by Calculated Risk on 6/14/2010 03:54:00 PM

Over the last year a number of analysts have predicted the Fed would raise the Fed Funds rate "soon". They have all been wrong.

The Fed's mission is to conduct "monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates". Historically the Fed has not raised the Fed Funds rate until unemployment drops significantly. Based on the the Fed's own forecasts of the unemployment rate and inflation, the Fed will probably not raise the Fed Funds rate until late 2011 at the earliest.

San Francisco Fed senior vice president and associate director of research Glenn Rudebusch writes: The Fed's Exit Strategy for Monetary Policy

Rudebusch's economic letter suggests that the Fed might not raise rates until 2012 ...

Click on graph for larger image in new window.

The graph from Rudebusch's shows a modified Taylor rule. According to Rudebusch's estimate, the Fed Funds rate should be around minus 5% right now if we ignore unconventional policy (obviously there is a lower bound):

The resulting simple policy guideline recommends lowering the funds rate by 1.3 percentage points if inflation falls by 1 percentage point and by almost 2 percentage points if the unemployment rate rises by 1 percentage point.
...
Figure 1 also provides a simple perspective on when the Fed should raise the funds rate. The dashed line combines the benchmark rule of thumb with the Federal Open Market Committee’s median economic forecasts (FOMC 2010), which predict slowly falling unemployment and continued low inflation. The dashed line shows that to deliver future monetary stimulus consistent with the past—and ignoring the zero lower bound—the funds rate would be negative until late 2012. In practice, this suggests little need to raise the funds rate target above its zero lower bound anytime soon.

Rudebusch them modifies the rule taking into account unconventional policy.

Even though the funds rate was pushed to its zero lower bound by the end of 2008, considerable scope remained to lower long-term interest rates. To do this, the Fed started buying longer-term Treasury and federal agency debt securities ...

The additional stimulus from the Fed’s unconventional monetary policy implies that the appropriate level of short-term interest rates would be higher than shown in Figure 1. ... If the Fed’s purchases reduced long rates by ½ to ¾ of a percentage point, the resulting stimulus would be very roughly equal to a 1½ to 3 percentage point cut in the funds rate. Assuming unconventional policy stimulus is maintained, then the recommended target funds rate from the simple policy rule could be adjusted up by approximately 2¼ percentage points, as shown in Figure 3, and the recommended period of a near-zero funds rate would end at the beginning of 2012.

Perhaps the unemployment rate will decline faster than expected - or inflation will increase - but right now I wouldn't expect an increase in the Fed Funds rate for a long long time ...

by Calculated Risk on 6/14/2010 01:21:00 PM

From MarketWatch: Moody's slashes Greece to 'Ba1' from 'A3'

Moody's Investors Service on Monday downgraded Greece's government bond ratings by four notches to junk status of Ba1 from A3 ...

No real surprise ...

by Calculated Risk on 6/14/2010 11:03:00 AM

From Bloomberg: Economy in U.S. Slows as States Lose Federal Stimulus Funds (ht Brian)

State and local cutbacks may trim growth by about a quarter percentage point in 2010 and 2011 ... said Mark Zandi, chief economist at Moody’s Analytics Inc. He also sees the governments lopping payrolls by 200,000 during the next year after reducing them by 190,000 in the 12 months through May.

“The budget cutting that is dead ahead will be a significant impediment to economic growth later this year into 2011,” he said in an interview.

I've been forecasting a 2nd half slowdown in GDP growth based on:

1) less Federal stimulus spending in the 2nd half of 2010. The decline in stimulus will probably be a drag of about 0.5% on GDP growth by Q4.

2) the end of the inventory correction. The inventory adjustment contributed 3.8% in Q4 2009 of the 5.6% annualized growth rate, and 1.65% of the 3.0% GDP growth (annualized) in Q1 2010. This will probably fall to zero - or even subtract from growth.

3) more household saving leading to slower growth in personal consumption expenditures,

4) another downturn in housing (lower prices, less residential investment),

5) slowdown in China and Europe and

6) cutbacks at the state and local level. According the Mark Zandi, this will subtract about 0.25% from GDP growth.

