by Calculated Risk on 4/08/2014 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 4.2 million job openings on the last business day of February, up from January, the U.S. Bureau of Labor Statistics reported today. ...
...
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 number of quits (not seasonally adjusted) was little changed over the 12 months ending in February for total nonfarm, total private, and government.

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 February, the most recent employment report was for March.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  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 February to 4.173 million from 3.874 million in January.   

The number of job openings (yellow) is up 4% year-over-year compared to February 2013.

Quits increased in February and are up about 5% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Not much changes month-to-month in this report - and the data is noisy month-to-month, but the general trend suggests a gradually improving labor market.  It is a good sign that job openings are over 4 million and at the highest level since January 2008.

by Calculated Risk on 4/08/2014 08:29:00 AM

From the National Federation of Independent Business (NFIB): Small Business Rollercoaster Continues

The latest Small Business Optimism Index rose 2 points to 93.4, mostly reversing the February decline ... NFIB owners increased employment by an average of 0.18 workers per firm in March (seasonally adjusted), an improvement over February’s 0.11 reading and the sixth positive month in a row.

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index increased to 93.4 in March from 91.4 in February.

by Calculated Risk on 4/07/2014 09:32:00 PM

At the end of each day, I always check the Alphaville Closer.

A couple of interesting links:
• Introducing the new St Louis FRED blog (CR Note: Added FRED blog to right sidebar)

• And from Business Insider: Wall Street's Brightest Minds Reveal THE MOST IMPORTANT CHARTS IN THE WORLD

Tuesday:
• 7:30 AM ET, NFIB Small Business Optimism Index for March.

• 10:00 AM, Job Openings and Labor Turnover Survey for February from the BLS. The number of job openings (yellow) were up 7.6% year-over-year compared to January 2013, and Quits decreased in January and were up about 3% year-over-year.

by Calculated Risk on 4/07/2014 06:56:00 PM

From the Congressional Budget Office (CBO): Monthly Budget Review for March 2014

The federal government ran a budget deficit of $413 billion for the first six months of fiscal year 2014, CBO estimates—$187 billion less than the shortfall recorded in the same span last year. Revenues were about 10 percent higher; and outlays, about 4 percent lower. ...

And for March 2014:

The federal government incurred a deficit of $36 billion in March 2014, CBO estimates—$71 billion less than the $107 billion deficit incurred in March 2013. Because March 1 fell on a weekend in 2014, certain payments that ordinarily would have been made in March this year were made in February. Without those shifts in the timing of payments, and prepayments of deposit insurance premiums that lowered collections in fiscal year 2013, the deficit in March 2014 would have been $34 billion smaller than it was in the same month last year.
emphasis added

The consensus was the deficit for March would be around $133 billion, and it appears the deficit for fiscal 2014 will be smaller than the CBO currently expects (less than 3.0% of GDP).

Of course there will be a solid surplus in April.

by Calculated Risk on 4/07/2014 04:14:00 PM

Here is another weekly update on housing inventory ...

There is a clear seasonal pattern for inventory, with the low point for inventory in late December or early January, and then usually peaking in mid-to-late summer.

The Realtor (NAR) data is monthly and released with a lag (the most recent data was for February).  However Ben at Housing Tracker (Department of Numbers) has provided me some weekly inventory data for the last several years.

Click on graph for larger image.

This graph shows the Housing Tracker reported weekly inventory for the 54 metro areas for 2010, 2011, 2012, 2013 and 2014.

In 2011 and 2012, inventory only increased slightly early in the year and then declined significantly through the end of each year.

In 2013 (Blue), inventory increased for most of the year before declining seasonally during the holidays.  Inventory in 2013 finished up 2.7% YoY.

Inventory in 2014 (Red) is now 7.7% above the same week in 2013.

Inventory is still very low, but this increase in inventory should slow house price increases. 

Note: One of the key questions for 2014 will be: How much will inventory increase?  My guess is inventory will be up 10% to 15% year-over-year by the end of 2014 (inventory would still be below normal).

by Calculated Risk on 4/07/2014 02:59:00 PM

From housing economist Tom Lawler:

ARMLS reported that residential home sales by realtors in the Greater Phoenix, Arizona area totaled 6,712 in March, down 17.7% from last March’s pace. Lender-owned properties were 6.9% of last month’s sales, down from 11.6% last March, while last month’s short-sales share was 5.1%, down from 15.1% a year ago. All-cash transactions were 33.1% of last month’s sales, down from 41.5% last March. Active listings in March totaled 29,939, up 0.9% from February and up 44.4% from a year ago. The median home sales price last month was $187,000, up 11.6% from last March. Last month’s sales were the lowest for a March since 2008.

Residential Home Sales, Greater Phoenix Area, ARMLS
	Mar-11	Mar-12	Mar-13	Mar-14
Number of Sales by Type
Lender owned	4,589	1,872	948	462
Short sales	1,889	2,275	1,233	339
"Non-distressed" sales	3,455	4,722	5,972	5,911
Total sales	9,933	8,869	8,153	6,712
Share of Sales by Type (and All-Cash Share)
Lender owned	46.2%	21.1%	11.6%	6.9%
Short sales	19.0%	25.7%	15.1%	5.1%
Non-distressed	34.8%	53.2%	73.2%	88.1%
All-cash	49.8%	47.6%	41.5%	33.1%

Click on graph for larger image.

