by Calculated Risk on 3/17/2011 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending March 12, the advance figure for seasonally adjusted initial claims was 385,000, a decrease of 16,000 from the previous week's revised figure of 401,000. The 4-week moving average was 386,250, a decrease of 7,000 from the previous week's revised average of 393,250.

Click on graph for larger image in graph gallery.

This graph shows the 4-week moving average of weekly claims for the last 40 years. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week by 7,000 to 386,250.

This is the 3rd consecutive week with the 4-week average below the 400,000 level, and although there is nothing magical about 400,000, this is a positive step for the labor market. Unfortunately the recent JOLTS data indicated that hiring hasn't picked up significantly yet, even as layoffs and discharges have slowed.

by Calculated Risk on 3/16/2011 09:02:00 PM

Here is a live video feed.

Two CH-47 helicopters are rotating dumping water. UPDATE: Four drops were completed - now suspended. Water cannons are next.

Also from HNK: Water to be sprayed to cool down No 4 reactor

A Tokyo police unit is set to use water spray vehicles to cool down the No. 4 reactor at the disaster-stricken Fukushima Daiichi nuclear power plant.

The police say it will begin the ground operation to spray water from outside the reactor on Thursday morning.

Earlier:
Housing Starts decrease sharply in February

by Calculated Risk on 3/16/2011 05:48:00 PM

By request ...

From Reuters: Japan earthquake LIVE (an excellent site to follow events)

From Reuters: Japan scrambles to pull nuclear plant back from brink

From Nikkei: Tepco To Build New Power Source To Aid In Cooling

Tokyo Electric Power Co. (9501) will on Thursday start work to build makeshift electric power sources within the Fukushima Daiichi nuclear power plant, a move intended to inject water more efficiently into the plant's crippled reactors, the company said at a dawn news conference.
...
Construction will start as soon as Thursday morning, an official said, but it will be unclear how long the work will take to complete until it begins. The work will be carried out at the same time as cooling efforts under way by police water cannon trucks.

From Reuters: TSE to keep Japan's trading floors open: report

NHK World English TV stream

From the NY Times: U.S. Calls Radiation ‘Extremely High’ and Urges Deeper Caution in Japan

The chairman of the United States Nuclear Regulatory Commission gave a significantly bleaker appraisal of the threat posed by Japan’s nuclear crisis than the Japanese government, saying on Wednesday that the damage at one crippled reactor was much more serious than Japanese officials had acknowledged and advising Americans to evacuate a wider area around the plant than the perimeter established by Japan.

From the WSJ: Officials Try to Cool Spent Nuclear Fuel

Earlier:
Housing Starts decrease sharply in February

Best wishes to all.

by Calculated Risk on 3/16/2011 02:04:00 PM

Although the number of multi-family housing starts was down in February to 96,000 at a seasonally adjusted annual rate (SAAR) (see Housing Starts decrease sharply in February), the number of multi-family starts can vary significantly month to month.

In general multi-family housing starts are trending up. Apartment owners are seeing falling vacancy rates, and some have started to plan for 2012 and will be breaking ground this year. We can see this in reports from architects and from comments at the NMHC apartment conference:

The expectations are for a record low supply completed this year (2011). Some pickup in completions next year (2012), and then plenty of completions in 2013.

The following graph shows the lag between multi-family starts and completions.

Click on graph for larger image in graph gallery.

The blue line is for multifamily starts and the red line is for multifamily completions. Since multifamily starts collapsed in 2009, completions collapsed in 2010.

Notice that the blue line (Starts) is now trending up, and the red line (completions) is still falling. Since it takes about 13 months on average to complete a multi-family building, the low level of starts in 2010 means a low level of completions in 2011.

In summary: For 2011, we should expect multi-family completions to be at or near a record low, and an increase in multi-family starts.

by Calculated Risk on 3/16/2011 11:42:00 AM

By request ...

From Reuters: EU energy chief says Japan reactor "out of control"

Europe's energy chief warned on Wednesday of a further catastrophe at Japan's nuclear site in the coming hours but his spokeswoman said he had no specific or privileged information on the situation.

"In the coming hours there could be further catastrophic events, which could pose a threat to the lives of people on the island," Guenther Oettinger told the European Parliament. ... "The cooling systems did not work, and as a result we are somewhere between a disaster and a major disaster,"

From Reuters: Japan earthquake LIVE (an excellent site to follow events)

From the NY Times: Japan Says 2nd Reactor May Have Ruptured With Radioactive Release

NHK English

IAEA Update on Japan Earthquake

Japanese authorities have reported concerns about the condition of the spent nuclear fuel pool at Fukushima Daiichi Unit 3 and Unit 4. Japanese Defense Minister Toshimi Kitazawa announced Wednesday that Special Defence Forces helicopters planned to drop water onto Unit 3, and officials are also preparing to spray water into Unit 4 from ground positions, and possibly later into Unit 3. Some debris on the ground from the 14 March explosion at Unit 3 may need to be removed before the spraying can begin.

Best wishes to all.

by Calculated Risk on 3/16/2011 08:30:00 AM

Click on graph for larger image in graph gallery.

