RSS Feed by Calculated Risk on 3/01/2010 07:32:00 PM
Monday, March 01, 2010
Reports: Senate nears agreement on consumer financial protection
Binyamin Appelbaum, at the WaPo, reports that Senators Dodd and Corker (Tenn) are nearing a deal to give authority for financial consumer protection to the Federal Reserve.
Uh, wasn't the Fed already responsible for consumer financial protection?
Fannie, Freddie and FHA REO Inventory
by Calculated Risk on 3/01/2010 04:02:00 PM
REO: Real Estate Owned.
Click on graph for larger image in new window.
This graph (ht Tom Lawler) shows the REO inventory for Fannie, Freddie and FHA through Q4 2009.
Even with all the delays in foreclosure, the REO inventory has increased sharply over the last two quarters, from 135,868 at the end of Q2 2009, to 153,007 in Q3 2009, and 172,357 at the end of Q4 2009.
ISM and Manufacturing Employment
by Calculated Risk on 3/01/2010 01:53:00 PM
The ISM report provides some hints for the BLS report later this week, but it is important to remember that manufacturing employment is a small percentage of the overall work force.
From the ISM Manufacturing report on employment:
ISM's Employment Index registered 56.1 percent in February, which is 2.8 percentage points higher than the seasonally adjusted 53.3 percent reported in January. This is the third month of growth in manufacturing employment, and the highest reading since January 2005 (58.7 percent). An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.The following graph shows the ISM Manufacturing Employment Index vs. the BLS reported monthly change in manufacturing employment (as a percent of manufacturing employment).
The graph includes data from 1948 through 2009. The earlier period (1948 - 1988) is in red, and the last 20 years is in blue.
Construction Spending Declines in January
by Calculated Risk on 3/01/2010 10:30:00 AM
Private residential construction spending was up slightly in January, but is mostly moving sideways. I expect some growth in residential spending in 2010, but the increases will probably be sluggish until the large overhang of existing inventory is reduced.
Non-residential spending decreased in January, and is now at the lowest level since November 2006. The collapse in non-residential construction spending continues ... 
Click on graph for larger image in new window.
The first graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.
Residential construction spending increased slighltly in January, and nonresidential spending declined.
ISM Manufacturing Index Shows Expansion in February
by Calculated Risk on 3/01/2010 10:00:00 AM
PMI at 56.5% in February. Down from 58.4% in January, and up from 54.9% in December.
From the Institute for Supply Management: February 2010 Manufacturing ISM Report On Business®
Economic activity in the manufacturing sector expanded in February for the seventh consecutive month, and the overall economy grew for the 10th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector grew for the seventh consecutive month during February. While new orders and production were not as strong as they were in January, they still show significant month-over-month growth. Additionally, the Employment Index is very encouraging, as it is up 2.8 percentage points for the month to 56.1 percent. This is the third consecutive month of growth in the Employment Index. With these levels of activity, manufacturers are seemingly willing to hire where they have orders to support higher employment."
January Personal Income Flat, Spending Increases
by Calculated Risk on 3/01/2010 08:30:00 AM
From the BEA: Personal Income and Outlays, January 2010
Personal income increased $11.4 billion, or 0.1 percent, and disposable personal income (DPI) decreased $47.6 billion, or 0.4 percent, in January, according to the Bureau of Economic Analysis. ... Personal consumption expenditures (PCE) increased $52.4 billion, or 0.5 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in January, compared with an increase of 0.1 percent in December.
...
Personal saving -- DPI less personal outlays -- was $367.2 billion in January, compared with $467.9 billion in December. Personal saving as a percentage of disposable personal income was 3.3 percent in January, compared with 4.2 percent in December.
Sunday, February 28, 2010
What about Financial Reform?
by Calculated Risk on 2/28/2010 11:59:00 PM
First from Paul Krugman: Financial Reform Endgame
A weak financial reform ... wouldn’t be tested until the next big crisis. All it would do is create a false sense of security and a fig leaf for politicians opposed to any serious action — then fail in the clinch.
Auto Sales: Blame it on the Snow and Toyota
by Calculated Risk on 2/28/2010 07:25:00 PM
In the Weekly Summary and a Look Ahead post, I included a consensus forecast of a decline in light vehicle sales to 10.4 million units in February, on a seasonally adjusted annual rate (SAAR) basis. That may be a little high ...
From The Detroit News: Snowstorms, Toyota problems cut into February auto sales
When results are released Tuesday, automotive research firm Edmunds.com predicts retail sales will increase 14.2 percent from a year earlier, while research firm TrueCar.com expects a nearly 9 percent bump. ... [On a SAAR basis] Edmunds predicting 10.6 million U.S. sales ... while TrueCar.com anticipates 10.04 million
Greece Bailout Plan and Further Austerity Measures moving forward
by Calculated Risk on 2/28/2010 03:29:00 PM
From Stephen Castle and Landon Thomas Jr. at the NY Times: Europe Union Moves Toward a Bailout of Greece
[T]he European Union is moving toward the first bailout in the history of its common currency, which is expected to involve loan guarantees from the German and French governments to encourage their banks to buy Greek debt.
Even as the negotiations continue, the bloc is insisting that Athens impose further, painful austerity measures ...
Weekly Summary and a Look Ahead
by Calculated Risk on 2/28/2010 11:55:00 AM
This will be a busy week for economic data, and the focus will be on the BLS February employment report to be released on Friday. The consensus is for a net loss of 50 to 80 thousand payroll jobs, and the unemployment rate to increase slightly to 9.8% (from 9.7%).
There is considerable debate on the impact of the snow storms on the employment report. The BLS will disclose and adjust for any snow related data collection issues, but some hiring might have been delayed because of the storms. However, if so, there will be a bounce back in March - however it is important to remember that the weekly unemployment claims were moving higher before the storms arrived. Also the temporary hiring for the 2010 Census will have increased slightly - I'm sure all of these issues will be widely discussed ...
On Monday, the BEA will release the Personal Income and Outlays report for January. This release is very useful for looking at both Personal Income and Personal Consumption Expenditures (PCE). Also on Monday, the ISM Manufacturing index (consensus is for expansion, but a slight decrease to 57.5% from 58.4%), and the January Construction Spending report from the Census Bureau (consensus is for a decline of 0.5%).
On Tuesday, the various manufacturers will release light vehicle sales for February. The consensus is for a decline to about 10.4 million on a Seasonally Adjusted Annual Rate (SAAR) basis from 10.8 million in January. Sales for Toyota will be closely watched. Also on Tuesday, the Personal Bankruptcy Filings estimate for February will be released.
