The third quarter showed great confidence in the form of stock market returns. We started off with better than expected earnings reports and a nice stock market rally. Consumers are wondering if the recession is over or is this just a tease.
There are many opinions of economists and analysts and anyone can choose what you wish to believe. Some say the recession is over and the economy is recovering, others say we are still in contraction. I believe it is worth taking a closer look at what the economic data is telling us.
Unemployment is considered to be a lagging indicator meaning we may still have job losses after we are in recovery. Some have named this a “jobless recovery” similar to the 1991 recession. Recently the unemployment rate rose to 9.7%. The nation is still showing job losses, not job growth. However there is slight growth in government and health care related jobs.
Housing appears to be stabilizing as there were increased sales in the last three months. Some cities, including Denver are showing the least rate of decline in housing prices and some analysts are calling a bottom here. However some believe the summer months may not be giving us a true measurement and any increases were largely on foreclosed properties. This again is a trend in the right direction but certainly not a significant recovery yet after over three years of recessionary housing prices.
Retail sales are also a good indicator of what the consumer confidence is and how well the household is managing. While back to school season helped some retailers, it was mostly the large discounters who benefited.
Consumer spending makes up 70 percent of the GDP number and with high unemployment and low housing prices it will be difficult to see much of a rise in GDP without the other indicators improving. Consumer savings are up and spending is down which are good lessons learned during hard times. Recovery will need sustainable, reasonable spending to gradually return.
Gross Domestic Product (GDP) which measures the growth of the economy in general is still negative by 1.5 percent for the second quarter 2009. Again, this is a nice trend up from where we were at the deepest part of the recession, but it is still showing the economy is in contraction.
The Consumer Price Index (CPI) is a measurement of price inflation or deflation. At 0.1 percent this is very low indicating a neutral position.
The Consumer Credit numbers declined significantly for the last several months. This indicator is popular since our credit crisis focuses on bank lending and the consumer’s ability to borrow money. There has been a significant contraction indicating once again the drag on growth potential without the consumer’s ability to borrow.
There are many other economic indicators that may be helpful but these are the areas most affected by consumers. Investors may be looking at different indicators, such as stock market trends, investment fundamentals, dividend yields and historical trends.
The overall picture looks significantly better than even a few months ago. My favorite analogy is the business cycle which moves from recession to growth and back again over a period of years. This would indicate that 20 months of recession is pushing the outer limits of previous contractions. Just by looking at the business cycle alone some analysts can determine we are nearing the end of ‘The Great Recession’ or the largest economic decline since the Great Depression.
Source
Monday, December 28, 2009
Tuesday, December 15, 2009
Latisys Expands Chicago Data Center
The company says the expansion is designed to meet its singificant growth. The company has doubled the size of its Chicago employee base since the beginning of the year and expects to grow staff at the Chicago-area data center by an additional 33 percent over the next six months.
Phase 1 of the expansion project brings an additional 9,000 square feet of high density raised floor to Latisys' Oak Brook, Illinois data center.
This additional space is already 70 percent sold, and the data center now has 70 customers that are using Latisys' managed hosting, colocation and disaster recovery services.
"An increasing number of organizations are turning to our suburban Chicago facility as a cost-effective, secure and seamless way to address their long term need for additional data center space, power and services," says John McCreary, general manager of Latisys. "The completion of the first phase of our facility expansion and employee growth reflect Latisys' commitment to providing customers with the scalability, flexibility and agility to grow and thrive."
Latisys is also currently constructing the second phase of the expansion project, which will add an additional 13,000 square feet of high density raised floor space to the Oak Brook facility in Q3 2009.
A couple of other data center operators also recently announced data center expansions in the Chicago area.
Source
Phase 1 of the expansion project brings an additional 9,000 square feet of high density raised floor to Latisys' Oak Brook, Illinois data center.
This additional space is already 70 percent sold, and the data center now has 70 customers that are using Latisys' managed hosting, colocation and disaster recovery services.
