by Calculated Risk on 8/07/2012 10:16:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 3.8 million job openings on the last business day of June, little changed from 3.7 million in May, the U.S. Bureau of Labor Statistics reported today.
...
The level of total nonfarm job openings in June was up from 2.4 million at the end of the recession in June 2009.
...
In June, the quits rate was unchanged for total nonfarm, total private, and government. The number of quits was 2.1 million in June, up from 1.8 million at the end of the recession in June 2009. ... Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for June, the most recent employment report was for July.

Click on graph for larger image.

Notice that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in June to 3.762 million, up from 3.657 million in May. The number of job openings (yellow) has generally been trending up, and openings are up about 16% year-over-year compared to June 2011. This is the most job openings since mid-2008.

Quits decreased slightly in June, however quits are up about 9.5% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").

All current employment graphs

by Calculated Risk on 8/07/2012 08:52:00 AM

Notes: This CoreLogic House Price Index report is for June. The Case-Shiller index released last week was for May. Case-Shiller is currently the most followed house price index, however CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® June Home Price Index Rises 2.5 Percent—Representing Fourth Consecutive Year-Over-Year Increase

Home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011. On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in June 2012 compared to May 2012. The June 2012 figures mark the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012, the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic Pending HPI indicates that July home prices, including distressed sales, will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011.

“Home prices are responding positively to reductions in both visible and shadow inventory over the past year,” said Mark Fleming, chief economist for CoreLogic. “This trend is a bright spot because the decline in shadow inventory translates to fewer distressed sales, which helps sustain price appreciation.”

Click on graph for larger image.

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

The index was up 1.3% in May, and is up 2.5% over the last year.

The index is off 29% from the peak - and is up 7% from the post-bubble low set in February (the index is NSA, so some of the increase is seasonal).

The second graph is from CoreLogic. The year-over-year comparison has turned positive.

This is the fourth consecutive month with a year-over-year increase, and excluding the tax credit bump, these are the first year-over-year increases since 2006.

by Calculated Risk on 8/07/2012 08:33:00 AM

From the WSJ: Fed Official Calls for Bond Buying

Eric Rosengren, president of the Federal Reserve Bank of Boston, called on the Fed to launch an aggressive, open-ended bond buying program that the central bank would continue until economic growth picks up and unemployment starts falling again.

His call came in an interview with The Wall Street Journal ... His decision to speak out forcefully is a sign of the momentum building inside the Fed for a new phase of action.

Mr. Rosengren said the Fed should buy more mortgage-backed securities and possibly U.S. Treasury securities in an open-ended program, and state that it will continue to buy bonds "until we start seeing some pretty significant improvements in growth and income."

Rosengren isn't currently a voting member, but it does seem like momentum is building for QE3.

by Calculated Risk on 8/06/2012 09:25:00 PM

Fed Chairman Ben Bernanke will take questions on Tuesday, and his comments will be closely scrutinized for hints about QE3.

• On Tuesday, at 10:00 AM ET, the Job Openings and Labor Turnover Survey for June will be released by the BLS. The number of job openings has generally been trending up for the last three years. "Quits" have been increasing too - quits are frequently a sign of more confidence in the labor market.

• Also at 10:00 AM, the Trulia house asking Price Monitor for July will be released. This monitor is based on asking prices and is adjusted for seasonality and mix. This is a leading indicator for the repeat sales indexes. This monitor has been showing rising prices and will probably show another increase in July.

• At 2:30 PM, Fed Chairman Ben Bernanke will speaks at "A Teacher Town Hall Meeting". The event will be broadcast live and the Q&A might provide hints about QE3. The Twitter discussion is at hashtag: #FedTownHall

• At 3:00 PM, Consumer Credit for July will be released. The consensus is for credit to increase $10.5 billion.

by Calculated Risk on 8/06/2012 06:25:00 PM

Here is another update using inventory numbers from HousingTracker / DeptofNumbers to track changes in listed inventory. Tom Lawler mentioned this last year.

According to the deptofnumbers.com for (54 metro areas), inventory is off 22.8% compared to the same week last year. Unfortunately the deptofnumbers only started tracking inventory in April 2006.

