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Labor Market Policy Research Reports, March 12-16, 2012 Print
Written by Marie-Eve Augier   
Friday, 16 March 2012 13:15

Below are reports on issues relating to labor-market policy released over the past week:


Center on Budget and Policy Priorities

TANF Weakening as a Safety Net for Poor Families
Danilo Trisi and LaDonna Pavetti, Ph.D.

President’s Budget Not Sufficient to Renew Rental Assistance Fully for Low-Income Households:

HUD Budget Also Includes Proposals that Could Cause Serious Hardship for Some of Nation’s Poorest People
Douglas Rice and Barbara Sar


National Employment Law Project

Testimony of Tsedeye Gebreselassie on A-2708:  Minimum Wage for Tipped Workers before the New Jersey Assembly Labor Committee
 
CPI Rose 0.4 Percent in February Print
Written by David Rosnick   
Friday, 16 March 2012 10:40

In the largest gain since last April, the Consumer Price Index rose 0.4 percent in February, according to the latest Bureau of Labor Statistics' reports on the consumer price, US import/export price and producer price indexes. The CPI has averaged an annualized rate of inflation of 2.5 percent over the last three months.  Last month’s bump was largely driven by energy prices, which rose 3.2 percent from January to February.  Excluding volatile food and energy prices, the core CPI rose 0.1 percent in the month and has grown at a 1.9 percent annualized rate since November.

Medical care services was unchanged in February, including the second consecutive fall in the price of professional medical services of 0.2 percent.  This is the first time that professional medical services has seen consecutive declines in price, and the 0.4 percent annualized rate of decline since November represents the first three-month fall on record.  The price of hospital services was flat last month.

For a more in-depth analysis, check out the latest Prices Byte.

 
Larry Summers: The Wrong Person for World Bank President Print
Written by Dean Baker   
Monday, 12 March 2012 15:28

Larry Summers is beginning to look more and more like the second incarnation of Richard Nixon. He just keeps coming back.

According to the rumor mills and betting lines, Summers is now the top contender for World Bank president. If track records mattered, Summers would be nowhere in contention.

Just looking at the economics (i.e. ignoring his stormy tenure as president of Harvard), Summers would not seem to be the sort of person who should be given another position of responsibility. In the 90s, Summers was a top advisor and eventually Treasury Secretary in the Clinton administration as it rushed full speed down the road of financial deregulation. He was among the loud voices dismissing then head of the Commodity Futures Trading Commission Brooksley Born’s concerns about unregulated derivatives.

Summers was also a central figure in the engineering of the bailout from the East Asian financial crisis. This bailout sent the dollar and the trade deficit soaring. The resulting build up of reserves by developing countries created the fundamental imbalance in the U.S. and world economy, which still has not been corrected.

Summers completely bought into the Great Moderation myth that Alan Greenspan had somehow ended economic instability for all time. At the famous Greenspanfest held at Jackson Hole in 2005, Summers derided the skeptics as financial “Luddites.”

Just as there was supposedly a new Dick Nixon running for president in 1968 there was supposedly a new Larry Summers who entered the Obama administration as head of the National Economic Council in 2009. Summers had supposedly learned his lessons and recognized that giving Wall Street complete free rein may not always be the best policy.

There is not much evidence of the new Larry Summers in the policy decisions of the Obama administration. While exactly who said what and when is hotly contested in the various accounts coming out now about the administration’s economic policy, the basic facts are not in dispute.

The administration left the financial sector largely intact. Huge too big to fail banks that were almost certainly insolvent (e.g. Citigroup and Bank of America) were nursed back to something resembling health with massive amounts of government assistance. The Obama administration blocked efforts to close or break up these behemoths.  

The Obama administration pushed through a stimulus package that was clearly too small to restore the economy to health and then began touting the green shoots of recovery and saying that deficit reduction would now be its priority. As a result, millions of workers are needlessly unemployed and unable to care properly for themselves or their families.

We may never know exactly how much of the blame for these failures should rest on Larry Summers’ shoulders, but it is hard to believe that the head of the National Economic Council, the person who is supposed to summarize all the relevant views for the president, doesn’t have some responsibility.

In short, Summers’ record as an economic adviser has provided a trail of disasters that few can match. Does it make sense to give him yet another opportunity to do even more damage?
 
