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Sunday, November 08, 2009

Summary and a Look Ahead

by Calculated Risk on 11/08/2009 03:58:00 PM

On Monday, the Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices for October will probably be released. This survey was available for the FOMC meeting last week, and tight lending standards and weak loan demand is probably one of the reasons the FOMC expects economic activity "to remain weak for a time".

This will also be a busy week for Fed Speak. We might get somewhat different economic outlooks on Tuesday from San Francisco Fed President Dr. Janet Yellen in the morning and Dallas Fed President Richard Fisher in the evening.

Dr. Yellen will be the keynote speaker at the Lambda Alpha International Fall Real Estate Seminar in Phoenix. She is expected to discuss the economic outlook with an emphasis on real estate. In the evening, Richard Fisher will speak at the Headliners Club of Austin, Texas.

Last week on the economy:

  • ISM Manufacturing Index showed expansion in October, from the ISM: October 2009 Manufacturing ISM Report On Business®
  • ISM Service (Non-Manufacturing) also showed expansion in October, from ISM: October 2009 Non-Manufacturing ISM Report On Business®
  • Construction spending increased in September. Private residential construction spending was up, non-residential construction spending was down.
  • Light Vehicle Sales were as a 10.5 Million (SAAR) in October

    Vehicle Sales Click on graph for larger image in new window.

    This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for October (red, light vehicle sales of 10.46 million SAAR from AutoData Corp). This was the first month over a 10 million sales rate (SAAR) - excluding the cash-for-clunkers months of July and August - since December 2008.

  • The American Bankruptcy Institute reported: October Consumer Bankruptcy Filings Reach New Highs, Up 28 Percent Over Last Year

    non-business bankruptcy filingsThis graph shows the non-business bankruptcy filings by quarter.

    The quarterly rate is at about the same level as prior to when the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect. There were over 2 million bankruptcies filed in Calendar 2005 ahead of the law change.

    And on the employment report:
  • From David Leonhardt at the NY Times: Broader Measure of Unemployment Stands at 17.5%
  • Employment Report: 190K Jobs Lost, 10.2% Unemployment Rate

    Percent Job Losses During Recessions This graph shows the job losses from the start of the employment recession, in percentage terms (as opposed to the number of jobs lost).

    The current employment recession has seen the worst job losses since WWII, and is the 2nd worst in terms of the unemployment rate (only early '80s recession with a peak of 10.8 percent was worse).

  • Unemployment: Stress Tests, Unemployed over 26 Weeks, Diffusion Index
  • Employment-Population Ratio, Record Part Time Workers, Weak Holiday Hiring

    Seasonal Retail Hiring Here is a graph of seasonal retail hiring.

    Retailers only hired 63.5 thousand workers (NSA) net in October.

    This is essentially the same as in 2008 (59.1 thousand NSA), and suggests retailers are being very cautious with their seasonal hiring.

    And there were five more bank failures on Friday taking the total to 120 in 2009:
  • From the LA Times: United Commercial Bank is shut down, sold to East West Bancorp. Note: Not only did the FDIC DIF take an estimated $1.4 billion loss because of the failure of United Commercial Bank, but the TARP lost $299 million.
  • Unofficial Problem Bank List Grows to 505

    And a couple other stories of interest:
  • From Diana Golobay at HousingWire: FHA Delays Yearly Fiscal Report over ‘Accuracy’ of Methodology This raises the concern that the FHA will require a significant taxpayer bailout.
  • Fannie Mae: $18.9 Billion Loss, Requests Another $15 Billion

    Best wishes to all.