For sale signs are posted on a foreclosed house in Glendale, Calif.
For sale signs are posted on a foreclosed house in Glendale, Calif. - 
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Jeremy Hobson: The closely-watched Case-Shiller index of home prices is out this hour. And it says that in July, home prices inched up about a percent from June -- but were still down 4.1 percent from a year ago.

Juli Niemann is an analyst with Smith Moore and Company. She's with us live from St. Louis
as she is every Tuesday. Good morning.

Juli Niemann: Morning, Jeremy.

Hobson: So Juli, a bit of an inch up in July -- is that a glimmer of hope for the housing market?

Niemann: Not really, because the sale of new homes was down the fourth month in a row. It's just the summer selling season, and you're still down year-over-year over 4 percent. Two areas that were up -- Detroit, because you can buy a house there for the price of New York dinner; and DC -- well, there's just no shortage of people who travel the yellow brick road to Emerald City.

Hobson: Juli, I heard the President's former top economist Austan Goolsbee over the weekend on TV saying essentially, that we've got to stop waiting for the housing market to drag us out of the economic slump -- that we're gonig to have to focus on other things. What do you think of that?

Niemann: Well it's exactly right, because the consumer used their houses as an ATM over the last 15 years, leading up to this housing collapse. They took out equity, spent it on toys, games, prizes, vacations. Now incomes are flat, and debt is growing to dangerous levels. And you're going to continuously see this working it off. So the consumer can't bring us out of this mess. It's going to be manufacturing and exports -- machinery, farm equipment, earth-moving equipment, autos, aircraft, technology -- all of this enhances productivity.

But this is a long cycle. Now, arguably, you can say that it's healthier than the bubble-prone area, but it's going to take a long time to take us out. And the recovery is going to depend on our trading partners as well, and they're sliding into recession. But the dollar's likely to resume its slide. Once we get past this euro panic, that's going to make us competitive both in price and product quality, but it's a long cycle.

Hobson: Perfect transition, because that's where we're heading next. Juli Niemann, analyst with Smith Moore and Company, thanks so much.

Niemann: You bet.