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Hard landing in the US?

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A reader sent in a link to this article in the business and investing section of todays Globe & Mail . It looks like the housing slump in the US is starting to have an effect on the manufacturing sector, which saw a downturn for the first time in three years:

Industries such as wood, paper, furniture and appliances all were flat or slipped last month, according to the Institute for Supply Management, based in Tempe, Ariz.

In a report that points to a worrisome trend for the economy and for jobs, ISM said its manufacturing index registered 49.5 in November, behind October’s reading of 51.2. The last time the sector contracted was in April 2003. A reading below 50 indicates contraction.

The construction sector is still not looking so good either:

The index was one of two troublesome economic reports Friday. The Commerce Department said construction activity in October plummeted by the largest amount since 2001, and home building fell for the seventh month in a row.

Both reports raised concerns that the economy may be in for a hard landing. Stock prices fell in early trading Friday on Wall Street.

Before anyone panics I would like to emphasize that this is happening in the US only and has nothing to do with Vancouver. We have a protective housing bubble that keeps us from being dragged down economically by our largest trading partner.

Also we have the skytrain, which is like a magical train in the sky that will whisk us far away from any worldly problems to our gold-plated condominiums where we will bathe in tubs of warm milk and receive foot massages from beautiful unemployed americans.

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Freako

We are not seeing it because everyone is making money on houses and taking their profit and feeding our economy.Minor correction. They are spending their profit, but not taking it. If they took it old school (selling), this thing would never have grown so large.Jet ride down it will be.

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johnnycrasher

We are not seeing it because everyone is making money on houses and taking their profit and feeding our economy.When this is over it will be a jet ride down hill.

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Freako

Well she's right about that part. BC depends far more on exports to the US than any US state depends on exports to Canada. Yes, the Vancouver economy is very dependent. Which make the statements even more puzzling.

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Freako

BC has a great economic picture which means it has a great housing picture – its growing economy, record low unemployment, inter-provincial migration, international immigration, real income growth, and low inflation and low interest rates are benefiting Greater Vancouver buyers and sellers alike. Two related major sins here. 1. Pure extrapolation of trends rather than looking at underlying fundamentals.2. The assumption that what drives the U.S. economy is not correlated with what drives the Vancouver/B.C./Canadian economy.Looks like yet another case of economics degree from the bottom of a Cracker Jack box.

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Anonymous

Last I heard Americans consume half the worlds oil. So a slow down in that just might impact Alberta. Not to mention that they buy lumber from us to build their homes.etc., etc. To say that a slow down in the American economy won't effect Canada is…………stupid.

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digi

She explained that both markets have different economies, which create different housing markets."Thats like saying that McDonalds & Taco Bell have different menus, which create different stomach aches.

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the pope

VHB: you only get two massages if you own two condos. To get it somewhere other than your feet at least one of them has to be a leaky condo.Betamax: insane. Crazy Money Housing Cheerleaders.

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Anonymous

She explained that both markets have different economiesWell she's right about that part. BC depends far more on exports to the US than any US state depends on exports to Canada.

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wannaget2calgary

betamax said according to CMHC economist Carol Frketich: (some nonsense)Do all CMHC people do this? Is it a job requirement? Or is it a tactic used to get a job in the RE industry?

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betamax

according to CMHC economist Carol Frketich:"US market’s significant slowdown…is a result of different economic conditions than what we have in British Columbia. She explained that both markets have different economies, which create different housing markets."Whew, what a relief.For more escapist fantasy, see the entire article:http://tinyurl.com/y9clnm

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digi

We have a protective housing bubble that keeps us from being dragged down economically by our largest trading partner.Thank goodness for the protective bubble, otherwise I might be worried.I wonder, what with our robust housing market and the US market on the rocks, will the smart americans start buying here?

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Anonymous

I've been to america. The unemployed aren't really that beautiful.

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Van Housing Blogger

May I have two massages please? Does it have to be my feet?

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solipsist

Also we have the skytrain, which is like a magical train in the sky that will whisk us far away from any worldly problems to our gold-plated condominiums where we will bathe in tubs of warm milk and receive foot massages from beautiful unemployed americans.Oh pope – I am becoming irrationaly exuberant reading those words. I just hope that none are crying over that warm milk spilled into the platinum plated tubs. That could be depressing.Do you think they can read my colours (oh – colors. They are American after all) while massaging my calloused feet? My feet are calloused from dancing so gleefully at living in the most untouchable, special place in the world.

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