Labor Market Policy Research Reports, March 5-9, 2012 Print
Written by Marie-Eve Augier   
Friday, 09 March 2012 15:20

Center for Economic and Policy Research

Long-term Hardship in the Labor Market
John Schmitt and Janelle Jones


Center on Budget and Policy Priorities

Incomes at the Top Rebounded in First Full Year of Recovery, New Analysis Of Tax Data Shows: Top 1 Percent’s Share Of Income Starting To Rise Again
Hannah Shaw and Chad Stone


Demos

Employment Credit Checks: The Case for Requiring Employers to Use More Accurate and Fair Assessments


Economic Policy Institute

Entry-Level Workers’ Wages Fell in Lost Decade
Lawrence Mishel


UCLA Institute for Research on Labor and Employment

California Crisis: The United States and California Two and a Half Years After the End of the Great Recession
Lauren D. Appelbaum

 
Jobs Day Print
Written by John Schmitt   
Friday, 09 March 2012 11:15

Justin Wolfers correctly tweets this morning that: “As unemployment falls, so will long-term joblessness.”

But, it could still take a very long time.

The labor-market categories that Janelle Jones and I have been focusing on in two recent reports – the long-term unemployed, discouraged workers, the marginally attached, and those part-time for economic reasons – have so far not responded much to job growth and the decline in the overall unemployment rate.

I was struck by these lines from the Bureau of Labor Statistics summary of today’s jobs report:

The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 5.4 million in February. These individuals accounted for 42.6 percent of the unemployed.

In February, 2.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier.

Among the marginally attached, there were 1.0 million discouraged workers in February, about the same as a year earlier.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.1 million in February.

You can read Dean Baker's take on the jobs numbers here.

 
Troika Greece Program Could Easily be Derailed by Smaller Bond Swap Print
Written by Juan Antonio Montecino   
Thursday, 08 March 2012 12:20

The deadline for Greece's bond swap, the so-called PSI (Private Sector Involvement), is approaching tonight (10 p.m. Greek time).  As part of Greece's latest bailout agreement with the European Central Bank, European Commission, and the IMF (the so-called Troika), Greece needs to achieve the near universal participation of private bondholders in a debt-restructuring plan to lower the face-value and interest rates on 206 billion euros of privately-held bonds.  

Under the terms of the bailout program Greece must reduce its debt to 121 percent of GDP by the year 2020, a level the Troika considers sustainable, and the upcoming bond deal is essential to reaching this target.  Under the official terms Greece has offered private bondholders, old bonds would be exchanged for new bonds with a face value of 46.5 percent of the original.  The new bonds would make annual coupon payments of 2 percent between 2012-15, 3 percent for 2016-20, 3.65 percent in 2021, and 4.3 in 2022-42.  

As reported today by Bloomberg, bondholders representing around 60 percent of all outstanding privately-held bonds have announced they will participate in the swap.  It remains to be seen how many more will accept the deal before the official deadline tonight but even if voluntary participation remains low Greece recently inserted collective action clauses into bonds that were issued under Greek law.  These stipulate that so-called holdouts, bondholders who refuse to accept the deal, can be forced to accept the terms of the swap if a large enough number of bondholders (usually a super majority) vote to participate.

Read more...

 

 
And the Struggle Continues… Print
Written by Janelle Jones   
Thursday, 08 March 2012 08:00

Here at CEPR we like to fight for the underdog, so as economic blogs are all aflutter over the recent string of positive numbers, we’d like to remind you that for many, the struggle continues. Since our recovery began in 2009, the unemployment rate, and especially the U-6 rate, which adds in the discouraged, marginally attached, and part-time for economic reasons, has remained stubbornly high. The persistence of these measures, along with the proportion of the labor force that has been unemployed for at least six months (LTU/(E+U)), can be seen in the figure below.

lth-2012-3-8-fig1

John Schmitt and I use these expanded measures to describe something we call “long-term hardship.” Looking specifically at the unemployment rate for the overall population, blacks, and Latinos, we can see that some are being left even further behind than others.

Read more...

 

 
Demographics of Long-Term Hardship Print
Written by John Schmitt and Janelle Jones   
Wednesday, 07 March 2012 16:00

In a new report out yesterday, we examine the demographics — gender, race, and age — of long-term hardship in the labor market. The report follows up on a paper (pdf) we did in January that made the case for looking beyond the standard “long-term unemployment” measure, to include the “discouraged,” the “marginally attached,” and the involuntarily part-time.