David Rosenberg of Gluskin Sheff + Associates wrote this morning:

"A double-dip, admittedly, is not yet a sure thing but I am definitely warming to the view."

I still think we will avoid a double dip, but I expect growth to be sluggish and choppy.

A quarter point here, and half point there ... and pretty soon you have some real drag.

by Calculated Risk on 6/14/2010 09:02:00 AM

The Bank for International Settlements (BIS) put out the BIS Quarterly Review, June 2010 yesterday. As part of the review, the BIS estimated the exposures of banks by nationality to the residents of Greece, Ireland, Portugal and Spain:

As of 31 December 2009, banks headquartered in the euro zone accounted for almost two thirds (62%) of all internationally active banks’ exposures to the residents of the euro area countries facing market pressures (Greece, Ireland, Portugal and Spain). Together, they had $727 billion of exposures to Spain, $402 billion to Ireland, $244 billion to Portugal and $206 billion to Greece (Graph 3).

French and German banks were particularly exposed to the residents of Greece, Ireland, Portugal and Spain. At the end of 2009, they had $958 billion of combined exposures ($493 billion and $465 billion, respectively) to the residents of these countries. This amounted to 61% of all reported euro area banks’ exposures to those economies. French and German banks were most exposed to residents of Spain ($248 billion and $202 billion, respectively), although the sectoral compositions of their claims differed substantially. French banks were particularly exposed to the Spanish non-bank private sector ($97 billion), while more than half of German banks’ foreign claims on the country were on Spanish banks ($109 billion). German banks also had large exposures to residents of Ireland ($177 billion), more than two thirds ($126 billion) of which were to the non-bank private sector.

French and German banks were not the only ones with large exposures to residents of euro area countries facing market pressures. Banks headquartered in the United Kingdom had larger exposures to Ireland ($230 billion) than did banks based in any other country. More than half of those ($128 billion) were to the non-bank private sector. UK banks also had sizeable exposures to residents of Spain ($140 billion), mostly to the non-bank private sector ($79 billion). Meanwhile, Spanish banks were the ones with the highest level of exposure to residents of Portugal ($110 billion). Almost two thirds of that exposure ($70 billion) was to the non-bank private sector.

Click on graph for larger image in new window.

This graph shows the exposure of bank by nationality to the risky countries.

The bailout of the risky countries is very much a bailout of the banks - especially the banks of Germany and France.

The BIS puts the numbers in perspective:

The exposures of BIS reporting banks to the public sectors of the euro area countries facing market pressures can be put into perspective by comparing them with these banks’ capital. The combined exposures of German, French and Belgian banks to the public sectors of Spain, Greece and Portugal amounted to 12.1%, 8.3% and 5.0%, respectively, of their joint Tier 1 capital. By comparison, the combined exposures of Italian, Dutch and Swiss banks to the same public sectors were equal to 2.8%, 2.7% and 2.0%, respectively, of their Tier 1 capital. Those ratios stood at 3.4%, 1.2% and 0.7%, respectively, for Japanese banks and 2.0%, 0.8%, and 0.7%, respectively, for UK banks. The exposures of US banks to each of the above public sectors amounted to less than 1% of their Tier 1 capital.

It is the German and French banks that are most at risk.

by Calculated Risk on 6/13/2010 09:15:00 PM

Here is the Weekly Summary and a Look Ahead

From Kim Murphy at the LA Times: As businesses collapse, claimants still waiting for checks from BP

Across the gulf, residents already shellshocked by the tar balls, oil soup and dead sea life washing up on their beaches are now getting hit with a second wave: the sudden collapse of their livelihoods, and the equally intimidating challenge of getting BP to pay for it.
...
Hotels, restaurants, machine shops, bars, tour companies all became collateral damage when the Gulf of Mexico ... became an industrial cleanup site.

One real estate agent said his "phone quit ringing a month ago", but is that because of the oil gusher or other factors? This will takes years to sort out ...

by Calculated Risk on 6/13/2010 05:31:00 PM

From Neal Boudette and Sharon Terlep at the WSJ: Auto-Sales Optimism Fades

According to AutoData, light vehicle sales were up 17.2% over the first five months of 2010 - compared to the same period in 2009. This was an increase from 3.95 million to 4.63 million cars and light trucks.

