what this past month looked like, which was not pretty in any sense of the word.

Six banks failed in January 2009, three of them large regional banks. The trend appears to be that the rate of bank failures is increasing rather dramatically. Twenty-five banks failed in all of 2008 (as many as in the years 2001-2007 combined). The six failures in the past monthputs this year already at about 1/4 of all the failures last year. Not a positive sign.

CNNMoney.com reports that January 2009 was the worst January ever for the Dow and the S & P 500.

Wretched month: It was the worst January ever for the Dow industrials and S&P 500, according to Stock Trader’s Almanac data.

The Dow lost 8.8% and the S&P 500 lost 8.6% in the month.

The Nasdaq’s loss of 6.4% was eclipsed by last January’s loss of 9.9%. That 2008 loss was the worst in the tech average’s history, going back to its inception in 1971.

Among the sector decliners during January, it was a particularly ugly month for bank stocks.

Fans of the S&P’s January barometer know that a weak January can spell doom for the rest of the year, as per the saying “As goes January, so goes the year.”

Continue reading…

Finally, one of the most frightening things I have ever seen is this article  from Calculated Risk – January Economic Summary in Graphs. Here are a few excerpts:

December Employment Report

This graph shows the unemployment rate and the year over year change in employment vs. recessions. The unemployment rate rose to 7.2 percent; the highest level since January 1993.

Nonfarm payrolls decreased by 524,00 in December, and November payrolls were revised down to a loss of 584,000 jobs. The economy lost over 1.5 million jobs in Q4 alone! From: Employment Declines Sharply, Unemployment Rises to 7.2 Percent

 

December Retail Sales

This graph shows the year-over-year change in nominal and real retail sales since 1993.

Although the Census Bureau reported that nominal retail sales decreased 10.2% year-over-year (retail and food services decreased 9.8%), real retail sales declined by 11.3% (on a YoY basis). This is the largest YoY decline since the Census Bureau started keeping data.

 

NAHB Builder Confidence Index in January

This graph shows the builder confidence index from the National Association of Home Builders (NAHB).

The builder confidence index was at 8 in January, a new record low.

 

 California Notices of Default

This graph shows the Notices of Default (NOD) by year in California from DataQuick.

There were a record 423,962 NODs filed in 2008, breaking the old record of 254,824 NODs in 2007.

The previous record had been in 1996 with 162,678 NODs filed. That was during the previous California housing bust in the early to mid-90s.
 

 

 Unemployment Claims

This graph shows weekly claims and continued claims since 1971.

The four week moving average is at 542,500; still below the recent peak of 558,750
in December.

Continued claims are now at 4.78 million – a new record (not adjusted for population) – just above the previous all time peak of 4.71 million in 1982.

 

 New Home Sales

This graph shows New Home Sales vs. recessions for the last 45 years. New Home sales have fallen off a cliff.

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