Perspectives Blog

What’s behind the weakness in U.S. housing?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | March 24, 2014

…onal mindset. I am not dismissing the weather effect, but do believe there are other headwinds, particularly for housing, that will not reverse in coming months. Housing has been key to the multi-year economic recovery and has served as an accelerator for growth. Poor weather often impacts homebuilding activity and homebuyer demand in certain areas, but existing home sales have been weak across all regions including western regions—and this weakn…

Missing links and multipliers

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | June 9, 2014

Several forces are colliding now and causing a downshift in the trajectory of the U.S. housing recovery. Household formations remain at multi-year lows due in large part to mediocre income and job gains in combination with high student loan debt by 25 – 45 year old homebuyers. Fewer homeowners mean missing multipliers for growth. As a result, housing will prove less of an accelerator for economic growth in the period ahead. Having witnessed a…

U.S. housing — A positive signal amidst the noise

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 29, 2014

While there has been a broad slowing in the last 15 months, the U.S. housing market has stabilized and started to recover. Homebuilders are catering to upscale buyers where financing is less of a constraint, and also building larger and more expensive homes. Housing has started to add to economic activity after stalling for the last few quarters, but the gain in traction will prove slow and sensitive to large shifts in interest rates. There ha…

Room to run

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 15, 2014

While the current U.S. business cycle is likely past its mid-point, its durability should not be measured by length alone. The tepid nature of the recovery has prevented the build-up of excesses that normally precede recessions. Because it will be some time before any imbalances build up to the point of excess and stymie the expansion, we believe this expansion has much further to run. The U.S. economy passed a milestone of sorts in August, in…

Half-time report on the U.S. consumer

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | July 28, 2014

…egories is health care (pharma and physician services), where real purchases are increasing about 2.5%, and also housing-related categories (furniture, building materials) which have climbed about 8% annually on the housing recovery. Consumption trends (real personal consumption expenditure) tend to be driven by the 87% share of non-durable goods and services purchases (Exhibit 1). Exhibit 1 Source: Bureau of Economic Analysis, May 2014 These di…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

Key investment professionals review the first half of 2014 and share their insights into what may be ahead for the second half of the year. Interest rates Zach Pandl, Portfolio manager and strategist Review: Government bond yields declined in early 2014, both in the U.S. and in other developed market economies. This surprising change in course after increases in 2013 caught many investors off guard. In our view, declining interest rates reflect…

Apparel retail doldrums

Mari Shor, Senior Equity Analyst | August 11, 2014

Since 2011, consumer spending has been below average overall, and spending on retail apparel has been especially poor. A host of factors, from shifting consumer priorities to poor inventory control have forced apparel retailers to compete on price, and sales and profitability have suffered dramatically. Premier global brands with differentiated product and strong, flexible supply chains are best positioned to manage through this challenging env…