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Showing posts with label Weekly Summary. Show all posts
Showing posts with label Weekly Summary. Show all posts

Sunday, February 06, 2011

Summary for Week ending February 5th

by Calculated Risk on 2/06/2011 08:50:00 AM

Note: here is the economic schedule for the coming week.

Two ongoing stories ...
• Egypt: From the NY Times: Muslim Brotherhood Join Egypt Talks

As Western powers backed the Egyptian vice president’s [Omar Suleiman] attempt to defuse a popular uprising, the outlawed Muslim Brotherhood joined other groups meeting with him on Sunday in what seemed a significant departure in the nation’s uprising and political history.
• Europe: From the WSJ: European Leaders Clash at Summit
Sharp disagreements opened up among European Union leaders at a summit here over a German-led plan to boost the competitiveness of weaker euro-zone economies, threatening to unsettle recently calm European financial markets.
Below is a summary of the previous week, mostly in graphs.

January Employment Report: 36,000 Jobs, 9.0% Unemployment Rate

The Employment Situation report contained mixed signals with a sharp drop in the unemployment, but few payroll jobs added. The BLS mentioned that severe weather impacted the payroll report. The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Employment Pop Ratio, participation and unemployment rates Click on graph for larger image in graph gallery.

The unemployment rate decreased to 9.0% (red line).

The Labor Force Participation Rate declined to 64.2% in January (blue line). This is the lowest level since the early '80s. (This is the percentage of the working age population in the labor force. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years.)

The Employment-Population ratio increased to 58.4% in January (black line).

Percent Job Losses During Recessions The second graph shows the job losses from the start of the employment recession, in percentage terms from the start of the recession. The dotted line is ex-Census hiring.

For the current employment recession, the graph starts in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse).

Part Time WorkersThe number of workers only able to find part time jobs (or have had their hours cut for economic reasons) declined to 8.407 million in January.

These workers are included in the alternate measure of labor underutilization (U-6) that declined sharply to 16.1% in January from 16.7% in December. Still very high, but improving.

Unemployed Over 26 Weeks This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 6.21 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 6.44 million in December. This is still very high.

Summary

This was a decent report with two obvious exceptions: the few payroll jobs added, and the slight decline in the average workweek - both potentially weather related.

The best news was the decline in the unemployment rate to 9.0% from 9.4% in December. However this was partially because the participation rate declined to 64.2% - a new cycle low, and the lowest level since the early '80s.

The 36,000 payroll jobs added was far below expectations of 150,000 jobs, however this was probably impacted by bad weather during the survey reference period. If so, there should be a strong bounce back in the February report.

Q4 2010: Homeownership Rate Falls to 1998 Levels

The Census Bureau reported the homeownership and vacancy rates for Q4 2010 this week.

Homeownership RateThe homeownership rate was at 66.5%, down from 66.9% in Q3. This is at about the level as 1998.

The homeownership rate increased in the '90s and early '00s because of changes in demographics and "innovations" in mortgage lending. Some of the increase due to demographics (older population) will probably stick, so I've been expecting the rate to decline to around 66%, and probably not all the way back to 64%.

Homeowner Vacancy RateThe homeowner vacancy rate increased to 2.7% in Q4 2010 from 2.5% in Q3 2010.

This has been bouncing around in the 2.5% to 2.7% range for two years, and is slightly below the peak of 2.9% in 2008.

A normal rate for recent years appears to be about 1.7%.

Rental Vacancy RateThe rental vacancy rate declined sharply to 9.4% in Q4 2010, from 10.3% in Q3 2010.

This fits with the recent Reis data showing apartment vacancy rates fell in Q4 2010 to 6.6%, down from 7.1% in Q3 2010, and 8% in the Q4 2009.

This also fits with the NMHC apartment market tightness index that has indicated tighter market conditions for the last four quarters.

