The economy: Relentless downward trend continues

President Barack Obama signed the economic stimulus bill and delivered a stirring challenge to Congress and the country on Feb. 24 aimed at turning things around while reforming healthcare and setting goals to reduce the national budget deficit, reduce dependence on imported energy and energizing education.

It’s still too soon to know if his ambitious leadership can stem the tide. Business headlines during the month of February were still a litany of bad news, while the stock market explored new lows and individual retirement accounts continued to wither:

Consumer Confidence Index plummets

The Conference Board’s Consumer Confidence Index plunged to 25 in February from a revised reading of 37.4 in January. The index has hit historic lows since September and February’s reading was the lowest since it began in 1967.

The index’s measure of future expectations about consumer sentiment also took a huge plunge, dropping to 27.5 in February from a reading of 42.5 the month before. More than 40 percent of the 5,000 households surveyed said they expect business conditions to worsen over the next six months. In January, 31 percent expected worsening conditions. The survey also showed 47 percent of consumers expect fewer jobs over the next six months, up from 37 percent the month before.

More jobs lost in January than any month since 1974

The U.S. unemployment rate rose to 7.6 percent in January as employers dismissed 598,000 workers, the most in any month since 1974. This raised the unemployment rate 0.4 percent, from 7.2 percent in December. It is now at its highest level since 1992.

January job losses were worse than the 524,000 economists predicted and job cuts in November and December also were deeper than initially reported. The Labor Department reported that factory workers lost 207,000 jobs in January, more than any month since October 1982. Meanwhile 111,000 construction jobs, 121,000 professional and business services jobs, 45,000 retail jobs and 28,000 leisure and hospitality jobs were eliminated. There were, however, small employment gains in education, health services and government.

Honolulu saw a jobless rate of 4.2 percent in December, down from 4.4 percent in November. According to the U.S. Bureau of Labor Statistics, the jobless rate in December 2007 was 2.5 percent. 19,300 people were out of work in Honolulu in December, compared to 11,200 a year ago.

A total of 237,900 American workers lost their jobs through mass layoffs in January. A mass layoff is defined as a single action by a single employer that causes at least 50 workers to lose their jobs. That figure was up 11,790 from the December total, according to the Bureau. The number of mass layoff events declined from month to month, even though the number of affected workers increased. The bureau counted 2,227 mass layoffs in January, compared to 2,275 in December.

Honolulu prices rose 4.3 percent in 2008

Inflation continues to pick the pockets of both the unemployed and those with jobs. Prices in Honolulu rose 4.3 percent in 2008, more than the national average of 3.8 percent. The increase was driven mostly by prices for gas, utilities and food in the first half of the year. In the last six months of 2008, Honolulu's inflation rate was 3.6 percent.

Housing costs rose more slowly than expected, up 3.1 percent from 2007, according to the U.S. Labor Department. From 2006 through 2007, they rose a staggering 7.2 percent. Gasoline prices were up 11.9 percent from the second half of 2007; utilities were up 29.5 percent; groceries rose 7.1 percent; meals out jumped 4.5 percent; recreation grew 1.8 percent; and education and communication jumped 3.5 percent.

Meanwhile, household furnishings were down .2 percent; clothing was down 1 percent; and (mercifully, perhaps) liquor prices fell 1.1 percent.  Click here for the full report.

Honolulu has second least-affordable housing among global urban markets

A recent survey indicates Honolulu has a severely unaffordable housing market, according to a recent survey. Among all major urban markets in the world, Honolulu ranks second only to Sunshine Coast in Australia, while Australia’s Gold Coast came in third.

Other unaffordable U.S. cities include San Francisco (sixth) and San Jose (seventh), according to the annual Demographia International Housing Affordability survey, which covers 265 markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States using data for the third quarter of 2008. The survey compares the median house prices to median household incomes to determine affordability. Youngstown, Ohio, has the most affordable housing market, followed by Fort Wayne and Evansville, Ind.