Good News - Last month consumer prices fell by the largest amount on record, going back 61 years. (Airline prices fell by 4 percent!) The overall slide in prices reflects the big drop in energy costs in recent months. After hitting a record at $147 per barrel in mid-July, crude oil has fallen by $100 per barrel since then, pushing down the price of gasoline from a record $4.11 per gallon in July to $1.34 in the most recent Energy Department survey. You have to love half price gas!
Bad News – Falling prices for goods and services might sound like a good thing for consumers, but it can hurt the economy. During periods of deflation, companies earning less react by slowing production and cutting jobs, which can cause consumers to spend less. It's a dangerous circle.
Bad News - New building permits plummeted 15.6 percent to 616,000 units from 730,000 units in October. That was much below Wall Street analyst estimates of 700,000. This is an indicator of how the economy is doing; lots of building usually indicates a good economy.
Good News - In the long run, the slow down in new home construction could help U.S. housing market prices recover. Less new homes means less homes on the market, and inventory needs to shrink for housing prices to recover.
Bad News – Private lenders have stopped offering loans that require zero money down. They are worried, and rightly so, that borrowers without equity are more likely to let their homes fall into foreclosure. Next year, the FHA will require a minimum 3.5% down payment on all new loans, up from 3%, and private lenders often require a minimum 5% down payment.
Good News – USDA loans are still allowing people to put zero money down. To be eligible for a USDA-backed loan, a borrower can't have income that exceeds 115% of the median county income, and the loans are restricted to areas with lower population density -- usually towns of no more than 25,000 residents. So there are many towns just outside of Lancaster City where this would apply.
Bad News – Its snowy and cold here in Lancaster, PA; and not even winter yet. I don’t really enjoy any of those things, I much prefer warm sunny weather.
Good News – My kids love playing in the snow. We are safe and warm in our house(thanks, pellet stove). We have plenty of food to eat, our businesses are doing well, and we are all healthy. It doesn’t get much better than that! (unless we were all on a warm beach somewhere ;)
In all forms of media we hear plenty of bad news, and some good news. Which one do you focus on? We know the media always picks the negative one because it gets ratings. And don’t get me wrong, I am a realist. But today I've decided keep my perspective on what is really important in life and count my blessings.