ISM Manufacturing Index increased in January

ISM PMI PMI at 60.8% in January, up from 58.5% in December. The consensus was for a reading of 57.9%. ISM's New Orders Index registered 67.8 percent in January, and ISM's Employment Index registered 61.7 percent. Here is a long term graph of the ISM manufacturing index.

This was a strong report and above expectations. The new orders and employment indexes were especially strong.

Private Construction Spending decreased in December

Private Construction Spending This graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.

Both private residential and non-residential construction spending decreased in December.

Residential spending is 66.5% below the peak in early 2006, and non-residential spending is 37% below the peak in January 2008.

Sometime this year (in 2011), residential construction spending will probably pass non-residential spending. Although I expect the recovery in residential spending to be sluggish, residential investment will probably make a positive contribution to GDP and employment growth in 2011 for the first time since 2005. And that is one of the reasons I think growth (both GDP and employment) will be better in 2011 than in 2010.

U.S. Light Vehicle Sales increased in January to 12.62 million SAAR

Vehicle Sales Based on an estimate from Autodata Corp, light vehicle sales were at a 12.62 million SAAR in January. That is up 17.5% from January 2010, and up 1.0% from the sales rate last month (Dec 2010). This is the highest sales rate since August 2008, excluding Cash-for-clunkers in August 2009. This was at the consensus estimate of 12.6 million SAAR.

This graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate. The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

ISM Non-Manufacturing Index showed expansion in January

ISM Non-Manufacturing Index The January ISM Non-manufacturing index was at 59.4%, up from 57.1% in December. The employment index showed faster expansion in December at 54.5%, up from 52.6% in December. Note: Above 50 indicates expansion, below 50 contraction.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

Other Economic Stories ...
Chicago PMI Strong
• Fed: Little Change in Lending Standards in January Loan Officer Survey, Outlook "more upbeat"
Personal Income and Outlays Report for December
Restaurant Performance Index Shows Expansion in December
• ADP: Private Employment increased by 187,000 in January
• Fed Chairman Bernanke: The Economic Outlook and Macroeconomic Policies
Unofficial Problem Bank list at 946 Institutions

Best wishes to all!

Sunday, January 09, 2011

Summary for Week ending January 8th

by Calculated Risk on 1/09/2011 09:08:00 AM

Note: here is the economic Schedule for Week of January 9th.

Below is a summary of the previous week, mostly in graphs.

December Employment Report: 103,000 Jobs, 9.4% Unemployment Rate

The BLS reported that payroll employment increased by 103,000 in December, and the unemployment rate declined to 9.4 percent.

Employment Pop Ratio, participation and unemployment rates Click on graph for larger image.

This graph shows the employment population ratio, the participation rate, and the unemployment rate. The unemployment rate decreased to 9.4% (red line).

The Labor Force Participation Rate declined to 64.3% in December (blue line). The Employment-Population ratio increased to 58.3% in December (black line).

Percent Job Losses During Recessions The second graph shows the job losses from the start of the employment recession, in percentage terms aligned at maximum job losses. The dotted line is ex-Census hiring.

The best news was the decline in the unemployment rate to 9.4% from 9.8% in November. However this was partially because the participation rate declined to 64.3% - a new cycle low, and the lowest level since the early '80s. Note: This is the percentage of the working age population in the labor force.

The 103,000 payroll jobs added was below expectations of 140,000 jobs, however payroll for October payroll was revised up 38,000 and November was revised up 32,000 for a total of 70,000.

The increase in the long term unemployed, and the high level of part time workers for economic reasons are ongoing concerns. The average workweek was steady at 34.3 hours, and average hourly earnings ticked up 3 cents.

U.S. Light Vehicle Sales at 12.55 million SAAR in December

Vehicle Sales Based on an estimate from Autodata Corp, light vehicle sales were at a 12.55 million SAAR in December. That is up 13.1% from December 2009, and up 2.7% from the November 2010 sales rate.

This graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate. The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

This was above most forecasts of around 12.3 million SAAR.

ISM Manufacturing Index increases in December

ISM PMI The Institute for Supply Management reported the PMI was at 57.0% in December, up slightly from 56.6% in November.

