by Calculated Risk on 2/04/2018 08:09:00 AM

From the U.S. Courts: Bankruptcy Filings Fall 0.7% – Smallest 12-Month Decline Since 2010

Bankruptcy filings in the 12-month period ending December 31, 2017, fell just 0.7 percent, compared with bankruptcy cases filed in calendar year 2016. According to newly released data, 789,020 cases were filed in 2017, compared with 794,960 in the previous year.

The percentage decline is the smallest for a 12-month period since bankruptcy filings reached a peak in 2010. The number of bankruptcy filings is the lowest for any calendar year since 2006, and the seventh consecutive calendar year that filings have fallen.

Click on graph for larger image.

This graph shows the business and non-business bankruptcy filings by calendar year since 2001.

The sharp decline in 2006 was due to the so-called "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". (a good example of Orwellian named legislation since this was more a "Lender Protection Act").

Other than 2006, this was the lowest level for filings since 1995. This is another indicator of an economy that has mostly recovered from the housing bust and financial crisis.

by Calculated Risk on 2/03/2018 08:11:00 AM

This will be a light week for economic data.

The key reports this week are the trade deficit and job openings.

----- Monday, Feb 5th -----
10:00 AM: the ISM non-Manufacturing Index for January. The consensus is for index to increase to 56.2 from 55.9 in December.

----- Tuesday, Feb 6th -----
8:30 AM: Trade Balance report for December from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through November. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be at $51.9 billion in December from $50.5 billion in November.

10:00 AM ET: Job Openings and Labor Turnover Survey for December from the BLS.

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

Jobs openings decreased in November to 5.879 million from 5.925 in October.

The number of job openings (yellow) were up 4.4% year-over-year, and Quits were up 3.1% year-over-year.

----- Wednesday, Feb 7th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

3:00 PM: Consumer Credit from the Federal Reserve. The consensus is for consumer credit to increase $20.0 billion in December.

----- Thursday, Feb 8th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 235 thousand initial claims, up from 230 thousand the previous week.

----- Friday, Feb 9th -----
No major economic releases scheduled.

by Calculated Risk on 2/02/2018 04:26:00 PM

A few comments from Steven Kopits of Princeton Energy Advisors LLC on Feb 2, 2018:

• Total US oil rigs were up, +6 to 765

• Horizontal oil rigs were similarly up, +6 to 668
...
• The Permian took a breather this week, with no horizontal gains after last week’s large 12 rig addition
...
• The oil price softened this week, with the Brent spread falling under $4. The price outlook is accordingly bearish as we head into turnaround season for the refineries.

Click on graph for larger image.

CR note: This graph shows the US horizontal rig count by basin.

Graph and comments Courtesy of Steven Kopits of Princeton Energy Advisors LLC.

by Calculated Risk on 2/02/2018 02:00:00 PM

Here is another update of tracking employment during Presidential terms.  We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.

NOTE: Several readers have asked if I could add a lag to these graphs (obviously a new President has zero impact on employment for the month they are elected). But that would open a debate on the proper length of the lag, so I'll just stick to the beginning of each term.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter and George H.W. Bush only served one term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble, and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.

There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr Clinton (light blue) served for eight years without a recession.

Click on graph for larger image.

The first graph is for private employment only.

Mr. Trump is in Orange (just 12 months).

The employment recovery during Mr. G.W. Bush's (red) first term was sluggish, and private employment was down 804,000 jobs at the end of his first term.   At the end of Mr. Bush's second term, private employment was collapsing, and there were net 391,000 private sector jobs lost during Mr. Bush's two terms. 

Private sector employment increased by 20,964,000 under President Clinton (light blue), by 14,717,000 under President Reagan (dark red), 9,041,000 under President Carter (dashed green), 1,509,000 under President G.H.W. Bush (light purple), and 11,907,000 under President Obama (dark blue).

During the first 12 months of Mr. Trump's term, the economy has added 2,099,000 private sector jobs.

 A big difference between the presidencies has been public sector employment.  Note the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, and 2010. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).  However the public sector declined significantly while Mr. Obama was in office (down 266,000 jobs).

During the first 12 months of Mr. Trump's term, the economy has added 15,000 public sector jobs.

The third graph shows the progress towards the Trump goal of adding 10 million jobs over the next 4 years.

After 12 months of Mr. Trump's presidency, the economy has added 2,114,000 jobs, about 386,000 behind the projection.

by Calculated Risk on 2/02/2018 11:12:00 AM

During and following the 2007 recession, every month I posted a graph showing the percent jobs lost during the recession compared to previous post-WWII recessions.

Some people started calling this the "scariest jobs chart ever".  In 2009 it was pretty scary!

I retired the graph in May 2014 when employment finally exceeded the pre-recession peak.

I keep getting asked if I could post an update to the graph, and here it is through the January 2018 report.


This graph shows the job losses from the start of the employment recession, in percentage terms, compared to previous post WWII recessions.  Since exceeding the pre-recession peak in May 2014, employment is now 6.8% above the previous peak.