This graph shows the NAR estimate of existing home inventory through June (left axis) and the HousingTracker data for the 54 metro areas through early August.

Click on graph for larger image.

Since the NAR released their revisions for sales and inventory last year, the NAR and HousingTracker inventory numbers have tracked pretty well.

On a seasonal basis, housing inventory usually bottoms in December and January and then starts to increase again through the summer. Inventory only increased a little this spring and has been declining for the last three months by this measure. It looks like inventory has peaked for this year.

The second graph shows the year-over-year change in inventory for both the NAR and HousingTracker.

HousingTracker reported that the early August listings, for the 54 metro areas, declined 22.7% from the same period last year.

This decline in active inventory remains a huge story, and the lower level of inventory is pushing up house prices.

All current Existing Home Sales graphs

by Calculated Risk on 8/06/2012 02:00:00 PM

From the Federal Reserve: The July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices

In the July survey, modest fractions of domestic banks, on balance, continued to report having eased their lending standards across most loan types over the past three months.

Relatively large fractions reported stronger demand for many types of loans over that period.
...
Regarding loans to households, reported changes in standards were mixed across loan categories, while demand increased somewhat. Lending standards over the past three months were little changed, on net, for prime mortgages and tightened somewhat for nontraditional mortgages. However, a relatively large fraction of respondents reported having experienced stronger demand for prime mortgages over the same time period.
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A sizable fraction of domestic banks reported that their business had increased due to decreased competition from European banks and that they remain willing to accommodate additional such business. In response to the second set of special questions, about one-third of the respondents that are participating in HARP 2.0 reported that HARP refinance applications accounted for a significant share of total refinance applications over the past three months, and a large majority of respondents indicated that they anticipate that more than 60 percent of received HARP applications will be approved and successfully completed.

Click on graph for larger image.

Here are some charts from the Fed.

This graph shows the change in demand for CRE (commercial real estate) loans.

Increasing demand and some easing in standards suggests some increase in CRE activity.

The second graph shows the change in demand for mortgages. Note the break in the graph - in recent years, the Fed has asked about demand for different types of mortgages.

It appears demand for mortgages is picking up.

The survey also has some discussion on Europe. Whereas domestic banks are easing standards slightly and seeing an increase in demand, they are tightening standards for lending to European banks:

large fractions of both domestic and foreign banks that extend credit to banks headquartered in Europe or their affiliates or subsidiaries indicated that they had tightened standards on such loans over the past three months.

by Calculated Risk on 8/06/2012 12:44:00 PM

From HotelNewsNow.com: STR: US results for week ending 28 July

In year-over-year comparisons for the week, occupancy ended the week with a 3.3-percent increase to 75.1 percent, average daily rate increased 4.8 percent to US$108.95 and revenue per available room ended the week with an increase of 8.2 percent to US$81.87.

The 4-week average is still above last year, and is close to pre-recession levels. The occupancy rate has been above 75% for the last two weeks - for the first time since 2007.

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using a four week average.

Click on graph for larger image.

The red line is for 2012, yellow is for 2011, blue is "normal" and black is for 2009 - the worst year since the Great Depression for hotels.

This could be the peak weekly occupancy rate for 2012 (the 4-week average will move up some more). Overall occupancy is back to normal, and will probably move higher over the next couple of years since there is limited new supply being built.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 8/06/2012 09:01:00 AM

From CBSAtlanta: Gas prices in Metro Atlanta still on the rise

Average retail gasoline prices in Atlanta rose 5.7 cents per gallon last week, averaging $3.52/g Sunday ... The national average increased 9.3 cents per gallon in the last week to $3.60/g.
...
"Watching the national average last week, one might have expected war broke out in the Middle East or a major hurricane shutting down production, neither of which happened, yet gasoline prices spiked," said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "... The good news for motorists is that the end to the summer driving season and change to winter-spec fuel is in view, which will likely put downward pressure on gasoline prices."