Here is a long term graph of the ISM manufacturing index.

This was slightly below expectations and in line with the regional Fed manufacturing surveys.

ISM Non-Manufacturing Index showed expansion in December

ISM Non-Manufacturing IndexThe December ISM Non-manufacturing index was at 57.1%, up from 55.0% in November - and above expectations of 55.5%. The employment index showed slower expansion in December at 50.5%, down from 52.7% in November. Note: Above 50 indicates expansion, below 50 contraction.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

Private Construction Spending increased in November

Private Construction Spending The Census Bureau reported overall construction spending increased in November compared to October. "[C]onstruction spending during November 2010 was estimated at a seasonally adjusted annual rate of $810.2 billion, 0.4 percent (±1.6%)* above the revised October estimate of $806.7 billion."

Private construction spending also increased in November: "Spending on private construction was at a seasonally adjusted annual rate of $491.8 billion, 0.3 percent (±1.1%)* above the revised October estimate of $490.5 billion."

This graph shows private residential and nonresidential construction spending since 1993. Private residential spending increased in November; private non-residential construction spending is still declining.

Sometime this year (in 2011), residential construction spending will probably pass non-residential spending. Although I expect the recovery in residential spending to be sluggish, Residential investment will probably make a positive contribution to GDP growth in 2011 for the first time since 2005.

Other Economic Stories ...
• From Bloomberg: Banks Lose Pivotal Massachusetts Foreclosure Case
• From Alejandro Lazo at the LA Times: Housing bust creates new kind of declining city
• Reis: Apartment Vacancy Rates decline in Q4
• Reis: Strip Mall Vacancy rates steady in Q4
• Reis: Office Vacancy Rate steady in Q4
• From the American Bankruptcy Institute: Consumer Bankruptcy Filings increase 9 percent in 2010
• ADP: Private Employment increased by 297,000 in December
Restaurant Performance Index slips in November
Unofficial Problem Bank list increases at 932 Institutions

Best wishes to all!

Sunday, January 02, 2011

Summary for Week ending January 1st

by Calculated Risk on 1/02/2011 08:55:00 AM

Note: here is the economic Schedule for Week of January 2, 2011.

Below is a summary of the previous week, mostly in graphs.

Case-Shiller: Home Prices Weaken Further in October

S&P/Case-Shiller released the monthly Home Price Indices for October last week (actually a 3 month average of August, September and October).

Case-Shiller House Prices Indices Click on graph for larger image in graph gallery.

The first graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 30.7% from the peak, and down 0.9% in October(SA).

The Composite 20 index is off 30.5% from the peak, and down 1.0% in October (SA).

The next graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Case-Shiller Price Declines Prices increased in only 2 of the 20 Case-Shiller cities in October seasonally adjusted (SA); only Denver and Wash, D.C. saw small price increases (SA). Prices fell in all cities NSA.

Prices in Las Vegas are off 57.8% from the peak, and prices in Dallas only off 8.6% from the peak.

Prices are now falling - and falling just about everywhere. As S&P noted "six markets – Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices started to fall in 2006 and 2007". More cities will join them soon.

House Prices and Months-of-Supply This graph shows existing home months-of-supply (left axis), and the annualized change in the Case-Shiller composite 20 house price index (right axis, inverted).

House prices are through October using the composite 20 index. Months-of-supply is through November.

We need to watch inventory and months-of-supply closely for hints about house prices. The recent surge in existing home inventory - and increase in the months-of-supply - is one of the reasons I expect house prices to fall another 5% to 10%.

Weekly Initial Unemployment Claims below 400,000, Lowest since July 2008

From the DOL: "In the week ending Dec. 25, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 34,000 from the previous week's revised figure of 422,000."

Weekly Unemployment Claims This graph shows the 4-week moving average of weekly claims since January 2000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week by 12,500 to 414,000.

In general the four-week moving average has been declining and that is good news.

