by Calculated Risk on 5/11/2010 01:23:00 PM

From the NY Times: Senate Backs One-Time Audit of Fed’s Bailout Role

The Senate on Tuesday voted unanimously to require a one-time audit of the Federal Reserve’s emergency actions during and after the 2008 financial crisis as part of broad legislation overhauling the nation’s financial regulatory system.

This is a one time audit (as opposed to the house bill), and would also require the Fed to release a list by Dec 1, 2010 of all of the institutions that received emergency assistance during the financial crisis.

by Calculated Risk on 5/11/2010 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 2.7 million job openings on the last business day of March 2010, the U.S. Bureau of Labor Statistics reported today. The job openings rate was unchanged over the month at 2.0 percent. The hires rate (3.3 percent) was little changed, and the separations rate (3.1 percent) was unchanged in March.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. The CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people.

The following graph shows job openings (purple), hires (blue), Total separations (include layoffs, discharges and quits) (red) and Layoff, Discharges and other (yellow) from the JOLTS.

Unfortunately this is a new series and only started in December 2000.

Click on graph for larger image in new window.

Notice that hires (blue) and separations (red) are pretty close each month. This is the level of turnover each month. Right now about 4 million people lose their jobs each month, and a little over 4 million are hired (this is the labor turnover in the economy).

When the hires (blue line) is above total separations (as in March), the economy is adding net jobs, when the blue line is below total separations, the economy is losing net jobs.

According to the JOLTS report, there were 4.242 million hires in March (SA), and 4.016 million total separations, or 226 thousand net jobs gained. The comparable CES report showed a gain of 230 thousand jobs in March (after revision).

Layoffs and discharges have declined sharply from early 2009 - and that is a good sign.

Hiring picked up in March, although the number of job openings is still very low, as is the turnover rate.

by Calculated Risk on 5/11/2010 08:52:00 AM

From NFIB: Small Business Optimism Index Improves in April

The National Federation of Independent Business Index of Small Business Optimism gained 3.8 points in April, rising to 90.6 and ending seven straight quarters of under 90 readings. The persistence of Index readings below 90 is unprecedented in survey history. Nine of the 10 Index components rose, particularly the outlook for general business conditions and sales, and one was unchanged. Still, job measures barely moved and capital expenditure plans were flat.

“The gains are a step in the right direction, but they are not enough to signal a solid recovery is in place,” said William Dunkelberg, NFIB chief economist. “Owners are feeling a little better about things, but not enough to turn them into concrete action.”

The outlook has improved, and sales and earnings have picked up some, but hiring is "bleak".

“What small businesses need are customers, giving them a reason to hire and make capital expenditures and borrow to support those activities,” said Dunkelberg. “Bottom line, the recovery will be sub-par in comparison to the recoveries we experienced following past severe recessions such as 1980-82."

Note: although the press release doesn't mention it, there is a heavy concentration of construction related businesses in the small business sector - and obviously that is one of the weakest areas.

by Calculated Risk on 5/10/2010 10:43:00 PM

Note: this is the employment section of the April survey that will be released Tuesday.

From the WSJ: At Small Businesses, Hiring Still Drags

April marked the 27th consecutive month in which small businesses either shed more or the same number of jobs that they added, according to a monthly survey to be released Tuesday by the National Federation of Independent Business, a trade group in Washington, D.C. Since July 2008, employment per firm has fallen steadily each quarter, logging the largest reductions in the survey's 35-year history. Going forward, more small-business owners say they plan to eliminate jobs compared with those that expect to create new jobs over the next three months.

And from the National Federation of Independent Business: Jobs Picture Still Bleak for Small Business

“The steep recession will unlikely be followed by a steep recovery, the numbers just aren’t moving in that direction. [said William C. Dunkelberg, chief economist for the National Federation of Independent Business] "April marks the 27th consecutive ‘no new jobs’ monthly reading."

“There is little enthusiasm among owners to hire more workers, primarily due to continued weak sales trends.”

by Calculated Risk on 5/10/2010 07:11:00 PM

Here is a 60 Minutes piece on Walking Away, aka 'Strategic Defaults' and as ' Ruthless Defaults' by lenders. (ht Michael).

Just a note - anyone considering this should talk to an attorney, and they should also talk with their lender. If it can be arranged, a short sale is much better than a foreclosure for all parties ...