Wednesday, September 17, 2014

Tough to Gain Ground

The Census Bureau released some disappointing figures yesterday about the state of incomes in America. Income for the median American household in 2013 was $51,900, which was essentially unchanged from the year before. Median income is still down 8 percent from 2007, prior to the start of the recession.

What's even more distressing is that we really haven't made any real progress in this area in decades. Median household income isn't any higher now, adjusted for inflation, than it was in 1989. And we are still 8.7 percent below the inflation-adjusted peak income of $56,895, reached back in 1999.

One demographic did gain some ground last year: America's senior citizens. Households headed by people aged 65 and older saw their incomes increase by 3.7 percent last year, from a median income of $34,340 to $35,611.

Tuesday, September 16, 2014

Debt and the Young

Two long-term trends are evident in a new study out from a researcher at Dartmouth: More and more kids are attending college, and college is getting more expensive. Ergo, more and more young people are in debt starting from their twenties.

The study found that 35 percent of Americans aged 24 to 28 have debts that exceed their assets, which is double the number that we saw in the late 1980s. A total of 75 percent of all younger Americans have some sort of debt, and 22.4 percent of them have education debt, as opposed to just 5.1 percent of late baby boomers.

Not surprisingly, today's younger adults are having trouble spending on other things. Just 19.8 percent of them have home-related debt. That number was at 29.9 percent in the late 1980s, and as high as 43.1 percent in the mid-1970s.

Monday, September 15, 2014

Paying Less at the Pump

There were some interesting figures on consumer spending released by the Commerce Department on Friday. Americans' spending was up by a moderate 0.6 percent in August - but that number would have been stronger if not for the fact that we're spending less on gasoline. Without accounting for gas, consumer spending rose by 0.7 percent last month.

Spending at gas stations dropped by 0.8 percent in August. There are several reasons for this, but maybe the most prominent is that the price of a gallon of gas reached an average of $3.42 nationwide, down 3.8 percent from a year earlier.

Gas prices could be dropping even further, too. The price of fuel imports fell by 4.6 percent in August, their biggest monthly drop in two years, suggesting that the retail price may come down more as well.

Friday, September 12, 2014

Priced to Sell

One sign of the health of the real estate market is that it's taking less and less time to sell a house. According to a study from Realtor.com, the national median age of real estate listings has dropped to 82 days, down from 85 in July 2013.

Not surprisingly, the quickest sales come from the least expensive homes. The median age of listings for homes listed at less than $1 million is just 80 days. Those homes were taking more like 100 days to sell as of July 2012.

More surprisingly, homes at the top end of the market are moving more quickly than less expensive ones. Homes that list for just under $30 million tend to be listed for 180 days. But for those listed above $30 million, the median time on the market drops to 139 days.

Thursday, September 11, 2014

Another Look at the IPO Market

Most people pay attention to the IPO market only when companies are actually making their initial public offering - after that, it just becomes another stock. But Bloomberg maintains an IPO index that tracks companies that have gone public over the past 12 months. After being flat most of the summer, that index is now up 5.5 percent on the year.

What's propelled that growth? Camera maker GoPro is the biggest success story, up 185 percent since its IPO in June. TrueCar Inc., an automotive pricing and information website, is up 145 percent since its IPO. ZS Pharma, a Texas-based pharmaceutical firm, is up 120 percent.

On the other hand, the biggest loser is a stock called Violin Memory, a data storage company that went public at 9 a share back in September 2013. It has since dropped to $4.80 - a loss of 47 percent.


Wednesday, September 10, 2014

Americans Spending Less

After Americans' spending climbed by a robust 3.5 percent in 2012, it declined last year, according to a new study out from the Department of Labor. Spending dropped by 0.7 percent in 2013, led by a 7.6 percent drop in spending on apparel and a 4.7 percent drop in spending on entertainment.

A couple of categories did see increases in spending last year. We spent 2.1 percent more on health care in 2013 than we had in 2012 - but that followed a 7.3 percent increase in health care spending the prior year. Spending on housing increased by 1.5 percent in 2013, the only category that saw more of a rise last year than in 2012.

The average American spent $1,429 on housing per month in 2013, easily the largest of any category. We also spent $750 on transportation per month, $303 on health care, and $207 on entertainment.

Tuesday, September 9, 2014

Banking Gets Its Name Back

The banking industry took a beating during the financial crisis of 2008-09, both in terms of dollars lost and in terms of its reputation. According to Gallup surveys, the public's view of the banking industry was at a net positive of 32 as late as the middle of 2007. But it dropped to -1 in 2008 and to -23 in 2009.

That reputation remained in negative territory through last year, but it has finally rebounded to positive 8 in Gallup's latest survey. That figure is still well below where the industry's reputation had been before the financial crisis, since Gallup started asking this question back in 2001.

The real estate industry has had a similar rebound. During the subprime crisis, the reputation of that business dropped to -40, even lower than the banking business ever got. But it too has bounced back to positive territory in Gallup's latest survey, for the first time since 2006.