The new paper describes the people who are currently experiencing long-term hardship. While the economic recovery is on track for some, others are being left further behind. This chart, for example, shows the race and gender breakdown of the short-term unemployed (STU), the long-term unemployed (LTU), the unemployed and underemployed using the Bureau of Labor Statistics “U-6″ measure, and those not in the labor force (NILF).

lth-fig3-2012-03

Our main conclusion, from the paper:

…by whichever measure  –the standard long-term unemployment rate or an expanded “long-term hardship” measure…– the data … show that the burden of long-term joblessness is borne unevenly. Blacks and Latinos, less-educated workers, and younger workers are all much more likely to be unemployed, long-term unemployed,  “discouraged,” “marginally attached,” or involuntarily part-time, with terrible consequences for these groups’ current and future economic, social, and health outcomes.
 
Mitt Romney: the Candidate of Change? Print
Written by Dean Baker   
Wednesday, 07 March 2012 04:26

In 2008, then Senator Obama famously ran as the candidate of hope and change. If former Massachusetts Governor Mitt Romney ends up getting the Republican nomination he may be the candidate of change in 2012, but with a somewhat different meaning.

Last month, Governor Romney told reporters that he favored indexing the minimum wage to the rate of inflation, which would mean that it would automatically rise to keep pace with the cost of living. (He took the same position in January when asked a question by a staffer from the National Employment Law Project Action Fund.) If the minimum wage had been indexed to the consumer price index since its last increase in July of 2009, it would be $7.60 an hour today instead of $7.25. Furthermore, with inflation projected at roughly 2.0 percent a year over the next decade, indexing would translate into an annual increase of 15-16 cents an hour going forward. 

But that was last month. This week Governor Romney came out against increasing the minimum wage when he was interviewed on Larry Kudlow's show on CNBC. Romney told Kudlow:

"So, certainly, the level of inflation is something you should look at and you should identify what’s the right way to keep America competitive. So that would tell you that right now, there’s probably not a need to raise the minimum wage.”

The minimum wage is not the only economic issue on which it seems that Romney has changed his position. At the start of the health care debate in 2009, he urged President Obama to look to the Massachusetts reform he implemented as a model, including the use of mandates. He is currently taking a somewhat different position toward the plan that President Obama pushed through Congress, which is based on the Massachusetts plan.

 
Divergent Revolutions for Blacks, Latinos and Whites Print
Written by Janelle Jones   
Tuesday, 06 March 2012 16:15

This post originally appeared on the Council on Contemporary Families' website in response to the article "Is the Gender Revolution Over?"

As Cotter, Hermsen, and Vanneman argue, the extent of the gender revolution has been exaggerated. In the years between the passage of the Equal Pay Act in 1963 and 2010, the pay gap has closed at less than half-a-cent per year. Currently, women make about 75 percent as much as men.

Some racial groups, however, have experienced more closing of the gap. In 1980, black women earned 76 percent of what black men earned. By 1990, that had risen to 88 percent.  The rate of progress did slow in the 1990s, as Cotter et al found for women as a whole. Still, by 2010, black women made 92 percent as much as black men, which at first glance suggests more progress in gender equality among African-Americans.

Part of this greater convergence in wages is caused by a divergence in educational completion. In 1980, equal numbers (17 percent) of black men and women had a college degree or higher. Thirty years later, the percent of black women with a bachelor's or advanced degree had risen to 19 percent but dropped to 16 percent for men, which suggests that the progress of black men may have stalled more than the progress of black women.

Read more...

 

 
Brazil's GDP Slows, Weighed Down by Falling Manufacturing Print
Tuesday, 06 March 2012 15:35

Brazil’s GDP growth slowed dramatically in 2011, falling from 7.5 percent growth in 2010 to 2.7 percent last year. In the fourth quarter, it grew by just 1.4 percent on an annualized basis. This is actually an improvement over the third quarter, when GDP fell at an annual rate of 0.3 percent.