"An increasing number of organizations are turning to our suburban Chicago facility as a cost-effective, secure and seamless way to address their long term need for additional data center space, power and services," says John McCreary, general manager of Latisys. "The completion of the first phase of our facility expansion and employee growth reflect Latisys' commitment to providing customers with the scalability, flexibility and agility to grow and thrive."
Latisys is also currently constructing the second phase of the expansion project, which will add an additional 13,000 square feet of high density raised floor space to the Oak Brook facility in Q3 2009.
A couple of other data center operators also recently announced data center expansions in the Chicago area.
Source
Saturday, November 28, 2009
Recovery of economy a ways off, expert says
Weak energy industry, banking and commercial real estate prospects may hold Colorado back from economic recovery any time soon, according to economist Mark Snead.
Snead, the branch executive in Denver for the Federal Reserve Bank of Kansas City, spoke Tuesday evening during an economic forum at Two Rivers Convention Center. A cold winter may help natural gas prices and benefit Colorado energy companies, Snead said, but it’s unlikely the market will turn around quickly.
“There really is nothing in this data to suggest Colorado will bounce out of this quickly. In fact, (Colorado) may lag significantly,” Snead said.
Snead said he expects retail vacancy rates to continue to rise in Denver and Colorado, and that commercial construction, although on the rise since the middle of summer, has devalued significantly.
Residential real estate in Colorado, however, likely hit bottom in the spring and has been on the upswing for four or five months, Snead said. Both the number of homes selling and the prices they sell for has increased here.
Banking, meanwhile, is another story. An upswing in that sector, Snead said, will take a while. The ratio of nonperforming assets to total assets is higher in Colorado than the U.S. average. The ratio is unlikely to accelerate any more, Snead said, but it’s “still not moving in any meaningful way. You will be well behind the U.S. recovery. It’s a little depressing.”
There is hope, though. CNBC recently ranked Colorado as the third best state in the nation for doing business, and MSNBC named Colorado this summer as one of the five states most likely to experience economic recovery first.
Gov. Bill Ritter showed confidence in the state’s prospects Monday even as he commented on a budget shortfall totaling more than half a billion dollars.
“Our economy is still in better shape than many other states. Our economic-development strategy is working,” Ritter said.
Colorado has outperformed the U.S. in job growth during the past five years, but job growth in the nation has outdone the state this year.
Source
Snead, the branch executive in Denver for the Federal Reserve Bank of Kansas City, spoke Tuesday evening during an economic forum at Two Rivers Convention Center. A cold winter may help natural gas prices and benefit Colorado energy companies, Snead said, but it’s unlikely the market will turn around quickly.
“There really is nothing in this data to suggest Colorado will bounce out of this quickly. In fact, (Colorado) may lag significantly,” Snead said.
Snead said he expects retail vacancy rates to continue to rise in Denver and Colorado, and that commercial construction, although on the rise since the middle of summer, has devalued significantly.
Residential real estate in Colorado, however, likely hit bottom in the spring and has been on the upswing for four or five months, Snead said. Both the number of homes selling and the prices they sell for has increased here.
Banking, meanwhile, is another story. An upswing in that sector, Snead said, will take a while. The ratio of nonperforming assets to total assets is higher in Colorado than the U.S. average. The ratio is unlikely to accelerate any more, Snead said, but it’s “still not moving in any meaningful way. You will be well behind the U.S. recovery. It’s a little depressing.”
There is hope, though. CNBC recently ranked Colorado as the third best state in the nation for doing business, and MSNBC named Colorado this summer as one of the five states most likely to experience economic recovery first.
Gov. Bill Ritter showed confidence in the state’s prospects Monday even as he commented on a budget shortfall totaling more than half a billion dollars.
“Our economy is still in better shape than many other states. Our economic-development strategy is working,” Ritter said.
Colorado has outperformed the U.S. in job growth during the past five years, but job growth in the nation has outdone the state this year.
Source
Sunday, November 15, 2009
The recession arrived late in Denver. So will the recovery
Denver’s economic immune system was able to fend off the effects of the recession which took hold of the U.S. early in 2007 and plagued the country for almost a year.
Late in 2008, however, the Mile High City succumbed and over the past 12 months has lost jobs as fast, and indeed slightly faster, than the nation as a whole.
