by Calculated Risk on 3/31/2010 10:56:00 AM

This is one of several industry specific indexes I track each month.

Click on graph for larger image in new window.

The current situation for restaurants is still weak, but the index improved because of the outlook for sales growth, capital spending plans, and staffing levels.

Unfortunately the data for this index only goes back to 2002.

Note: Any reading below 100 shows contraction for this index.

From the National Restaurant Association (NRA): Positive Outlook Pushes Restaurant Performance Index To Highest Level in More Than Two Years

[T]the National Restaurant Association’s Restaurant Performance Index (RPI) rose to ... 99.0, up 0.7 percent from January and its strongest level since November 2007.

“The RPI’s strong gain in February was the result of broad-based improvements among the forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators’ optimism for sales growth stood at its strongest level in 29 months, with capital spending plans also rising to a two-year high.”

“In addition, restaurant operators reported a positive outlook for staffing gains for the first time in more than two years,” Riehle added. “This bodes well for replacing the more than 280,000 eating and drinking place jobs lost during the recession.”
...
Restaurant operators reported negative same-store sales for the 21st consecutive month in February, with the overall results similar to the January performance.
...
Customer traffic also remained soft in February, as restaurant operators reported net negative traffic for the 30th consecutive month.
...
Along with continued soft sales and traffic performances, capital spending activity continued to drop off.
emphasis added

by Calculated Risk on 3/31/2010 08:55:00 AM

The MBA reports: Mortgage Refinance Applications Increase in Latest MBA Weekly Survey

The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. ...

“Purchase applications have increased over the past month, and are now at their highest level since last October when many homebuyers were rushing to get loans closed before the expected expiration of the homebuyer tax credit,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “We may be seeing a similar pattern now, as the extended version of the tax credit ends next month.”

The Refinance Index decreased 1.3 percent from the previous week and the seasonally adjusted Purchase Index increased 6.8 percent from one week earlier. This is the highest Purchase Index since the week ending October 30, 2009. ...

The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.0 percent the previous week. This is the lowest refinance share recorded in the survey since the week ending October 23, 2009. ...

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.04 percent from 5.01 percent, with points increasing to 1.07 from 0.76 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Click on graph for larger image in new window.

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

The recent uptick in purchase applications is probably related to buyers trying to beat the expiration of the tax credit.

I've heard from some real estate agents that activity seems to have picked up, more than the normal seasonal increase, and the MBA data would seem to suggest this is happening. However I expect any increase in activity this year to be less than the increase last year.

by Calculated Risk on 3/31/2010 08:15:00 AM

ADP reports:

Nonfarm private employment decreased 23,000 from February to March on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from January 2010 to February 2010 was revised down slightly, from a decline of 20,000 to a decline of 24,000.

The March employment decline was the smallest since employment began falling in February of 2008. Yet, the lack of improvement in employment from February to March is consistent with the pause in the decline of initial unemployment claims that occurred during the winter.

Since employment as measured by the ADP Report was not restrained in February by the effects of inclement weather, today’s figure does not incorporate a weather-related rebound that could be present in this month’s BLS data. In addition, today’s figure does not include any federal hiring in March for the 2010 Census. For both these reasons, it is reasonable to expect that Friday’s employment figure from the BLS will be stronger than today’s estimate in the ADP National Employment Report.

Note: ADP is private nonfarm employment only (no government jobs).

This is far below the consensus forecast of an increase of 40,000 private sector jobs in March.

The BLS reports on Friday, and the consensus is for an increase of 200,000 payroll jobs in March, on a seasonally adjusted (SA) basis, because of Census 2010 hiring and a bounce back from the snow storms. The underlying trend will be much lower ...

by Calculated Risk on 3/30/2010 11:58:00 PM

The BLS will host a live chat on Friday starting at 9:30 AM ET.

You can submit questions in advance here or submit questions during the event. I'm planning on posting the event on the blog (I'm not involved), so you can (hopefully) read the Q&A and ask questions from the blog on Friday morning.

I sent an advance question asking how we should adjust the seasonally adjusted headline payroll number for the NSA 2010 Census hiring data to try to determine the underlying trend (not counting the snow storms!).

Friday, April 2, 2010 from 9:30 to 10:30 a.m. EDT. From the BLS: "BLS subject matter experts will take your questions on national employment and unemployment data, with a particular focus on the figures for March that will be released that morning at 8:30 a.m. EDT."

by Calculated Risk on 3/30/2010 08:51:00 PM

Building gated communities for young families in exurbia was a great idea ...

From Alana Semuels at the LA Times: From bucolic bliss to 'gated ghetto'

The 427-home Willowalk tract, built by developer D.R. Horton, featured eight distinct "villages" within its block walls. Along with spacious homes, Willowalk boasted four lakes, a community pool and clubhouse. Fanciful street names such as Pink Savory Way and Bee Balm Road added to the bucolic image.
...
Home foreclosures have devastated neighborhoods throughout the country, but the transformation from suburban paradise to blighted community has been especially stark in places like Willowalk -- isolated developments on the far fringes of metropolitan areas that found ready buyers when home prices were soaring but then saw an exodus as values crashed.

Vacant homes are sprinkled throughout Willowalk, betrayed by foot-high grass. Others are rented, including some to families that use government Section 8 vouchers to live in homes with granite countertops and vaulted ceilings.
...
The contrast between occupied and empty houses is evident on one block, where high grass in weedy clumps gives way to a neatly mowed lawn with handwritten signs pleading "Please do not let your dog poop on our yard."