Note: I ended the lines for most previous recessions when employment reached a new peak, although I continued the 2001 recession too on this graph.  The downturn at the end of the 2001 recession is the beginning of the 2007 recession.  I don't expect a downturn for employment any time soon (unlike in 2007 when I was forecasting a recession).

by Calculated Risk on 2/02/2018 10:55:00 AM

The headline jobs number was above consensus expectations at 200 thousand, however the previously two months were revised down a combined 24 thousand.  Overall this was a strong report, with a nice pickup in wage growth.

Earlier: January Employment Report: 200,000 Jobs Added, 4.1% Unemployment Rate

In January, the year-over-year employment change was 2.114 million jobs. This has been generally trending down, but is still solid year-over-year growth.

Average Hourly Earnings

Click on graph for larger image.

This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. Note: There are also two quarterly sources for earnings data: 1) “Hourly Compensation,” from the BLS’s Productivity and Costs; and 2) the Employment Cost Index which includes wage/salary and benefit compensation.

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees.  Nominal wage growth was at 2.9% YoY in January.

Wage growth had been trending up, although the acceleration in wage growth slowed in 2017.

Part Time for Economic Reasons

From the BLS report:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 5.0 million in January. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

The number of persons working part time for economic reasons has been generally trending down, however the number increased slightly in January. The number working part time for economic reasons suggests a little slack still in the labor market.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.2% in January.

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.42 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.52 million in December

This is the lowest level since April 2008.

This is trending down, but remains a little elevated.

The headline jobs number was solid, and the unemployment rate unchanged at a low level, and wage growth picked up - overall a strong report and a continuation of multi-year trends.

by Calculated Risk on 2/02/2018 08:46:00 AM

From the BLS:

Total nonfarm payroll employment increased by 200,000 in January, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in construction, food services and drinking places, health care, and manufacturing.
...
The change in total nonfarm payroll employment for November was revised down from +252,000 to +216,000, and the change for December was revised up from +148,000 to +160,000. With these revisions, employment gains in November and December combined were 24,000 less than previously reported.
...
In January, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.74, following an 11-cent gain in December. Over the year, average hourly earnings have risen by 75 cents, or 2.9 percent.
...
[Annual Revision] In accordance with annual practice, the establishment survey data released today have been benchmarked to reflect comprehensive counts of payroll jobs for March 2017. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts jobs covered by the Unemployment Insurance (UI) tax system. ... The total nonfarm employment level for March 2017 was revised upward by 146,000 (+138,000 on a not seasonally adjusted basis, or +0.1 percent).
emphasis added

Click on graph for larger image.

The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes).

Total payrolls increased by 200 thousand in January (private payrolls increased 196 thousand).

Payrolls for November and December were revised down by a combined 24 thousand.

This graph shows the year-over-year change in total non-farm employment since 1968.

In January the year-over-year change was 2.114 million jobs.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was unchanged in January at 62.7%. This is the percentage of the working age population in the labor force.   A large portion of the recent decline in the participation rate is due to demographics.

The Employment-Population ratio was unchanged at 60.1% (black line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was unchanged in January at 4.1%. 

This was above the consensus expectations of 176,000 jobs, however the previous two months combined were revised down 24,000.

I'll have much more later ...

by Calculated Risk on 2/01/2018 07:31:00 PM

My January Employment Preview

Goldman: January Payrolls Preview

Friday:
• At 8:30 AM, Employment Report for January. The consensus is for an increase of 176,000 non-farm payroll jobs added in January, up from the 148,000 non-farm payroll jobs added in December. The consensus is for the unemployment rate to be unchanged at 4.1%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for February). The consensus is for a reading of 95.0, up from 94.4 in January.

by Calculated Risk on 2/01/2018 03:34:00 PM

Based on a preliminary estimate from AutoData, light vehicle sales were at a 17.1 million SAAR in January.

That is down 1.2% from January 2017, and down 3.8% from last month.


Click on graph for larger image.

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for January (red, light vehicle sales of 17.12 million SAAR  from AutoData).

This was below the consensus forecast of 17.3 million for January.

Note that the increase in sales at the end of 2017 was due to buying following the hurricanes.

Sales will probably decline again in 2018 after setting a new sales records in both 2015 and 2016.

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

Note: dashed line is current estimated sales rate.

by Calculated Risk on 2/01/2018 03:11:00 PM

A few brief excerpts from a note by Goldman Sachs economist Spencer Hill:

We estimate that nonfarm payrolls increased 205k in January, above consensus of +180k. Labor market fundamentals continue to appear solid, and we believe weather in the survey week improved sequentially from that of December, despite the “bomb cyclone” in the first week of the month.

We forecast a stable unemployment rate of 4.1% in tomorrow’s report ... We estimate average hourly earnings increased 0.2% month-over-month and 2.6% year-over-year ...
emphasis added