Regional Fed surveys suggest increasing manufacturing activity

Three regional surveys were released last week:
1) From the Dallas Fed: Texas Manufacturing Activity Continues to Grow
2) From Kansas City Fed: Manufacturing activity "continued at a solid pace" in December
3) From the Richmond Fed: Manufacturing Activity Expanded at a Solid Pace in December

Fed Manufacturing Surveys and ISM PMIThis graph compares the regional Fed surveys and the ISM manufacturing index.

The New York and Philly Fed surveys are averaged together (dashed green, through December), and averaged five Fed surveys (blue, through December) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through November (right axis).

The regional surveys suggest an increase in manufacturing activity in December.

The ISM manufacturing index will released on Monday, Jan 3, 2011.

Other Economic Stories ...
• From the NAR: Pending Home Sales Continue Recovery
Unofficial Problem Bank list increases to 935 Institutions

Best wishes to all!

Sunday, December 19, 2010

Summary for Week ending December 18th

by Calculated Risk on 12/19/2010 09:20:00 AM

Note: here is the economic schedule for the coming week.

Below is a summary of the previous week, mostly in graphs. A key story was that the proposed tax legislation was passed by the Senate and House, and was signed into law on Friday.

Housing Starts increased slightly in November

Total Housing Starts and Single Family Housing Starts Click on graphs for larger image in graph gallery.

Total housing starts were at 555 thousand (SAAR) in November, up 3.9% from the revised October rate of 534 thousand, and up 16% from the all time record low in April 2009 of 477 thousand (the lowest level since the Census Bureau began tracking housing starts in 1959).

This graph shows total and single unit starts since 1968. This shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for two years - with a slight up and down over the last six months due to the home buyer tax credit.

This was close to expectations of 550 thousand starts. The low level of starts is good news for housing, and I expect Starts to stay low until more of the excess inventory of existing homes is absorbed.

Industrial Production, Capacity Utilization increased in November

Capacity UtilizationThis graph shows Capacity Utilization. "The capacity utilization rate for total industry rose to 75.2 percent, a rate 5.4 percentage points below its average from 1972 to 2009." This series is up 10.3% from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 75.2% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.

Industrial ProductionThis graph shows industrial production since 1967.

Industrial production increased in November, but production is still 6.8% below the pre-recession levels at the end of 2007.

This was slightly above consensus expectations of a 0.3% increase in Industrial Production, and an increase to 75.0% for Capacity Utilization.

Retail Sales increased 0.8% in November

Retail Sales On a monthly basis, retail sales increased 0.8% from October to November(seasonally adjusted, after revisions), and sales were up 7.7% from November 2009. This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline).

Retail sales are up 12.8% from the bottom, and only off 0.3% from the pre-recession peak.

This was above expectations for a 0.6% increase (and October was revised up). Retail sales ex-autos were up 1.2%, above expectations of a 0.6% increase.

CoreLogic: House Prices declined 1.9% in October

CoreLogic House Price Index CoreLogic reported house prices declined 1.9% in October. The CoreLogic HPI is a three month weighted average of August, September and October, and is not seasonally adjusted (NSA).

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index is down 3.93% over the last year, and off 30.2% from the peak.

The index is 2.2% above the low set in March 2009, and I expect to see a new post-bubble low for this index - possibly as early as next month or maybe in early 2011.

NFIB: Small Business optimism improved in November

Small Business Optimism IndexThis graph shows the small business optimism index since 1986. Although the index increased to 93.2 in October (highest since December 2007), it is still at recessionary level according to NFIB Chief Economist Bill Dunkelberg.

Note: Small businesses have a larger percentage of real estate and retail related companies than the overall economy.

CoreLogic: 10.8 Million U.S. Properties with Negative Equity in Q3

Note that the slight decline in homeowners with negative equity was mostly due to foreclosures.

First American CoreLogic released the Q3 2010 negative equity report this week.