However - according to Boudette and Terlep - fleet sales were up 32% during the first five months, and sales to individuals were only up 13%.

And without individual buyers it will be hard to maintain sales growth.

George Pipas, the top sales analyst at Ford Motor Co., said he is seeing evidence that consumers are deferring decisions on major purchases, in large part because home values and income growth haven't rebounded.

"These are two things that really have to happen before you will see auto sales move up more significantly," Mr. Pipas said.

It will be sometime before home values increase significantly (I expect further price declines later this year), and income growth in most industries will be muted with high unemployment. So we should probably expect the growth in auto sales to slow significantly.

by Calculated Risk on 6/13/2010 11:59:00 AM

Two housing related reports will be released this week: the NAHB builder confidence survey on Tuesday and housing starts on Wednesday.

On Tuesday, the June Empire State manufacturing survey will be released at 8:30 AM. The consensus is for a slight increase from the May reading. Also on Tuesday, the June NAHB homebuilder survey will be released at 10 AM. The consensus is for about the same level as May.

Also on Tuesday, St. Louis Fed President James Bullard will speak on "Getting Serious About Asset Bubbles and Monetary Policy" in Hong Kong at 6:15 AM ET.

On Wednesday, Housing Starts for May will be released at 8:30 AM. The consensus is for a 3.3% decrease to 650K (SAAR) in May from 672K in April. Based on the sharp decline for permits in April, starts might fall even further in May (I'll take the under this month). Also at 8:30 AM, the BLS will release the Producer Price Index (PPI) for May. The consensus is for a decrease of 0.5%.

Also on Wednesday, the MBA will release the mortgage purchase applications index. This has been falling sharply suggesting a sharp decline in home sales after the expiration of the tax credit. And the Federal reserve will release the May Industrial Production and Capacity Utilization report at 9:15 AM. Expectations are for production to increase 1% and capacity utilization to increase to 74.5% (the highest levels since late 2008).

On Thursday, the May Consumer Price Index (CPI) will be released at 8:30 AM. The consensus is for a 0.2% decrease in prices. Also on Thursday, the closely watched initial weekly unemployment claims will be released. Consensus is for a decline to 450K from 456K last week. Also on Thursday, the Philly Fed survey and the Conference Board's index of leading indicators will both be released at 10 AM.

And on Friday, the BLS will release the Regional and State Employment and Unemployment report for May at 10 AM. And of course the FDIC will probably have another busy Friday afternoon ...

And a summary of last week:

Retail Sales decline in May

On a monthly basis, retail sales decreased 1.2% from April to May (seasonally adjusted, after revisions), and sales were up 6.9% from May 2009 (easy comparison).

Click on graph for larger image in new window.

This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline).

The red line shows retail sales ex-gasoline and shows the increase in final demand ex-gasoline has been sluggish.

Retail sales are up 8% from the bottom, but still off 4.6% from the pre-recession peak.

Mortgage Purchase Applications decline 35% over last four weeks

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

The purchase index has collapsed following the expiration of the tax credit suggesting home sales will fall sharply too. This is the lowest level for the purchase index since February 1997. From the MBA:

“Purchase and refinance applications dropped this week, even after an adjustment for the Memorial Day holiday. Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.

Rail Traffic Softens in May

The Association of American Railroads reported traffic in May 2010 was up 15.8% compared to May 2009 - and traffic was still 11.8% lower than in May 2008.

This graph shows U.S. average weekly rail carloads. Traffic increased in 18 of 19 major commodity categories YoY.

From AAR:

U.S. railroads averaged 294,758 carloads per week in April 2010 and 288,793 in March 2010. Thus, May 2010’s average was actually down slightly from those months ... One month does not a trend make, but it would obviously be worrisome if the decline continued.

Trade Deficit increases slightly in April

The Census Bureau reports:

[T]otal April exports of $148.8 billion and imports of $189.1 billion resulted in a goods and services deficit of $40.3 billion, up from $40.0 billion in March, revised. April exports were $1.0 billion less than March exports of $149.8 billion. April imports were $0.8 billion less than March imports of $189.9 billion.