Professor Hamilton presented a calculator from Political Calculations that estimates the cost of gasoline based on Brent oil prices. Currently this suggests a price of around $3.55 per gallon - about the current price.

The following graph shows the recent increase in gasoline prices. Gasoline prices are down from the peak in early April, but up about 20 cents over the last five weeks.

Note: If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

Weekend:
• Summary for Week Ending Aug 3rd
• Schedule for Week of Aug 5th

by Calculated Risk on 8/05/2012 10:03:00 PM

Off topic: The Mars Rover Lands tonight. NASA TV has the coverage. The landing is at 10:31 PM PT tonight or 1:31 AM ET in the early morning.

• On Monday, at 9:00 AM ET, pre-recorded speech by Fed Chairman Ben Bernanke, "Economic Measurement".

• At 2:00 PM, the Fed is expected to release the July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices. This survey might show if there has been any tightening in financial standards due to the European crisis, or if loan demand has weakened in the US.

The Asian markets are green tonight, with the Nikkei up 1.8% and the Shanghai Composite up 2.0%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P future are up about 3, and the DOW futures up about 15.

Oil: WTI futures are at $91.29 and Brent is at $108.60 per barrel.

Yesterday:
• Summary for Week Ending Aug 3rd
• Schedule for Week of Aug 5th

by Calculated Risk on 8/05/2012 01:08:00 PM

Brad Plummer at the WaPo discusses two issues with employment and seasonal factors: Wait, the U.S. economy actually lost 1.2 million jobs in July?

The U.S. economy lost 1.2 million jobs between June and July. But that’s not how it got reported. When the Bureau of Labor Statistics (BLS) released its jobs figures for July, it said the economy gained 163,000 jobs. So what gives?

BLS isn’t hiding anything. The discrepancy just has to do with what’s known as “seasonal adjustments.” The U.S. economy follows certain predictable patterns in hiring and layoffs every year. School districts always let workers go for the summer and hire in the fall. Retailers always staff up for the Christmas holidays and lay people off afterwards. Students always flood the labor market in June.

So if we want to know how well the economy is doing, we want to know how many jobs were added after taking these predictable fluctuations into account. ...
In theory, that makes sense. But some economists and analysts now wonder if the BLS seasonal adjustments are somehow off a bit. If the financial crisis and recession mucked with the seasonal ebb and flow of the economy, then the adjustments that BLS makes for its monthly reports might be a bit skewed. Some jobs reports might look much better than they actually are. And others might look worse.

The first point that Plummer made was that there is a distinct seasonal pattern for employment. Even in the best of years there are a significant number of jobs lost in January and July. In 1994, when the economy added almost 3.9 million jobs, there were 2.25 million lost in January 1994, and almost 1 million payroll jobs lost in July 1994.

Click on graph for larger image.

This graph shows the seasonal pattern for the last decade for both total nonfarm jobs and private sector only payroll jobs. Notice the large spike down every January.

In July, private sector hiring is weak, but the decline in non-farm payrolls is from the public sector (teacher layoffs). Usually those teachers return to the payrolls in September and early October.

Since this happens every year, the BLS applies a seasonal adjustment before reporting the headline number. The key point is this is a series that NEEDS a seasonal adjustment!

The second issue Plummer mentioned is that the seasonal factor might be off a little (skewed by the deep recession). It is possible that the BLS is understating employment every spring and early summer, and overstating employment in the fall and winter. I mentioned this possibility last week in the employment preview.

One way to remove the seasonal factors is to look at the 12 month net change in payroll jobs. This graph shows the 12 month net change for both total employment and private employment.

Over the last 12 months, the economy has added 1.94 million private sector jobs, and 1.83 total non-farm payroll jobs (the public sector has lost 111 thousand jobs over the last 12 months).

Note that the red line has been above the blue line for the last few years - this is very unusual and is due to the decline in employment at all levels of government (especially state and local).

It is possible that the BLS overstated the strength of the labor market last winter, and understated the strength over the last several months (any seasonally skew could have been exaggerated this year by the mild winter). Of course the 12 month net change lags changes in the labor market - and that is why the BLS reports the seasonally adjusted payroll numbers.