CoreLogic reports that 10.8 million, or 22.5 percent, of all residential properties with mortgages were in negative equity at the end of the third quarter of 2010, down from 11.0 million and 23 percent in the second quarter. This is due primarily to foreclosures of severely negative equity properties rather than an increase in home values.
Here are a couple of graphs from the report:

CoreLogic Distribution Negative EquityThis graph shows the distribution of negative equity (and near negative equity). The more negative equity, the more at risk the homeowner is to losing their home.

About 10% of homeowners with mortgages have more than 25% negative equity - although the percent of homeowners with severe negative equity has been declining over the last few quarters mostly because of homes lost to foreclosure.

CoreLogic, Equity by StateThe second graph shows the break down of equity by state.

In Nevada very few homeowners with mortgages have any equity, whereas in New York almost half have over 50%.

As CoreLogic's Mark Fleming noted, the number of homeowners with negative might increase over the next few quarters with declining home prices.

NAHB Builder Confidence Flat in December

HMI and Starts Correlation The National Association of Home Builders (NAHB) reported the housing market index (HMI) was unchanged at 16 in December. Confidence remains very low ... any number under 50 indicates that more builders view sales conditions as poor than good.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the December release for the HMI and the October data for starts (graph before November housing starts were released).

This shows that the HMI and single family starts mostly move in the same direction - although there is plenty of noise month-to-month.

Other Economic Stories ...
• From the NY Times: Moody’s Slashes Ireland’s Credit Rating
Here come the '99ers
Unofficial Problem Bank list increases to 920 Institutions

Best wishes to all!

Sunday, December 05, 2010

Summary for Week ending December 4th

by Calculated Risk on 12/05/2010 09:28:00 AM

Below is a summary of the previous week, mostly in graphs. Note: here is the economic schedule for the coming week.

November Employment Report: 39,000 Jobs, 9.8% Unemployment Rate

The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Employment Pop Ratio, participation and unemployment rates Click on graph for larger image in graph gallery.

The unemployment rate increased to 9.8% (red line) from 9.6% in October.

The Employment-Population ratio declined to 58.2% in November matching the cycle low set in 2009 (black line).

The Labor Force Participation Rate was steady at 64.5% in November (blue line). This is the percentage of the working age population in the labor force. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years.

Percent Job Losses During Recessions The second graph shows the job losses from the start of the employment recession, in percentage terms aligned at maximum job losses.

For the current employment recession, employment peaked in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse).

Part Time Workers The number of workers only able to find part time jobs (or have had their hours cut for economic reasons) declined slightly to 8.972 million in November. This has been around 9 million since August 2009 - a very high level.

These workers are included in the alternate measure of labor underutilization (U-6) that was steady at 17.0% in November. The high for U-6 was 17.4% in October 2009. Still very grim.

Unemployed Over 26 Weeks This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 6.313 million workers who have been unemployed for more than 26 weeks and still want a job. This was up from 6.206 million in October. It appears the number of long term unemployed has peaked, however the level is extremely high - and the increases over the last two months is very concerning.

Most of the underlying details of the employment report were weak. The positives included small upward revisions to the September and October payroll reports, a slight increase in average hourly earnings, and a slight decline in part time workers.

The negatives include the unemployment rate increasing to 9.8%, few payroll jobs added (only 39,000 jobs), the decline in the employment-population ratio, the steady participation rate at a very low level, and the increase in workers unemployed for over 26 weeks.

Case-Shiller: Broad-based Declines in Home Prices in Q3

S&P/Case-Shiller released the monthly Home Price Indices for September (actually a 3 month average of July, August and September). This includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities), and the quarterly national index.

Case-Shiller House Prices Indices This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 29.8% from the peak, and down 0.7% in September(SA).

The Composite 20 index is off 29.6% from the peak, and down 0.8% in September (SA).

The next graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Case-Shiller Price Declines Prices increased (SA) in only 1 of the 20 Case-Shiller cities in September seasonally adjusted. Only Wash, D.C. saw a price increase (SA) in September, and that was very small.

