by Bill McBride on 1/17/2010 01:00:00 PM
Sunday, January 17, 2010
The last half of every month is filled with real estate related data, and this week the NAHB Housing Market Index (builder confidence for January) will be released on Tuesday, Housing Starts for December and the ABI Architecture Billings Index on Wednesday, and the Moodys/REAL Commercial Property Price Index for November will be released sometime this week.
Expectations are for housing starts to be essentially flat in December, from MarketWatch:
The consensus forecast of economists surveyed by MarketWatch calls for a 3% decline in starts to a seasonally adjusted rate of 555,000 from 574,000 in November.In other economic news, the Producer Price Index will be released on Wednesday, the Philly Fed survey on Thursday, and the DOT's estimate of vehicle miles for November will be released this week.
The markets will be closed on Monday for Martin Luther King Jr. day.
And a summary of last week ...
Click on graph for larger image in new window.
This following graph shows job openings (yellow line), hires (purple Line), Quits (light blue bars) and Layoff, Discharges and other (red bars) from the JOLTS. Red and light blue added together equals total separations.
Notice that hires (purple line) and separations (red and light blue together) are pretty close each month. When the purple line is above total separations, the economy is adding net jobs, when the blue line is below total separations, the economy is losing net jobs.
According to the JOLTS report, there were 4.176 million hires in November, and 4.340 million separations, or 164 thousand net jobs lost. The comparable CES report showed a gain of 4 thousand jobs in November (after revisions).
The following data is from Amherst Securities:
This chart shows the expected payment shock coming in 2010 and 2011 from Option ARMs. This chart includes projected increases in LIBOR (if LIBOR stays low, the shock will not be as high), and the recast due to reamortizing the loan over the remaining period.
For more details, see: Option ARM Recast Update and More on Option ARMs
On negative equity, this graph from Amherst shows the CLTV for various mortgage products. Note that subprime and Alt-A had a somewhat higher percent of borrowers with negative equity than prime - but Option ARMs (red) borrowers are mostly in negative equity!
As Laurie Goodman at Amherst Securities noted, Option ARM borrowers were a self selecting group (people stretching to buy homes) and that is why most have negative equity in their homes.
Industrial Production, Capacity Utilization Increase in December
This graph shows Capacity Utilization. This series is up from the record low set in June (the series starts in 1967), and still below the level of last year.
Note: y-axis doesn't start at zero to better show the change.
Industrial production is still 10.7% below the level of December 2007.
Here is the report from the Fed: Industrial production and Capacity Utilization
This graph shows the monthly U.S. exports and imports in dollars through November 2009.
Both imports and exports increased in November. On a year-over-year basis, exports are off 2.3% and imports are off 5.5%.
Overall trade continues to increase, although both imports and exports are still off significantly from the pre-financial crisis levels. Net export growth had been one of the positives for the U.S. economy - but now imports are growing faster than exports.
Here is the Census Bureau report on trade.
Best wishes to all. My thoughts are with the people of Haiti.