by Calculated Risk on 11/22/2024 08:11:00 AM

The new administration is talking about cutting the number of federal government employees.

This raises the question of how many people are employed by the Federal government?

The following data is from the BLS and does not include military personnel.

The first graph shows total government employment (Federal, State and Local).

Click on graph for larger image.

First, most government employees are local (police officers, fire department, etc), followed by state employees.  There are almost 15 million local government employees and 5.5 million state government employees. 

Approximately half of the state and local employees work in education (teachers!)

The Federal government has about 3.0 million employees.  Note that the spikes in Federal employment are for decennial Census.

The second graph shows total Federal employees, and Federal employees excluding postal workers since 1960.

Once again, the spikes are the decennial Census!

Currently there are just over 600 thousand postal workers, and just under 2.4 million other federal employees.

The Federal government has outsourced some functions to the private sector.

The third graph shows Federal employment as a percent of total employment.

Federal employment was around 4.3% of total employment in 1960 and is now down to 1.9%.

Just some numbers and graphs to keep in mind during the discussion of federal employment cuts.

by Calculated Risk on 11/21/2024 09:13:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 10:00 AM ET, University of Michigan's Consumer sentiment index (Final for November).

by Calculated Risk on 11/21/2024 05:25:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For September, Realtor.com reported inventory was up 29.2% YoY, but still down 21.1% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 25.9% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending Nov. 16, 2024

• Active inventory increased, with for-sale homes 25.9% above year-ago levels

For the 54th consecutive week, the number of homes for sale has increased compared with the same time last year. However, this week’s growth was smaller than last week’s, marking the eighth consecutive week of deceleration and the smallest annual increase since late March.

• New listings—a measure of sellers putting homes up for sale—climbed 3.5% this week compared with one year ago

The number of newly listed homes saw a slight uptick compared with the same week last year, offering a glimmer of hope for buyers seeking fresh inventory. However, the recent climb in mortgage rates might deter many potential sellers from entering the market, particularly those locked into lower rates who are hesitant to trade up to higher borrowing costs.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 54th consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels.

by Calculated Risk on 11/21/2024 02:15:00 PM

From ICE: ICE First Look at Mortgage Performance: Serious delinquencies hit 17-month high while foreclosure activity remains historically muted

• At 3.45% in October, the national delinquency rate was up 6% from the same time last year, marking five consecutive months of year-over-year increases

• While 30- & 60-day delinquencies decreased from September, seriously past due loans (90+ days) continued their slow rise, now up 7.3% from last year and at the highest level since May 2023

• Though both foreclosure starts (+12.2%) and completions (+10.1%) were up in October, both remain down from last year (-12.3% and -9.5%, respectively) and well below pre-pandemic levels

• Likewise, foreclosure inventory was up a modest +1K in the month, but there are 28K fewer loans in active foreclosure than there were at this same time last year

• Prepayment activity rose on easing interest rates to a level not seen in over two years (May 2022) and nearly double where it was last October
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 11/21/2024 10:51:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Increased to 3.96 million SAAR in October

Excerpt:

As expected, existing home sales were up year-over-year for the first time since 2021. This was a combination of weak sales in October last year and lower mortgage rates in August and September when contracts were signed (Existing home sales are reported at closing).
...
The sales rate was above the consensus forecast (but at housing economist Tom Lawler’s estimate).
...
Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2023 and 2024.

Sales increased 2.9% year-over-year compared to October 2023. This was the first year-over-year increase since July 2021.

by Calculated Risk on 11/21/2024 10:00:00 AM

From the NAR: Existing-Home Sales Grew 3.4% in October; First Year-Over-Year Gain Since July 2021

Existing-home sales rose in October, according to the National Association of REALTORS®. Sales improved in all four major U.S. regions. Year-over-year, sales elevated in three regions but were unchanged in the Northeast.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – expanded 3.4% from September to a seasonally adjusted annual rate of 3.96 million in October. Year-over-year, sales progressed 2.9% (up from 3.85 million in October 2023).
...
Total housing inventory registered at the end of October was 1.37 million units, up 0.7% from September and 19.1% from one year ago (1.15 million). Unsold inventory sits at a 4.2-month supply at the current sales pace, down from 4.3 months in September but up from 3.6 months in October 2023.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in October (3.96 million SAAR) were up 3.4% from the previous month and were 2.9% above the October 2023 sales rate.  This was the first year-over-year increase since July 2021.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.37 million in October from 1.36 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 19.1% year-over-year (blue) in October compared to October 2023.

Months of supply (red) decreased to 4.2 months in October from 4.3 months the previous month.

The sales rate was above the consensus forecast.  I'll have more later. 

by Calculated Risk on 11/21/2024 08:30:00 AM

The DOL reported:

In the week ending November 16, the advance figure for seasonally adjusted initial claims was 213,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 217,000 to 219,000. The 4-week moving average was 217,750, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised up by 500 from 221,000 to 221,500.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 217,750.

The previous week was revised up.

Weekly claims were below the consensus forecast.

by Calculated Risk on 11/20/2024 08:18:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 222 thousand initial claims, up from 217 thousand last week.

• Also at 8:30 AM, the Philly Fed manufacturing survey for November. The consensus is for a reading of 5.0, down from 10.3.

• At 10:00 AM, Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 3.88 million SAAR, up from 3.84 million in September.

• At 11:00 AM, the Kansas City Fed manufacturing survey for November.

by Calculated Risk on 11/20/2024 02:33:00 PM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for 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).

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

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic increased 2.2% in October compared to the rolling 12 months ending in August.   Outbound traffic increased 0.9% compared to the rolling 12 months ending the previous month.

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

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday and then decline sharply and bottom in the Winter depending on the timing of the Chinese New Year.  

Imports were up 29% YoY in October, and exports were up 11% YoY.    

This was a very strong July through October period for imports as retailers prepare for holiday shopping - and likely to stockpile goods prior to the increase in tariffs. 

by Calculated Risk on 11/20/2024 12:35:00 PM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: ABI October 2024: Business conditions at architecture firms begin to moderate

The AIA/Deltek Architecture Billings Index (ABI) score for the month was 50.3, meaning that the share of firms that reported declining billings was essentially equal to the share of firms that reported increasing billings. In addition, inquiries into new projects ticked up in October to the highest level in six months. However, despite declining interest rates and softening inflation, clients remain hesitant to start new projects. The value of newly signed design contracts softened further in October, as they declined for the seventh consecutive month. Responding firms this month indicated that many clients were still awaiting the outcomes of the November elections, at both a national and more local level, before determining how to proceed on new projects.

Business conditions varied significantly across the country in October. While firms located in the Northeast saw billings decline further from September, firms located in the South reported billings growth for the first time in two years. And while billings continued to decline at firms located in the Midwest and West, the pace of the decline in those regions slowed from recent months. Conditions also varied at firms of different specializations this month. Firms with an institutional specialization saw slight billings growth for the first time since January, while business conditions remained softer at firms with multifamily residential and commercial/industrial specializations.
...
The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.
emphasis added

• Northeast (45.6); Midwest (46.9); South (52.1); West (47.6)

• Sector index breakdown: commercial/industrial (47.0); institutional (50.5); multifamily residential (45.6)

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 50.3 in October, up from 45.7 in September.  Anything above 50 indicates an increase in demand for architects' services.

This index has indicated contraction for 23 of the last 25 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment into 2025.

Note that multi-family billing turned down in August 2022 and has been negative for twenty-seven consecutive months (with revisions).   This suggests we will see a further weakness in multi-family starts.