GDP growth in the fourth quarter was divided fairly evenly among industries, with one exception: manufacturing, which shrank at a 9.5 percent annualized rate. Over all of 2011, it has remained flat, growing just 0.1 percent over its 2010 level. But since June it has seen two quarters of consecutive negative growth and fallen to 5.7 percent below its pre-recession peak of 2008.

ladb-2012-03-06-blog

The sector with the best performance since the recession has been finance and insurance, which grew 3.9 percent in 2011 and is now 23.1 percent above its pre-recession peak.  This is a continuation of a long-term trend toward finance and away from manufacturing: over the last five years, overall GDP growth has averaged 4.2 percent per year, while the finance and insurance sector has averaged 9.8 percent and manufacturing has averaged just 1.8 percent growth annually.

For a more in-depth analysis, read our latest Latin America Data Byte.

 
Borderline Print
Written by John Schmitt   
Monday, 05 March 2012 16:45

Yesterday’s New York Times has a high-production-values piece on differences in the recent labor-market performance of France and Germany. Reporter Steven Erlanger, whose foreign reporting I’ve admired in other contexts, builds the story around a comparison of two small towns –Sélestat and Emmendingen– located on either side of the French-German border. Unfortunately, the side-by-side comparison is not well-situated in the available national data, and the story falls quickly into a “lazy Latins” versus “industrious Prussians” frame that gives a misleading picture of the economic problems facing France today.

Let’s take a closer look at one particularly problematic sentence that captures the core themes of the piece:

But while the French may admire German rigor, they are reluctant to make some of the same sacrifices, including longer hours and less job security.

So, the Germans are rigorous, make sacrifices, work long hours, and accept less job security; the French are reluctant, work less, and cling to their job security.

This may be the way folks on the ground tell the story, but we actually have a lot of reliable internationally comparable data that suggest this view is almost entirely wrong.

Read more...

 

 
Sachs' Candidacy Sets Stage for Public Debate Over World Bank Reform Print
Written by Dan Beeton   
Monday, 05 March 2012 10:15

CEPR Co-Director Mark Weisbrot last week issued a statement supporting  Jeffrey Sachs’ reform candidacy for the World Bank. "Reform" is the operative word here. It is the nature of Sachs’ candidacy – the changes he proposes for what the World Bank does, coupled with his undeniable credentials – that makes his candidacy “unprecedented” and important.

Sachs' candidacy sets the stage for a public debate over the issues that World Bank reform advocates consider most important, from poverty to climate change to the rights of communities affected by World Bank-funded projects to have a say in what happens to them and their environment. This is debate that all World Bank reformers should welcome.

What seems most important at this juncture is to have a competitive process – an actual presidential race of sorts. The fact that a candidate with the experience and skills that Sachs has could "run," quite publicly, with his desire for the presidency well known to everyone, and still be passed up in the end in an arbitrary, secretive decision by the White House would only highlight the utterly undemocratic nature of World Bank governance. The U.S. has effective veto power, and one of its traditional privileges has been the power to choose the World Bank president. The European members get to choose the Managing Director of the equally undemocratic IMF.

Of course it is high time, after over 60 years of American World Bank presidents, for the world to take seriously the idea that the President of the World Bank could come from the developing world.  Such candidates should also put their candidacy forward. A "crowded field" is nothing to fear here – the more ideas for what could and should be done to reform the Bank, the better. The more candidates that show what qualifications could be possible in a World Bank president, the better. All of these will only demonstrate what has been lacking in World Bank chiefs so far – and what is likely to be lacking in them, if the White House and G20 governments opt for "business as usual."

But if the Obama Administration plans to keep with past precedent and again choose an American, then Sachs is one American well qualified for the job, and one who has a chance to bring "change we can believe in."

This post originally appeared on WorldBankPresident.org.

 
Should Presidential Candidates Be Afraid to Talk about Declining Mobility and Growing Inequality? Print
Written by Shawn Fremstad and John Schmitt   
Monday, 05 March 2012 09:30

In two previous posts, John Schmitt and I discussed social science evidence supporting the argument, made most recently in the Economic Report of the President, that rising inequality in the United States is linked with reduced economic mobility.  One of the more, um, interesting arguments made by Scott Winship is that by making this connection the President will "talk down the economy." Winship, in recent Senate testimony, says he "worr[ies] that interest from one side in framing this year's presidential and senate campaigns around overdrawn themes of inequality and diminished opportunity for the middle class will affect perceptions of the economy's strength."