Across major industrial sectors, construction employment is down 15%, followed by manufacturing (-7%), trade and transportation (-5.4%), information services (-5.3%) and financial services (-4.6%).
Although Denver’s unemployment rate (7.8%) is below the national average (9.4%), retail sales in the metro area are down over 11% year to date compared to -9.1% for the country as a whole.
Residential building permits in Denver are down by 66% year to date compared to a countrywide year-to-date decline of 47%.
Looking forward, there are some large clouds on Denver’s economic horizon in the form of potential layoffs in the wake of the acquisition by Oracle of Sun Microsystems.
What’s more, the sustained drop in office-based employment over the past year will probably cause office vacancy rates in the metro area to head higher through mid-2010.
Having said this, a number of indicators suggest that economic activity in Denver will stabilize in late 2009 and begin to recover in 2010.
First, despite its current downturn, Denver is fundamentally an attractive business location in terms of workforce quality, quality of life and the cost of living and doing business.
Second, the most recent Leeds Business Confidence Index increased from 35.5 to 46.5 in the third quarter due to increases in all six of its component series. This increase was reinforced by a stronger outlook for capital spending and for employment.
Finally, according to the National Association of Realtors, existing home sales in Denver have increased for the past three months.
Source
Late in 2008, however, the Mile High City succumbed and over the past 12 months has lost jobs as fast, and indeed slightly faster, than the nation as a whole.
Across major industrial sectors, construction employment is down 15%, followed by manufacturing (-7%), trade and transportation (-5.4%), information services (-5.3%) and financial services (-4.6%).
Although Denver’s unemployment rate (7.8%) is below the national average (9.4%), retail sales in the metro area are down over 11% year to date compared to -9.1% for the country as a whole.
Residential building permits in Denver are down by 66% year to date compared to a countrywide year-to-date decline of 47%.
Looking forward, there are some large clouds on Denver’s economic horizon in the form of potential layoffs in the wake of the acquisition by Oracle of Sun Microsystems.
What’s more, the sustained drop in office-based employment over the past year will probably cause office vacancy rates in the metro area to head higher through mid-2010.
Having said this, a number of indicators suggest that economic activity in Denver will stabilize in late 2009 and begin to recover in 2010.
First, despite its current downturn, Denver is fundamentally an attractive business location in terms of workforce quality, quality of life and the cost of living and doing business.
Second, the most recent Leeds Business Confidence Index increased from 35.5 to 46.5 in the third quarter due to increases in all six of its component series. This increase was reinforced by a stronger outlook for capital spending and for employment.
Finally, according to the National Association of Realtors, existing home sales in Denver have increased for the past three months.
Source
Wednesday, October 28, 2009
Home Prices: There's No Quick Recovery Ahead
So, is our long national nightmare over? Has the housing market finally hit bottom?
There has been some muted -- albeit exhausted -- cheering from homeowners in recent weeks. But before we break out the champagne, look out for further potential problems just down the road.
Scott Pollack
The good news? According to the closely watched Case-Shiller Home Price Index, which tracks home prices across 20 major cities nationwide, the three-year housing slump slowed sharply in April and May.
May's decline was just 0.2%, the slowest in two years. And several cities actually saw prices rise -- among them Denver, Washington, D.C., Chicago, Boston, Cleveland and Dallas.
Even Miami only fell about 1% in May. That's a great month down there. Previously, prices had been falling 3% a month.
We'll get an even better picture of the situation when the Case-Shiller figures for June are released on Aug. 25.
But these data aren't the only hopeful signs.
Inventories of unsold homes have come down. According to the National Association of Realtors, there were about 3.8 million unsold homes on the market at the end of June. That's down a long way from 4.5 million a year ago.
And yes, housing affordability is dramatically better. People, obviously, need to live somewhere. At some point, housing gets cheap enough that the fundamentals start to look good.
The average home is about a third cheaper than it was at the peak three years ago, a plunge unprecedented since the Great Depression. In the hardest-hit places, such as Phoenix, Las Vegas and Miami, average prices have been halved or better from their bubble peaks.