Prices in Las Vegas are off 57.6% from the peak, and prices in Dallas only off 8.1% from the peak.

Prices are now falling - and falling just about everywhere. And it appears there are more price declines coming (based on inventory levels and anecdotal reports).

U.S. Light Vehicle Sales 12.26 million SAAR in November

Based on an estimate from Autodata Corp, light vehicle sales were at a 12.26 million SAAR in November. That is up 13.2% from November 2009, and up slightly from the October 2010 sales rate.

Vehicle SalesThis graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for November (red, light vehicle sales of 12.26 million SAAR from Autodata Corp).

This is the highest sales rate since September 2008, excluding Cash-for-clunkers in August 2009.

This was above most forecasts of around 12.0 million SAAR.

ISM Manufacturing Index decreases slightly to 56.6 in November

From the Institute for Supply Management: November 2010 Manufacturing ISM Report On Business® PMI was at 56.6% in November, down slightly from 56.9% in October. The consensus was for a decrease to 56.5%.

ISM PMI Aug 2010Here is a long term graph of the ISM manufacturing index.

In addition to the PMI, the ISM's new orders index was down to 56.6 from 58.9 in October.

The employment index decreased to 57.5 from 57.7 in October.

This was inline with the regional Fed manufacturing surveys.

Other Economic Stories ...
Restaurant Performance Index Rose to Three-Year High In October
• Hamilton: Europe and China: is this deja vu all over again?
• Michael Pettis: The rough politics of European adjustment.
• From Catherine Rampell at the NY Times: Persistence of Long-Term Unemployment Tests U.S.
• DOT: Vehicle miles driven increased in September
• From the Institute for Supply Management: October 2010 Non-Manufacturing ISM index showed expansion in November
• From the NAR:
Strong Rebound in Pending Home Sales

• ADP: Private Employment increased by 93,000 in November
Unofficial Problem Bank list increases to 920 Institutions

Best wishes to all!

Sunday, November 21, 2010

A Summary for the Week ending November 20th

by Calculated Risk on 11/21/2010 11:30:00 AM

Below is a summary of last week mostly in graphs. Note: A key story again last week was the imminent bailout of Ireland. There will probably be more on the bailout details later today.

  • Housing Starts declined in October

    Total Housing Starts and Single Family Housing Starts Click on graph for larger image in new window.

    Total housing starts were at 519 thousand (SAAR) in October, down 11.7% from the revised September rate of 588 thousand, and just up 9% from the all time record low in April 2009 of 477 thousand (the lowest level since the Census Bureau began tracking housing starts in 1959).

    This was below expectations of 590 thousand starts, mostly because of the volatile multi-family starts. Single-family starts decreased 1.1% to 436 thousand in October. This is 21% above the record low in January 2009 (360 thousand).

    The graph shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for almost two years - with a slight up and down over the last six months due to the home buyer tax credit. Starts will stay low until the excess inventory of existing homes is absorbed.

  • MBA National Delinquency Survey: Delinquency rate declines in Q3

    The MBA reported that 13.52 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q3 2010 (seasonally adjusted). This is down from 14.42 percent in Q2 2010.

    Note: the MBA's National Delinquency Survey (NDS) covered "about 44 million first-lien mortgages on one- to four-unit residential properties" and the "NDS is estimated to cover approximately 88 percent of the outstanding first lien mortgages in the market." This gives about 50 million total first lien mortgages or about 6.75 million delinquent or in foreclosure.

    MBA Delinquency by Period This graph shows the percent of loans delinquent by days past due.

    Most of the decline in the overall delinquency rate was in the seriously delinquent categories (90+ days or in foreclosure process). Part of the reason is lenders were being more aggressive in foreclosing in Q3 (before the foreclosure pause), and there was a surge in REO inventory (real estate owned). Some of the decline was probably related to modifications too.

    Loans 30 days delinquent decreased to 3.36%. This is slightly below the average levels of the last 2 years, but still high.

