Conversely, an upward trend supports home ownership over renting. The trend for home ownership is down. Millennials, those born between 1980 and the early 2000s, are waiting longer before buying their first home. (Rent Jungle, 2015) For them, purchasing a home represents a much higher cost relative to income than it did in years past. To illustrate this point, in the 1970s, the cost of a house represented about 1.7 percent of annual income; today that figure is at almost 3 percent.
Unfilled orders fell .8%, marking a third-consecutive month of decline. Industries are softening up as durable goods orders fall below expectations, and it may continue to struggle if companies are reluctant to increase capital spending. There is growth nonetheless, but the rest of the year may yield below expected levels if the factory sector cannot recover. The US economic growth may be slowing as consumer spending slowed to a more moderate pace. According to the Commerce Department, the total value of goods and services slowed to 2.3% with a previous rate of 1.8% last year.
What are the main reasons as to why this recovery has been so lackluster? The first reason is that the 2007-2009 recession was caused by the housing bubble and the collapse of the housing industry, which normally kick-starts recovery. After the 2007-2009 recession, since the housing prices are unlikely to return to previous levels, the economy is taking longer to recover. The second reason is that globalization has caused domestic employment to rise slower than if all the increase in employment goes to domestic hiring. (Joel, 2013) Compared to the past, we have more imports than exports (Olney, 2013); as the economy recovers, a greater part of the increase in GDP goes to foreign economies instead of our own.
The biggest decline was seen is accounts payable which decreased by $170,500 to $230,000, a decline of 42.6 %. Activity: The inventory turnover is almost half compared to the industry average, although it managed to increase by 0.3 compared to 2002. The company needs to maintain a constant cost of goods sold and at the same time manage inventory more efficiently to maintain market competitiveness. The average collection period also increased slightly to 58 days, three days increase compared to 2002. The company needs to negotiate or persuade on efficient payment methods to customers to decrease the collection period down to industry average.
During the week the market was exposed to a number of economic data points which ultimately helped drive equities marginally higher for the week. On Monday we received October consumer credit which came in better than expected at down $3.5 billion, compared to a revised -$8.8 billion in the prior period and better than forecast estimates of -$9.4 billion. While the head line number looks encouraging, implying consumer credit constrictions are easing, one needs to look at the breakdown between revolving and non-revolving. The revolving debt revolving, which is the type of credit consumers use to buy everything but homes and autos, actually fell by $9.9 billion compared to -$10.1 billion in the prior period. It was the non-revolving debt that is used in buying homes and autos, which fell at -$4.9 billion compared to an increase of $0.2 billion in the prior period.
That is an overwhelming increase of over three trillion dollars. This country has also seen an explosion of debt at the household level. Some people have suggested that our higher standard of living is actually because of debt, rather than from higher wages. The American dream has become ‘borrow money, spend money, and hope to repay tomorrow.’ In fact, the average American worker’s wages have been stagnant for the last six years. Their paychecks reflect a simple increase of only ten dollars per week, after consumer inflation has been taken into account.
Between the end of World War II and the late 1970s, income inequality in the U.S. was reduced; but since 1970s, the situation with wealth distribution has changed. Data from tax returns in 1976 show that the top 1 percent of households received 8.9 percent of all pre-tax income. In 2008, the top 1 percent’s share had more than doubled to 21.0 percent. Source: “Income Inequality.” (n.d.) In the years from 1979 to 2009, the top 5 percent witnessed large increases in income, while the lowest-income fifth saw a decrease in real income. Source: “Income Inequality.” (n.d.) Between 2009 and 2012, income gains by the top one percent increased by over 30 pe... ... middle of paper ... ...nited States has been changing over the time.
Notably, its share price has dropped 43% just in the last year, after the publication of the year losses of €6.8 billion (remarkably €2.8 billion more than the losses of 2008) . The ROE for the bank passed from 7.89% in 2010 to minus -9.02% at the end of 2015. Based on the figures in the latest interim report in July 2016 the ratio decreased further to -11.52% in June . Considering this trend, we need to take into account also that in recent years, the ROE was consistently below the cost of capital, eroding value. A company can increase its ROE in 2 ways: increasing the numerator - raising your net income - or decreasing the denominator – the equity capital.
Factors Causing House Prices to Rise Is a Boom in the Housing Market Beneficial? Generally speaking, over the past 10 or so years, prices in the housing market have been rising. Between 1985 and 1989 the housing market was rising at a rapid rate, with two consecutive years having a 20% increase on the previous year. However, 1990 saw an incredibly large decline in the prices in the housing market, percentage change went from a 35% increase on the previous year to 0%. Between 1990 and 1995 house prices were no longer rising.
Most people are in debt, in late 2005 “wage growth was shortchanged because 46 percent of the growth of total income in the corporate sector was distributed as corporate profits, far more than 20 percent in previous periods.”(24) Household income had fallen five years in a row and was 4 percent lower. The average wages of Americans are low. The growth of the American population is expanding very rapidly; the job count compared to population growth is almost unrealistic. Only one point nine percent more jobs have come up since the beginning of the last recession. The unemployment rate is four point six percent That means that a lot of people do not have jobs; the percent of people that have a job was one point three percent, So that means that more people are not working than people with a job.