I'd argue that a bigger worry for presidential candidates is whether they are taking the public's very real and growing concern about inequality and mobility seriously. In a May 2011 Gallup poll, a majority of Americans (55 percent) said it was very/somewhat unlikely that "today's youth will have a better life than their parents." This is the highest percentage on record (and the first majority) answering this way since Gallup started asking the question in 1983.

It's notable this all-time high in pessimism about young people's economic future was recorded half a year before the President's moderately populist Osawatomie speech in which he raised the connection between inequality and declining mobility for the first time. So, the President was giving voice to a majority perception of diminished opportunity.  (Also worth noting, consumer confidence has trended steadily upward since the Osawatomie, which suggests that real day-to-day economic events affect perceptions of the economy's strength more than political campaigns.)

 
Labor Market Policy Research Reports, Feb. 27 - March 2, 2012 Print
Written by Marie-Eve Augier   
Friday, 02 March 2012 15:00

This week, we post links to reports from CEPR and CBPP.


Center for Economic and Policy Research

It's So Hard to Get Good Help
Dean Baker


Center on Budget and Policy Priorities

Are The Size And Reach Of The Federal Government Exploding? Non-Interest Spending Outside Social Security and Medicare Will Fall Well Below Prior 50-Year Average as Economy Recovers
Richard Kogan and Robert Greenstein

Can Governor Romney’s Tax Plan Meet Its Stated Revenue, Deficit, And Distributional Goals at the Same Time?
Robert Greenstein, Chye-Ching Huang, and Chuck Marr

 
More on the Recent Past and Near Future of Economic Mobility Print
Written by Shawn Fremstad and John Schmitt   
Friday, 02 March 2012 10:00

In a post yesterday, we noted that the growing disparity in college completion provides support for the view that increasing inequality has reduced economic mobility. Bhashkar Mazumder, a senior economist at the Chicago Federal Reserve, makes a similar point in a new article, Is Intergenerational Economic Mobility Lower Now than in the Past?, published as a Chicago Fed Letter. Here’s Mazumder’s summary of the trend:

After staying relatively stable for several decades, intergenerational mobility appears to have declined sharply at some point between 1980 and 1990, a period in which both income inequality and the economic returns to education rose sharply. This finding is also consistent with theoretical models of intergenerational mobility that emphasize the role of human capital formation. There is fairly consistent evidence that intergenerational mobility has stayed roughly constant since 1990 but remains below the rates of mobility experienced from 1950 to 1980. 

And here’s his prediction for mobility going forward:

Although we cannot say with any certainty how much mobility today’s children will experience over the coming decades, recent research suggests cause for concern. The gap in children’s academic performance between high- and low-income families has widened significantly over the last few decades. If this trend persists, it would point to reduced intergenerational economic mobility going forward.

That said, reducing educational disparities is only part of the solution to increasing mobility, and it’s a long-term solution at that. Our biggest problem right now is that we’ve been producing too many poorly compensated jobs and too few good ones. Increasing compensation for workers in these jobs—through policy reforms like increasing the minimum wage, enforcing and strengthening labor laws, and making paid sick leave a basic right—would increase mobility. 

 
Unequal Access to Education and the Gatsby Curve Print
Written by John Schmitt and Shawn Fremstad   
Thursday, 01 March 2012 09:45

The central issue in the furor that erupted a few weeks back over the "Gatsby Curve" was whether or not the sharp increase in inequality over the last three decades has depressed economic mobility. President Obama, the chair of his Council of Economic Advisers, and most of the leading experts in the field argue that today's extreme inequality is not only bad in itself, but it also lowers economic mobility. Brookings Institution fellow Scott Winship, however, says mobility is no worse today than it was earlier in recent economic history.

Winship's critique of the standard view on declining mobility centers on what he sees as limitations in the available data and problems with the statistical techniques used by economists analyzing the recent trends. At this point, quite a few people have offered responses to Winship's technical concerns (including one of us (pdf) at a recent event sponsored by the New America Foundation). But, most of this recent debate has been confined to a fairly narrow (and generally technical) discussion of Winship's criticisms of the way surveys capture, and the way economists model, income.

A recent paper (pdf) by Martha Bailey and Susan Dynarski, however, allows us to completely sidestep Winship's concerns about measuring income across generations. Bailey and Dynarski analyze college completion rates over time and find a disturbing pattern that provides strong support for the view that economic mobility has declined substantially over the last three decades.

Read more...