This graph shows the U.S. trade deficit, with and without petroleum, through April.

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.

Although both imports and exports were off slightly in April, both have been increasing sharply - but are still below the pre-crisis levels. Once again China and oil are the major contributors to the trade deficit.

Other Economic Stories ...

From NFIB: Small Business Optimism Increases But Not Enough to Spur Hiring, Capital Spending

BLS: Low Labor Turnover, Job Openings Increase in April

Fed Chairman Bernanke's testimony before the House Budget Committee: Economic and financial conditions and the federal budget

From the Federal Reserve: Beige book "modest" economic growth, "Shadow" inventory of Foreclosed Homes

UCLA Anderson Forecast and Ceridian Corporation index using real-time diesel fuel consumption data: PCI Strikes Optimistic Note For U.S. Economy with 3.1 Percent Gain in May

From the Financial Times: FBI to target mortgage fraud

Manufacturing and Trade Inventory-to-Sales Ratio: Inventory Adjustment Over

Unofficial Problem Bank List: 760 Institutions

Best wishes to all.

by Calculated Risk on 6/13/2010 08:13:00 AM

From Jackie Calmes and Sheryl Gay Stolberg at the NY Times: Obama Presses for Aid to Cities and States

President Obama on Saturday implored Congress to provide more aid to states and cities to blunt “the devastating economic impact of budget cuts” by local governments that imperil the jobs of teachers, the police, firefighters and other public employees.

In a letter to Democratic and Republican Congressional leaders, Mr. Obama said the “mounting employment crisis” in the states “could set back the pace of our economic recovery.” ... education secretary, Arne Duncan, has said that without federal aid, up to 300,000 fewer teachers would be in classrooms this fall ...

The WaPo quotes Obama as writing there will be "massive layoffs of teachers, police and firefighters" without the additional funds.

by Calculated Risk on 6/12/2010 10:11:00 PM

Just an update on H.R. 5072: FHA Reform Act of 2010

The bill passed in the house 406-4. This bill has several provisions, but a key for the housing market is the increase in the maximum annual premium payments for mortgage insurance.

The current maximum is an annual premium of 0.50% of the outstanding principal balance for loans with the original principal obligation under 95% LTV, and 0.55% for loans with the original principal obligation over 95% LTV.

This legislation will increase the maximums to 1.50% and 1.55% respectively.

The proposed effective date is September 30, 2010. There is no senate version yet.

by Calculated Risk on 6/12/2010 04:09:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for June 11, 2010.

Changes and comments from surferdude808:

Extremely quiet week for the Unofficial Problem Bank List as the OCC did not release its actions for May. No doubt that will happen next week.

Only three changes to report. There were two removals -- the failed Washington First International Bank ($521 million) and an action termination by the OCC against Mission Oaks National Bank ($187 million Ticker: MOKB).

The other change is an updated Prompt Corrective Action against Imperial Savings and Loan Association ($9.6 million).

The Unofficial Problem Bank List stands at 760 institutions with aggregate assets of $385 billion.

CR Note: A special thanks to surferdude808 for tracking all the institutions and compiling this list (no one else is doing this).

by Calculated Risk on 6/12/2010 01:15:00 PM

Note: This is not Mortgage Equity Withdrawal (MEW) data from the Fed. The last MEW data from Fed economist Dr. Kennedy was for Q4 2008. My thanks to Jim Kennedy and the other Fed contributors for the previous MEW updates. For those interested in the last Kennedy data, here is a post, and the spreadsheet from the Fed is available here.

The following data is calculated from the Fed's Flow of Funds data and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity (hence the name "MEW", but there is very little MEW right now!), normal principal payments and debt cancellation.

Click on graph for larger image in new window.

For Q1 2010, the Net Equity Extraction was a record low of minus $122 billion, or a negative 4.4% of Disposable Personal Income (DPI). This is not seasonally adjusted.

This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method.