    Delinquent loans in the 60 day bucket decreased to 1.44% - the lowest since Q2 2008.

    With the foreclosure pause, the 90+ day and in foreclosure rates will probably increase in Q4.

  • CoreLogic: House Prices declined 1.8% in September

    The CoreLogic HPI is a three month weighted average of July, August, and September and is not seasonally adjusted (NSA).

    Loan Performance House Price IndexThis graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

    The index is down 2.8% over the last year, and off 29.2% from the peak.

    The index is 3.9% above the low set in March 2009, and I expect to see a new post-bubble low for this index later this year or early in 2011.
    “We’re continuing to see price declines across the board with all but seven states seeing a decrease in home prices,” said Mark Fleming, chief economist for CoreLogic. “This continued and widespread decline will put further pressure on negative equity and stall the housing recovery.”
  • Retail Sales increased 1.2% in October

    Retail Sales On a monthly basis, retail sales increased 1.2% from September to October (seasonally adjusted, after revisions), and sales were up 7.3% from October 2009.

    Retail sales increased 0.4% ex-autos - about at expectations.

    This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline).

    Retail sales are up 11.2% from the bottom, and only off 1.8% from the pre-recession peak.

  • Industrial Production, Capacity Utilization Flat in October

    From the Fed: Industrial production and Capacity Utilization
    Industrial production was unchanged in October after having fallen 0.2 percent in September. ... The capacity utilization rate for total industry was flat at 74.8 percent, a rate 6.6 percentage points above the low in June 2009 and 5.8 percentage points below its average from 1972 to 2009.
    Capacity Utilization This graph shows Capacity Utilization. This series is up 9.7% from the record low set in June 2009 (the series starts in 1967).

    Capacity utilization at 74.8% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.

    Note: y-axis doesn't start at zero to better show the change.

    Industrial ProductionThe next graph shows industrial production since 1967.

    Industrial production was unchanged in October, and production is still 7.3% below the pre-recession levels at the end of 2007.

    This was below consensus expectations of a 0.3% increase in Industrial Production, and an increase to 74.9% for Capacity Utilization.

  • AIA: Architecture Billings Index showed contraction in October

    Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.

    AIA Architecture Billing Index Reuters reported that the American Institute of Architects’ Architecture Billings Index decreased to 48.7 in October from 50.4 in September. Any reading below 50 indicates contraction.

    This graph shows the Architecture Billings Index since 1996. The index showed expansion in September (above 50) for the first time since Jan 2008, however the index is indicating contraction again in October.

    According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So there will probably be further declines in CRE investment for the next 9 to 12 months.

  • NAHB Builder Confidence up slightly in November

    HMI and Starts Correlation The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 16 in November. This is a 1 point increase from the revised 15 in October (revised down from 16). This is the highest level since June, but slightly below expectations of an increase to 17. The record low was 8 set in January 2009, and 16 is still very low ...

    Note: any number under 50 indicates that more builders view sales conditions as poor than good.

    This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the November release for the HMI and the September data for starts.

    This shows that the HMI and single family starts mostly move in the same direction - although there is plenty of noise month-to-month.

  • Inflation: Core CPI, Median CPI, 16% trimmed-mean CPI all below 1% YoY

    Over the last 12 months, the median CPI rose 0.5%, the trimmed-mean CPI rose 0.8%, and the CPI less food and energy rose 0.6%. The indexes for rent and owners' equivalent rent both increased in October (some analysts blamed the disinflation trend on these measures of rent, but that wasn't true in October).

    Inflation MeasuresThis graph shows these three measure of inflation on a year-over-year basis.

    They all show that inflation has been falling, and that measured inflation is up less than 1% year-over-year.

    As far as disinflation, the U.S. is still tracking Japan in the '90s ...