This graph from Tom Lawler shows the active inventory in the Phoenix area. As Tom noted, listings are way up - but also way below the "bust" years.

by Calculated Risk on 4/07/2014 12:12:00 PM

Here is something I like to look at every month.

These diffusion indexes are a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS.

From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.

Click on graph for larger image.

The BLS diffusion index for total private employment was at 58.5 in March, down from 59.1 in February.

For manufacturing, the diffusion index decreased to 50.0, down from 51.9 in March.

Job growth was fairly widespread for private employment in March.

by Calculated Risk on 4/07/2014 08:29:00 AM

Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division) released their Mortgage Monitor report for February today. According to LPS, 5.97% of mortgages were delinquent in February, down from 6.27% in January. BKFS reports that 2.22% of mortgages were in the foreclosure process, down from 3.38% in February 2013.

This gives a total of 8.17% delinquent or in foreclosure. It breaks down as:

• 1,749,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,242,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 1,115,000 loans in foreclosure process.

For a total of ​​4,106,000 loans delinquent or in foreclosure in February. This is down from 5,104,000 in February 2013.

Click on graph for larger image.

This graph from BKFS shows percent of loans delinquent and in the foreclosure process over time.

Delinquencies and foreclosures are moving down - and might be back to normal levels in a couple of years.  BKFS reports: "Delinquencies are below 6% for the first time since ‘08; foreclosures down 34% in the last year"

The second graph from BKFS shows the credit score distribution for all mortgage originations. From Herb Blecher, senior vice president of Black Knight’s Data and Analytics division:

“Credit standards have shown little sign of easing -- only about 30 percent of 2013 loans went to borrowers with credit scores below 720 -- which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow."
emphasis added

There is much more in the mortgage monitor.

by Calculated Risk on 4/06/2014 09:46:00 PM

Monday:
• Early: The Black Knight February Mortgage Monitor report. This is a monthly report of mortgage delinquencies and other mortgage data.

• At 3:00 PM, Consumer Credit for February from the Federal Reserve.

Weekend:
• Schedule for Week of April 6th

• WSJ Employment Graph ignores Demographics, Needs Correction

• Research: Labor Force Participation Rate

• Labor Force Participation Rate Update

• Possible Reasons for the Decline in Prime-Working Age Men Labor Force Participation

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures and DOW futures are up slightly (fair value).

Oil prices are mixed with WTI futures at $100.85 per barrel and Brent at $106.01 per barrel.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.55 per gallon (up sharply over the last two months and about the same level as a year ago).  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

by Calculated Risk on 4/06/2014 06:42:00 PM

An interesting topic is why there has been a steady decline in the labor force participation rate for prime-working age men (ages 25 to 54).

In the previous post I wrote: "The participation rate for [prime-working age] men decreased from the high 90s decades ago, to 88.5% in March. This is just above the lowest level recorded for prime working age men. This declining participation is a long term trend, and the result of inherited wealth - OK, just joking - the reasons for this decline in working age men participation are varied and need more research, however some analysts incorrectly blame this trend solely on more social benefits."

First here is a repeat of the of the graph I posted earlier today:

Click on graph for larger image.

This graph shows the changes in the participation rates for men and women and combined since 1960 (in the 25 to 54 age group - the prime working years).

The participation rate for women increased significantly from the mid 30s to the mid 70s and then flattened out. 

The decline in the participation rate for prime-working age men is a long term trend.

The second graph shows just prime-working age men (Note the change in scale from the previous graph to better show the trend).

The dashed line is the trend from 1960 through 2007 (trend line does not include the recent recession - economic weakness has pushed down the participation rate below trend recently).

So why the long term decline? Here are some possible reasons:

1) Cultural changes. As a larger percentage of women entered the labor force (pink line in first graph), this allowed men some more options, such as: a) take some time off between jobs, b) go back to school to improve skills or be able to change careers, c) be a "Mr. Mom".   There used to be stigma for men not working - or ego problems with women being the prime "bread winner" - but over time that stigma has lessened.  Even though the percentage of prime-working age women in the labor force is now declining slowly, I think the cultural changes are still the main driver for the decline in the participation rate for men.

2) Demographics.  It is possible that the changing ethnicity of the prime working-age population is contributing to the decline in the participation rate for prime-working age men.  This is unclear from the top level data (We'd need data by ethnicity, sex, and age group).

3) Underground Economy.  It is also possible that the underground economy (cash economy) is growing, and some of these men are actually working "off the books" for cash.

4) Increased benefits for disability and illness.  Note: Everyone opposes fraud, but that is probably only a small problem.  Overall most Americans would consider it good news that people with serious illnesses or disabilities receive benefits - even if that has contributed a little to the decline in the participation rate.

5) Inheritance and lower estate taxes.  Although the impact has probably been small, the decline in the participation rate for working-age men has tracked the decline in the inheritance tax over the last 50 years.  I'm guessing there are more working-age men not working today because they are living off their inheritance.

I'm sure there are other possible reasons too.  It is important to understand - that for whatever reason - this decline in participation for prime working-age men is one of the drivers of the overall decline in participation (the two main drivers are a large cohort moving into retirement, and more young people staying in school).