The Fed's Flow of Funds report showed that the amount of mortgage debt outstanding declined sharply in Q1, and this was probably mostly because of debt cancellation per foreclosure sales, and some from modifications, and partially due to homeowners paying down their mortgages as opposed to borrowing more. Note: most homeowners pay down their principal a little each month unless they have an IO or Neg AM loan, so with no new borrowing, equity extraction would always be slightly negative.

Mark Whitehouse at the WSJ argues: Default, Not Thrift, Pares U.S. Debt

The falling debt burden conjures up images of a nation seeking to repent after a decade of profligacy, conscientiously paying down mortgages and credit-card balances. That may be true in some cases, but it’s not the norm. In fact, people are making much more progress in shedding their debts by defaulting on mortgages and reneging on credit cards.

I think that is correct - most of the decline in mortgage debt outstanding is probably because of debt cancellations via foreclosures, short sales, and some modifications.

by Calculated Risk on 6/12/2010 08:38:00 AM

From Danny Hakim at the NY Times: New York Plan Makes Fund Both Borrower and Lender (ht jb)

Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

Oh my ...

by Calculated Risk on 6/12/2010 12:49:00 AM

Since we all need a laugh ...

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Spilling Fields - BP Ad Campaign
www.thedailyshow.com

by Calculated Risk on 6/11/2010 08:11:00 PM

Absorbent Bankers
Sucked up TARP funds like sponges
Wrung dry by losses
by Soylent Green is People
From the FDIC: East West Bank, Pasadena, California, Assumes All of the Deposits of Washington First International Bank, Seattle, Washington

As of March 31, 2010, Washington First International Bank had approximately $520.9 million in total assets and $441.4 million in total deposits. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $158.4 million. .... Washington First International Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the seventh in Washington. The last FDIC-insured institution closed in the state was Frontier Bank, Everett, on April 30, 2010.

It wouldn't be Friday without a bank failure ...

by Calculated Risk on 6/11/2010 06:20:00 PM

No one could have predicted ...

James Hagerty at the WSJ has the story: Tax Credit Extension Could Help Tax Cheaters. Hagerty discusses comments from two real estate agents: Glenn Kelman, chief executive of Redfin Corp. who noted that some customers who signed contracts after April 30th were pushing to close by June 30th. Kelman suspects fraud. And Schahrzad Berkland, an agent for Fidelity Pacific Real Estate in San Diego who noticed that pending sales for April have continued to rise ... something that is very odd. (Note to FBI: more fraud for you guys!)

I noted yesterday: "I'm sure some people will commit fraud and backdate documents."

Extending the closing date will encourage even more fraud. All the mortgage lenders have been giving priority to purchase applications over refinance applications, and 60 days is more than enough time.

If short sales are a problem, then make the extension very narrow - a 30 day extension for short sales, with the servicer processing the short sale certifying that it was 1) a short sale and 2) that they were in possession of a signed contract by April 30th (with a significant penalty for a false statement).

Otherwise this extension should be titled the "Housing Tax Credit Fraud Extension Amendment". Geesh ...

by Calculated Risk on 6/11/2010 03:58:00 PM

Notes: this data is not seasonally adjusted. There is a very distinct seasonal pattern for imports, but not for exports. LA area ports handle about 40% of the nation's container port traffic.

Sometimes port traffic gives us an early hint of changes in the trade deficit. The following graph shows the 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.

Click on graph for larger image in new window.

Loaded inbound traffic was up 18.3% compared to May 2009. Inbound traffic was still down 5% vs. two years ago (May 08).

Loaded outbound traffic was up 9.4% from May 2009. Just as with imports, exports are still off from 2 years ago (off 7.3%).

For imports there is usually a significant dip in either February or March, depending on the timing of the Chinese New Year, and then usually imports increase until late summer or early fall as retailers build inventory for the holiday season. So this increase in May imports is part of the normal seasonal pattern.