Total housing starts were at 479 thousand (SAAR) in February, down 22.5% from the revised January rate of 618 thousand, and barely up 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).

Single-family starts decreased 11.8% to 375 thousand in February - the lowest level since early 2009.

The second 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 over two years - with slight ups and downs due to the home buyer tax credit.

Here is the Census Bureau report on housing Permits, Starts and Completions.

Housing Starts:
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 479,000. This is 22.5 percent (±9.8%) below the revised January estimate of 618,000 and is 20.8 percent (±9.0%) below the February 2010 rate of 605,000.

Single-family housing starts in February were at a rate of 375,000; this is 11.8 percent (±10.0%) below the revised January figure of 425,000. The February rate for units in buildings with five units or more was 96,000.

Building Permits:
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 517,000. This is 8.2 percent (±3.3%) below the revised January rate of 563,000 and is 20.5 percent (±3.5%) below the February 2010 estimate of 650,000.

Single-family authorizations in February were at a rate of 382,000; this is 9.3 percent (±1.2%) below the revised January figure of 421,000. Authorizations of units in buildings with five units or more were at a rate of 121,000 in February.

This was well below expectations of 560 thousand starts, and near the record low.

This 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. Note: This is the lowest level for Building permits since the Census Bureau started tracking permits.

by Calculated Risk on 3/16/2011 07:13:00 AM

The MBA reports: Mortgage Purchase Applications Decrease in Latest MBA Weekly Survey

The Refinance Index increased 0.9 percent from the previous week and is the highest Refinance Index recorded in the survey since December 2010. The seasonally adjusted Purchase Index decreased 4.0 percent from one week earlier.
...
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79 percent from 4.93 percent, with points increasing to 1.07 from 0.87 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.

Click on graph for larger image in graph gallery.

This graph shows the MBA Purchase Index and four week moving average since 1990.

The four-week moving average of the purchase index is still at 1997 levels, and even with the large percentage of cash buyers recently, this still suggests fairly weak home sales through April. Note: Refinance activity has picked up a little with lower mortgage rates.

by Calculated Risk on 3/15/2011 10:24:00 PM

From economist Tom Lawler:

Based on available local MLS sales stats, I estimate that US existing home sales this February were down very slightly from last February’s pace on an unadjusted basis. Assuming that this February’s seasonal factor is little changed from last February’s (which is what I expect), existing home sales on a seasonally adjusted basis should come in at an annual rate of around 5.0 million, which would be down about 6.7% from January’s pace, though January sales seemed a bit high relative to my local tracking. Such a drop seems large relative to the pending home sales index in the previous few months, though adverse weather in many parts of the country appear to have delayed closings and may account for some of this “discrepancy.”

On the “inventory” front, local MLS data suggest that on aggregate existing home listings were little changed to a tad down from January, despite the normal seasonal increase. If the NAR reports flat existing home inventories for February relative to January, then inventories will show a decline from a year ago – which would be consistent with local MLS reports (in aggregate). A caution here, however: the NAR’s reported monthly drop in inventories exceeded my tracking, and in the past the NAR’s monthly increase in February has exceeded estimates based on local tracking.

CR notes:
• This would put the months-of-supply around 8 months, up from the 7.6 months reported in January.
• This is before the new "benchmark revision" that will be released this summer. I expect the benchmark revision to show significantly lower sales for the last few years.

Earlier:
• Empire State Manufacturing Survey indicates faster growth in March
• NAHB Builder Confidence increases slightly in March, Still depressed
• Residential Remodeling Index shows strong increase year-over-year

by Calculated Risk on 3/15/2011 07:46:00 PM

By request ...

From Reuters: Flames no longer visible at Fukushima Daiichi No.4 reactor-NHK

From Reuters: Japan earthquake LIVE

Breaking: TEPCO says it is considering dispersing boric acid over the No.4 plant from a helicopter

From the NY Times: Fire Erupts at Troubled Reactor; Helicopters May Be Used at Plant

From the WSJ: New Fire Breaks Out at Damaged Reactor.

NHK English

IAEA Update on Japan Earthquake

Japanese authorities have informed the IAEA that the evacuation of the population from the 20-kilometre zone around Fukushima Daiichi has been successfully completed.

The Japanese authorities have also advised that people within a 30-km radius to take cover indoors.

Best wishes to all.

by Calculated Risk on 3/15/2011 04:09:00 PM

The first graph shows the rolling 12 month average of loaded inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported - and possible hints about the trade report for February. LA area ports handle about 40% of the nation's container port traffic.

Click on graph for larger image in graph gallery.

To remove the strong seasonal component for inbound traffic, this graph shows the rolling 12 month average.

On a rolling 12 month basis, inbound traffic is up 17% and outbound up 9%.

The 2nd graph is the monthly data (with strong seasonal pattern).

For the month of February, loaded inbound traffic was up 7% compared to February 2010, and loaded outbound traffic was up less than 1% compared to February 2010 - and down compared to January 2011. This suggests the trade deficit with China (and other Asians countries) probably increased in February.

Earlier:
• Empire State Manufacturing Survey indicates faster growth in March
• NAHB Builder Confidence increases slightly in March, Still depressed
• Residential Remodeling Index shows strong increase year-over-year