Source
There has been some muted -- albeit exhausted -- cheering from homeowners in recent weeks. But before we break out the champagne, look out for further potential problems just down the road.
Scott Pollack
The good news? According to the closely watched Case-Shiller Home Price Index, which tracks home prices across 20 major cities nationwide, the three-year housing slump slowed sharply in April and May.
May's decline was just 0.2%, the slowest in two years. And several cities actually saw prices rise -- among them Denver, Washington, D.C., Chicago, Boston, Cleveland and Dallas.
Even Miami only fell about 1% in May. That's a great month down there. Previously, prices had been falling 3% a month.
We'll get an even better picture of the situation when the Case-Shiller figures for June are released on Aug. 25.
But these data aren't the only hopeful signs.
Inventories of unsold homes have come down. According to the National Association of Realtors, there were about 3.8 million unsold homes on the market at the end of June. That's down a long way from 4.5 million a year ago.
And yes, housing affordability is dramatically better. People, obviously, need to live somewhere. At some point, housing gets cheap enough that the fundamentals start to look good.
The average home is about a third cheaper than it was at the peak three years ago, a plunge unprecedented since the Great Depression. In the hardest-hit places, such as Phoenix, Las Vegas and Miami, average prices have been halved or better from their bubble peaks.
Source
Thursday, October 15, 2009
FORTRUST Data Center's AppSafe Enables Virtualized Disaster Recovery
FORTRUST Data Center, a provider of data center services in Colorado, announced a managed disaster recovery service, AppSafe, to provide “safe, affordable, and flexible solution to ensure the rapid recovery of business-critical applications in the event of an outage or disaster.”
AppSafe is built on the latest virtualization technologies allowing business applications and data to be replicated to a virtual environment. With this, an image of a customer’s server is maintained in FORTRUST’s virtual server environment. In the event of an outage, data is activated in the virtual environment and end-users are re-routed to access applications and resume business functions.
In effect, AppSafe provides a cost-effective, fully supported disaster recovery strategy with no requirement for capital expenditure, officials said.
“With this new service, businesses will have the option to remotely execute a full server recovery or achieve immediate failover using a high-availability solution,” said Rob McClary, vice president of FORTRUST, in a statement. “The key benefit for SMBs is affordable disaster recovery with no previous hardware investment.”
AppSafe, along with FORTRUST’s portfolio of backup and storage services, provides an end-to-end disaster recovery solution for customers, officials commented.
FORTRUST recently announced that it will offer Remote Data Backup services powered by Incentra to both current customers and companies that are not colocated in the data center. The service will allow companies operating in multiple locations to back up their data to one secure location.
Source
AppSafe is built on the latest virtualization technologies allowing business applications and data to be replicated to a virtual environment. With this, an image of a customer’s server is maintained in FORTRUST’s virtual server environment. In the event of an outage, data is activated in the virtual environment and end-users are re-routed to access applications and resume business functions.
In effect, AppSafe provides a cost-effective, fully supported disaster recovery strategy with no requirement for capital expenditure, officials said.
“With this new service, businesses will have the option to remotely execute a full server recovery or achieve immediate failover using a high-availability solution,” said Rob McClary, vice president of FORTRUST, in a statement. “The key benefit for SMBs is affordable disaster recovery with no previous hardware investment.”
AppSafe, along with FORTRUST’s portfolio of backup and storage services, provides an end-to-end disaster recovery solution for customers, officials commented.
FORTRUST recently announced that it will offer Remote Data Backup services powered by Incentra to both current customers and companies that are not colocated in the data center. The service will allow companies operating in multiple locations to back up their data to one secure location.
Source
Monday, September 28, 2009
Despite struggling economy, Denver still attracts business
DENVER - An new economic summary says Denver and the surrounding metro area's solid reputation as a great place to live means the business and economic climate will be on the rebound sooner than most locales across the nation.
The summary data was compiled for August earlier this week by the Metro Denver Economic Corporation (Metro Denver EDC).
"We are continuing to report a better-than-average outlook for Metro Denver's economy," Tom Clark said, executive vice president of the Metro Denver EDC. "We have done a much better job at diversification of our economy in sectors on the cutting edge for long term growth."
