As our President stays in the role of cheerleader and, as the Financial Times columnist Clive Crooksaid recently, willing the end to problems but not the means, just how confident dare we be? Income was reported up 1.4% last week, but most of that came from one-time government transfer payments. Ex the government largess, the monthly reading would have been a gain of 0.2%. Real wages (adjusted for inflation) were actually off 0.1%, which was the ninth monthly decline in a row.
Durable goods orders for May were up 1.8% versus April. But shipments of durable goods were off 2.1%, which was the tenth month in a row of declining shipments. California housing prices were up last month for the third monthly gain in a row, and the median home price rose 4.2% to $267,570. Inventories of homes for sale in the state fell to 4.2 months from a peak of 8.7 months in May of 2008. But you have to wonder: would the numbers be as good if California didn't have a $10,000 tax credit and some buyers also qualifying for the Federal tax credit of $8,000? With a state-wide unemployment rate of 11.5%, it's hard to imagine the good times will continue to roll.