 

 
Financial Speculation Taxes and the London Stock Exchange Print
Written by Dean Baker   
Wednesday, 29 February 2012 17:07

Those who like to argue that financial speculation taxes are not possible or won't raise any money always have a difficult time when the topic of the London stock exchange comes up. The problem is that the London stock exchange has imposed a tax on stock trades for centuries. For the last quarter century it has been set at 0.5 percent on a trade (0.25 percent on both the buyer and the seller), before 1986 it had been 1.0 percent of the value of the trade.

In spite of this tax the London stock exchange continues to be one of the largest in the world, thumbing its nose at those knowledgeable finance types who insist that all trading would just migrate elsewhere in response to much smaller taxes. The UK government also raises a considerable amount of money through this tax. Annual revenue runs between 0.2-0.3 percent of GDP, which would come to $30-$40 billion a year in the United States. This is real money even in Washington.

For the most part, movements in the London stock exchange index have tracked reasonably well movements in the S&P 500, but for the last four years, it looks at the main London index was considerably less volatile. There are many factors that might explain the greater volatility of S&P 500 in this period, other than the financial transactions tax, but it is still striking to note the difference.

Click to Enlarge

5yr-FTSE-SP

Source: Yahoo! Finance.

 
CEPR News February 2012 Print
Written by Dawn Lobell   
Wednesday, 29 February 2012 16:00

The following highlights CEPR's latest research, publications, events and much more.

CEPR on Greece

Two days after the Greek government and European authorities announced a new €130 billion bail-out agreement, CEPR released a paper that looks at Greece's experience with “internal devaluation” and finds there's a high risk of continued prolonged recession. The paper, “More Pain, No Gain for Greece: Is the Euro Worth the Costs of Pro-Cyclical Fiscal Policy and Internal Devaluation?” by Co-Director Mark Weisbrot and Research Assistant Juan Antonio Montecino, argues that Greece should consider default and an exit from the euro.  “The IMF has consistently underestimated the depth of the Greek recession,” said Mark. Referring to the program of ongoing austerity being pushed on the Greek people by the “troika” (the European Central Bank, the European Commission, and the IMF), Mark said, “At some point, it becomes rational for Greeks to ask, is the euro worth this kind of punishment?”

The paper was cited at length by the London Telegraph (UK) which stated, “Unlike the troika’s messy efforts, the CEPR’s arguments are clear and compelling.” Mark was quoted in stories on ABC News.com and CNN.com and this report by the Associated Press, which appeared in dozens of U.S. newspapers. Mark was also interviewed about the Greek crisis by the BBC News and the radio show “This is Hell” out of WNUR (Chicago).

The paper also received a great deal of attention in Greece, where it was the focus of a much reprinted article in leading business daily IMERISIA as well as in other European countries.

CEPR has been writing on the eurozone crisis for two years, as CEPR Co-director Dean Baker mentions in this article for Al Jazeera English. In the article, Dean notes that people in Greece and other peripheral European countries must “wake up to the fact that they are not dealing with reasonable people on the other side of the negotiating table.” Mark noted that the ongoing eurozone crisis is affecting the U.S. as well as the European economy, and could present a significant challenge to President Obama’s reelection hopes if it continues to worsen, in a column for U.S. News and World Report. Mark was also interviewed at length about the eurozone crisis by the New Left Project.

Read more...

 

 
Home Sales Improve in January But Drag on Market Remains Print
Written by Dean Baker   
Tuesday, 28 February 2012 11:00

The pending home sales index for January had the highest reading since April of 2010, when the first-time homebuyers tax credit expired. Sales in the South were especially strong, up by more than 10 percent from year-ago levels. New and existing home sales also have shown a similar upward trend, and inventories of both have fallen to a more normal range of close to six months of sales. At the trough of the downturn, the range was near 10 months of sales.

But these positive signs must be viewed with some caution. Monthly data are always erratic, especially in the winter months when weather can be a very important factor. In the case of this winter, an unusually mild January likely boosted sales in the Midwest and Northeast. More importantly, though, the sources of long-term drag on the housing market remain. Despite some improvement in the job market and an increasing willingness by lenders to allow modifications and/or refinancing, we are still likely to see more than 900,000 foreclosures in both 2012 and 2013.

For a more in-depth analysis, see the latest Housing Market Monitor.

 
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