Based on this data, it appears the trade deficit with Asia increased in May. Once again it appears imports are increasing faster than exports and the pre-crisis global imbalances have returned.

by Calculated Risk on 6/11/2010 01:20:00 PM

From the Financial Times: FBI to target mortgage fraud

The FBI is preparing to arrest hundreds of people across the US as early as next week for offences including encouraging borrowers to falsify income on mortgage applications, misleading home owners about foreclosure rescue programmes, and inflating home appraisals ... The FBI is scheduled to release its 2009 mortgage report on June 17.
excerpt with permission

The FBI usually only arrests people engaged in fraud for profit and not fraud for housing - they typically don't arrest borrowers who misrepresented their income - they arrest mortgage brokers who encouraged people to falsify their income. Although the distinction was blurred during the bubble ...

Tanta wrote a great piece on this in 2007: Unwinding the Fraud for Bubbles

There is a tradition in the mortgage business of distinguishing between two major types of mortgage fraud, called “Fraud for Housing” and “Fraud for Profit.” The former is the borrower-initiated fraud—inflating income or assets, lying about employment, etc.—that is motivated by the borrower’s desire to get housing (not the same thing as “real estate”), by means of getting a loan he or she doesn’t actually qualify for. ...

Fraud for profit is simply someone trying to extract cash—not housing—out of the transaction somewhere. ...

The problem with this traditional distinction is that, recently, we seem to have an epidemic of predator meeting predator and forming an alliance: a borrower willing to commit fraud for housing meets up with a seller or lender willing to commit fraud for profit, and the thing gets jacked up to a whole new level of nastiness.

The FBI will probably be busy for years.

Here is another scam in Florida from Sally Kestin at the Sun Sentinel: Squatters take over S. Fla. homes in what police call latest fraud in housing crisis (ht Ray).

by Calculated Risk on 6/11/2010 10:00:00 AM

The Manufacturing and Trade Inventories and Sales report from the Census Bureau today showed that the inventory adjustment is over:

Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,354.3 billion, up 0.4 percent (±0.1%) from March 2010, but down 2.8 percent (±0.3%) from April 2009.

Inventories/Sales Ratio. The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.23. The April 2009 ratio was 1.43.

Click on graph for larger image in new window.

This graph shows the inventory to sales ratio. This has declined sharply to 1.23 (SA) from the peak of 1.48 back in Jan 2009. This could decline further - the trend is definitely down over time - but clearly the inventory adjustment is over.

This is important because the change in inventory added significantly to Q4 GDP growth and some to Q1 GDP. See BEA line 13: the contribution to GDP in Q4 2009 from 'Change in private inventories' was 3.79 of the 5.9 percent annualized increase in Q4 GDP. In Q1 2010. the 'change in private inventories' was 1.65 of the 3.0 percent annualized increase.

Any boost to Q2 GDP from inventory changes will be minor.

It now appears the inventory adjustment is over. Further growth in inventories will depend on increases in underlying demand. This is part of the 2nd half slowdown forecast.

by Calculated Risk on 6/11/2010 08:30:00 AM

On a monthly basis, retail sales decreased 1.2% from April to May (seasonally adjusted, after revisions), and sales were up 6.9% from May 2009 (easy comparison).

Click on graph for larger image in new window.

This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline).

The red line shows retail sales ex-gasoline and shows the increase in final demand ex-gasoline has been sluggish.

Retail sales are up 8% from the bottom, but still off 4.6% from the pre-recession peak.

The second graph shows the year-over-year change in retail sales (ex-gasoline) since 1993.

Retail sales ex-gasoline increased by 5.6% on a YoY basis (6.9% for all retail sales). The year-over-year comparisons are easy now since retail sales collapsed in late 2008. Retail sales bottomed in December 2008.

Here is the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $362.5 billion, a decrease of 1.2 percent (±0.5%) from the previous month, but 6.9 percent (±0.7%) above May 2009.

This is just one month, but this is a weak report.

by Calculated Risk on 6/10/2010 11:59:00 PM

From Dina ElBoghdady at the WaPo: Bill would extend home buyers' deadline for tax credit

Home buyers hoping to take advantage of a lucrative federal tax credit would get three extra months to complete their purchases under a proposal introduced in the Senate on Thursday.

I've wasted enough posts explaining why this was a poor use of taxpayers' money .. but a three month extension to close? Geesh ... that is ridiculous.