  • Other Economic Stories ...
  • From the NY Fed: The Empire State Manufacturing Survey indicates that conditions deteriorated in November for New York State manufacturers.
  • From the Philadelphia Fed Business Outlook Survey: Results from the Business Outlook Survey suggest that regional manufacturing activity showed improvement in November.
  • From the NY Times: Bernanke Speech Offers Support for Obama Policy
  • From Bloomberg: Bernanke Steps Up Stimulus Defense, Turns Tables on China
  • From the WSJ: Bernanke Takes Aim at China
  • Unofficial Problem Bank list increases to 903 Institutions

    Best wishes and Happy Thanksgiving to all!
  • Sunday, November 14, 2010

    Summary for Week ending November 14th

    by Calculated Risk on 11/14/2010 08:55:00 AM

    A summary of last week - mostly in graphs. Note: A key story all week concerned the possible bailout of Ireland.

  • Trade Deficit decreased in September

    The Census Bureau reported:
    [T]otal September exports of $154.1 billion and imports of $198.1 billion resulted in a goods and services deficit of $44.0 billion, down from $46.5 billion in August, revised.
    U.S. Trade Exports Imports Click on graph for larger image.

    This graph shows the monthly U.S. exports and imports in dollars through September 2010.

    After trade bottomed in the first half of 2009, imports increased much faster than exports. Over the last five months, both exports and imports have been relatively flat.

    The trade deficit will probably increase in October since oil prices increased, and China reported a higher trade surplus for October.

  • Ceridian-UCLA: Diesel Fuel index declines in October, "Signals Weaker Holiday Season"

    Pulse of Commerce IndexThis graph shows the index since January 1999.

    Press Release: Over the Road Trucked Shipping Decline Signals Weaker Holiday Season, Reports Latest Ceridian-UCLA Pulse of Commerce Index™
    The Ceridian-UCLA Pulse of Commerce Index™ (PCI), a real-time measure of the flow of goods to U.S. factories, retailers, and consumers, fell 0.6 percent in October following a decline of 0.5 percent in September and a decline of 1.0 percent in August. ... “We have had a recovery ‘time out,’” summarized [Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast].
  • NFIB: Small Business Optimism improves slightly

    Small Business Optimism Index From National Federation of Independent Business (NFIB): Small Business Optimism improves slightly
    Optimism rose again in October, but the index remains stuck in the recession zone established over the past two years, not a good reading even with a 2.7 point improvement over September. This is still a recession level reading based on Index values since 1973. However, job creation plans did turn positive and job reductions ceased.
    The above graph shows the small business optimism index since 1986. Although the index increased to 91.7 in October (highest since May), it is still at recessionary level according to NFIB Chief Economist Bill Dunkelberg.

    Small Business Hiring Plans The next graph shows the net hiring plans over the next three months.

    Hiring plans have turned slightly positive again. According to NFIB: "Average employment growth per firm was 0 in October, one of the best performances in years. ... Over the next three months, eight percent plan to increase employment (unchanged), and 13 percent plan to reduce their workforce (down three points), yielding a seasonally adjusted net one percent of owners planning to create new jobs, a four point gain from September."

    Small Business Poor Sales And the third graph shows the percent of small businesses saying "poor sales" is their biggest problem.

    Usually small business owners complain about taxes and regulations (that usually means business is good!), but now their self reported biggest problem is lack of demand.

  • Consumer Sentiment increases slightly in November

    Consumer Sentiment The preliminary Reuters / University of Michigan consumer sentiment index increased slightly in November to 69.3 from 67.7 in October.

    This was a big story in when consumer sentiment collapsed again in July. Since then this measure of consumer sentiment has mostly moved sideways at a fairly low level.

    In general consumer sentiment is a coincident indicator.

  • Other Economic Stories ...
  • Lawler: Early Read on October Existing Home Sales
  • From RealtyTrac: Foreclosure Activity Decreases 4 Percent in October
  • Private Label Security REO
  • From the Association of American Railroads: October 2010 Rail Traffic Continues Mixed Progress
  • Labor Force Participation Rate: What will happen?
  • Unofficial Problem Bank list increases to 898 Institutions

    Best wishes to all.