Today’s Economic Data Brings Us Back to Lows

Economic data released today shows that both consumers and the homes they live in have once again struck bottom. The Case-Shiller index, which tracks changes in the value of residential real estate both nationally and in 20 metropolitan regions, hit near its lowest seasonally adjusted level since June of 2003, lower than its last bottom which occurred right after the financial crisis in May of 2009. Nonseasonally adjusted monthly numbers ticked up 1.1 percent in the Case-Shiller Index, but even that number was down 5.9 percent from last years housing value number, which tells you where the long-term trend is heading. And consumer confidence readings were published today as well posting its lowest level since April of 2009.

Consumer confidence posted a reading of 44.5. To put that in perspective, a reading of 90 or above indicates that the economy is on solid footing. Anything below indicates trouble. This is less than half. Today’s reading also was a 25 percent decline from the prior month’s reading of 59.6 indicating that Americans really aren’t too pleased with unemployment above 9 percent, wild swings in the stock market, a downgrade of our country’s historically bulletproof debt, and of course the quibbling, whining and inefficiency of our leaders here in Washington.

One thing that is right in the Capital Beltway is the housing market. The seasonally adjusted Case-Shiller index of 20 cities today declined 4.6 percent from the prior 12 month reading, and year-over-year, every city posted a decline, led by Minneapolis with an 11 percent drop. Washington on the other hand fell the least in the group losing just 1.2 percent year-over-year. It posted a 1 percent gain over the prior month, and it is also up almost 7 percent since the bottom of the financial crisis while the entire index is negative. In fact, since the financial crisis bottomed in March of 2009, Washington D.C.’s housing market has outperformed every major city market in the index except for San Francisco, and it has by far the steadiest growth.

The chart below shows the Case-Shiller index readings for each of the 20 cities covered from March 2009 through today’s latest reading.

The average is the bold line in black and the highlighted line is that of Washington D.C. Clearly, the district is doing at least something right, because business in the city of taxes and regulation is booming. Is it any correlation that as frustrations mount and confidence declines in the nation, the city of its leaders flourishes?