Clark told 9NEWS Colorado is a leader in the growing areas of Internet technology, aerospace and alternative energy.
"It's the ongoing development in these areas that will provide a sustained recovery for the Denver metro area," he said.
Recovery is still going to have significant hurdles to overcome, with high numbers of unemployment in the state and additional layoffs occurring across all economic sectors, but the Metro EDC is optimistic.
"Those are still challenges, under TARP (Troubled Assets Relief Program) it's been more difficult for banks to be able to lend to real estate projects," Clark said. "And most of us as consumers are still kind of waiting and watching before we make those purchases in large durable goods; obviously 'Cash to Clunkers' is a little bright spot in the (past year)."
Clark says the main reason the state will be among the first to recover is because people want to be in Colorado.
"Companies move to great places with great people, and Colorado has both of those, and Metro Denver does particularly," he said. "I think back to the 1980's when we were high in national rankings, like the second-most polluted metropolitan area in the country, the third-most congested, we made some great strides here in the last couple of decades."
Source
The summary data was compiled for August earlier this week by the Metro Denver Economic Corporation (Metro Denver EDC).
"We are continuing to report a better-than-average outlook for Metro Denver's economy," Tom Clark said, executive vice president of the Metro Denver EDC. "We have done a much better job at diversification of our economy in sectors on the cutting edge for long term growth."
Clark told 9NEWS Colorado is a leader in the growing areas of Internet technology, aerospace and alternative energy.
"It's the ongoing development in these areas that will provide a sustained recovery for the Denver metro area," he said.
Recovery is still going to have significant hurdles to overcome, with high numbers of unemployment in the state and additional layoffs occurring across all economic sectors, but the Metro EDC is optimistic.
"Those are still challenges, under TARP (Troubled Assets Relief Program) it's been more difficult for banks to be able to lend to real estate projects," Clark said. "And most of us as consumers are still kind of waiting and watching before we make those purchases in large durable goods; obviously 'Cash to Clunkers' is a little bright spot in the (past year)."
Clark says the main reason the state will be among the first to recover is because people want to be in Colorado.
"Companies move to great places with great people, and Colorado has both of those, and Metro Denver does particularly," he said. "I think back to the 1980's when we were high in national rankings, like the second-most polluted metropolitan area in the country, the third-most congested, we made some great strides here in the last couple of decades."
Source
Tuesday, September 15, 2009
Forbes: Denver 7th best for housing recovery
Denver home sales activity is up 1.5 percent year over year, and foreclosure resales account for less than a quarter of transactions, Forbes noted.
Colorado Springs fared even better, ranking as the third-best city for a recovery. Sales activity in the Springs is up 14 percent year over year, and foreclosure resales account for only 20 percent of those sales, Forbes said.
In compiling the list, Forbes looked at 161 of the country's largest metropolitan areas. It identified those where sales activity had picked up over the last year, but where foreclosure sales, as a percentage of overall sales were the lowest. All data came from Zillow.com, an online housing data firm based in Seattle.
"Our list doesn't profess to call the turnaround, but rather point out which cities are in the lead on the road to recovery," Forbes' Matthew Woolsey wrote.
Topping the list was the Miami-Fort Lauderdale area, where sales activity is up 27 percent and foreclosure resales account for 3.5 percent of transactions.
Rounding out the top 10 are, in order: Lincoln, Neb.; Colorado Springs; Salem, Ore.; San Luis Obispo, Calif.; Bremerton, Wash.; Denver; Redding, Calif.; Santa Barbara, Calif.; and San Jose, Calif.
Source
Colorado Springs fared even better, ranking as the third-best city for a recovery. Sales activity in the Springs is up 14 percent year over year, and foreclosure resales account for only 20 percent of those sales, Forbes said.
In compiling the list, Forbes looked at 161 of the country's largest metropolitan areas. It identified those where sales activity had picked up over the last year, but where foreclosure sales, as a percentage of overall sales were the lowest. All data came from Zillow.com, an online housing data firm based in Seattle.
"Our list doesn't profess to call the turnaround, but rather point out which cities are in the lead on the road to recovery," Forbes' Matthew Woolsey wrote.
Topping the list was the Miami-Fort Lauderdale area, where sales activity is up 27 percent and foreclosure resales account for 3.5 percent of transactions.
Rounding out the top 10 are, in order: Lincoln, Neb.; Colorado Springs; Salem, Ore.; San Luis Obispo, Calif.; Bremerton, Wash.; Denver; Redding, Calif.; Santa Barbara, Calif.; and San Jose, Calif.
Source
Friday, August 28, 2009
Lincoln ranks high for housing recovery potential
Nobody's going to confuse South Street with South Beach, but Lincoln and Miami do have at least one thing in common.
They are the two metropolitan areas most likely to see a housing recovery, according to Forbes magazine.
Forbes looked at 161 of the country's largest metropolitan areas, where sales have increased over the past year and where foreclosure sales are the lowest. The magazine used data from Zillow.com, an online housing data firm based in Seattle.
By that measure, Miami ranked No. 1, with sales up 27 percent over the past year and foreclosures making up 3.5 percent of sales. Lincoln was No. 2, with a 15 percent increase in sales and 3.6 percent of sales foreclosures.
Kevin Burklund, a Realtor with Woods Bros., said it doesn't surprise him at all to see Lincoln on the list.
"It's really more surprising that Miami's in there," Burklund said.
He said that with the $8,000 federal tax credit for first-time homebuyers, there is so much going on in the lower price ranges, agents are trying to drum up enough listings.
Rich Rodenburg, co-owner of Nebraska Home Sales, agreed that the credit has been the stimulus it was intended to be.
"We have buyers coming out of the woodwork," Rodenburg said.
As he spoke with a reporter, Rodenburg said he was writing an offer on a home for a first-time buyer. The people selling the home are having a new one built, he said.
"We are seeing the dominoes fall uphill," Rodenburg said.
The Forbes ranking is the second piece of national recognition the Lincoln housing market has gotten this summer.
In June, Cyberhomes.com named Lincoln the third-best market for first-time homebuyers.
The state as a whole also got recognition earlier this week from the National Association of Realtors, which said Nebraska was one of only five states where home sales increased more than 20 percent from the first quarter to the second quarter.
Realtors attribute the local success to houses that are priced reasonably, a relatively stable economy and continued low interest rates.
"It's a perfect storm for selling your house right now," Burklund said.
Source
They are the two metropolitan areas most likely to see a housing recovery, according to Forbes magazine.
Forbes looked at 161 of the country's largest metropolitan areas, where sales have increased over the past year and where foreclosure sales are the lowest. The magazine used data from Zillow.com, an online housing data firm based in Seattle.
By that measure, Miami ranked No. 1, with sales up 27 percent over the past year and foreclosures making up 3.5 percent of sales. Lincoln was No. 2, with a 15 percent increase in sales and 3.6 percent of sales foreclosures.
Kevin Burklund, a Realtor with Woods Bros., said it doesn't surprise him at all to see Lincoln on the list.
"It's really more surprising that Miami's in there," Burklund said.
He said that with the $8,000 federal tax credit for first-time homebuyers, there is so much going on in the lower price ranges, agents are trying to drum up enough listings.
Rich Rodenburg, co-owner of Nebraska Home Sales, agreed that the credit has been the stimulus it was intended to be.
"We have buyers coming out of the woodwork," Rodenburg said.
As he spoke with a reporter, Rodenburg said he was writing an offer on a home for a first-time buyer. The people selling the home are having a new one built, he said.
"We are seeing the dominoes fall uphill," Rodenburg said.
The Forbes ranking is the second piece of national recognition the Lincoln housing market has gotten this summer.
In June, Cyberhomes.com named Lincoln the third-best market for first-time homebuyers.
The state as a whole also got recognition earlier this week from the National Association of Realtors, which said Nebraska was one of only five states where home sales increased more than 20 percent from the first quarter to the second quarter.
Realtors attribute the local success to houses that are priced reasonably, a relatively stable economy and continued low interest rates.
"It's a perfect storm for selling your house right now," Burklund said.
Source
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