by Calculated Risk on 3/17/2011 09:15:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production declined 0.1 percent in February after having risen 0.3 percent in January; output in January was previously estimated to have edged down 0.1 percent. Manufacturing output increased 0.4 percent in February, and the gain in January was revised up to 0.9 percent. Outside of manufacturing, the output of mines rose 0.8 percent in February, which more than reversed its decline in January. However, the output of utilities fell 4.5 percent--the drop reflected unseasonably warm weather in February, which reduced the demand for heating after two months of unseasonably cold temperatures. At 95.5 percent of its 2007 average, total industrial production was 5.6 percent above its year-earlier level. The capacity utilization rate for total industry edged down 0.1 percentage point to 76.3 percent, a rate 4.2 percentage points below its average from 1972 to 2010.

Click on graph for larger image in graph gallery.

This graph shows Capacity Utilization. This series is up 8.1 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 76.3% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased in February to 95.5, however January was revised up from 95.1 to 95.6. The decline was due to warmer weather in February (less production at utilities) and the upward revision to the January data.

Production is still 5.2% below the pre-recession levels at the end of 2007.

The consensus was for a 0.6% increase in Industrial Production in February, and an increase to 76.5% (from 76.1%) for Capacity Utilization. Even including the January revisions, this was still below consensus.

by Calculated Risk on 3/17/2011 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending March 12, the advance figure for seasonally adjusted initial claims was 385,000, a decrease of 16,000 from the previous week's revised figure of 401,000. The 4-week moving average was 386,250, a decrease of 7,000 from the previous week's revised average of 393,250.

Click on graph for larger image in graph gallery.

This graph shows the 4-week moving average of weekly claims for the last 40 years. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week by 7,000 to 386,250.

This is the 3rd consecutive week with the 4-week average below the 400,000 level, and although there is nothing magical about 400,000, this is a positive step for the labor market. Unfortunately the recent JOLTS data indicated that hiring hasn't picked up significantly yet, even as layoffs and discharges have slowed.

by Calculated Risk on 3/16/2011 09:02:00 PM

Here is a live video feed.

Two CH-47 helicopters are rotating dumping water. UPDATE: Four drops were completed - now suspended. Water cannons are next.

Also from HNK: Water to be sprayed to cool down No 4 reactor

A Tokyo police unit is set to use water spray vehicles to cool down the No. 4 reactor at the disaster-stricken Fukushima Daiichi nuclear power plant.

The police say it will begin the ground operation to spray water from outside the reactor on Thursday morning.

Earlier:
Housing Starts decrease sharply in February

by Calculated Risk on 3/16/2011 05:48:00 PM

By request ...

From Reuters: Japan earthquake LIVE (an excellent site to follow events)

From Reuters: Japan scrambles to pull nuclear plant back from brink

From Nikkei: Tepco To Build New Power Source To Aid In Cooling

Tokyo Electric Power Co. (9501) will on Thursday start work to build makeshift electric power sources within the Fukushima Daiichi nuclear power plant, a move intended to inject water more efficiently into the plant's crippled reactors, the company said at a dawn news conference.
...
Construction will start as soon as Thursday morning, an official said, but it will be unclear how long the work will take to complete until it begins. The work will be carried out at the same time as cooling efforts under way by police water cannon trucks.

From Reuters: TSE to keep Japan's trading floors open: report

NHK World English TV stream

From the NY Times: U.S. Calls Radiation ‘Extremely High’ and Urges Deeper Caution in Japan

The chairman of the United States Nuclear Regulatory Commission gave a significantly bleaker appraisal of the threat posed by Japan’s nuclear crisis than the Japanese government, saying on Wednesday that the damage at one crippled reactor was much more serious than Japanese officials had acknowledged and advising Americans to evacuate a wider area around the plant than the perimeter established by Japan.

From the WSJ: Officials Try to Cool Spent Nuclear Fuel

Earlier:
Housing Starts decrease sharply in February

Best wishes to all.

by Calculated Risk on 3/16/2011 02:04:00 PM

Although the number of multi-family housing starts was down in February to 96,000 at a seasonally adjusted annual rate (SAAR) (see Housing Starts decrease sharply in February), the number of multi-family starts can vary significantly month to month.

In general multi-family housing starts are trending up. Apartment owners are seeing falling vacancy rates, and some have started to plan for 2012 and will be breaking ground this year. We can see this in reports from architects and from comments at the NMHC apartment conference:

The expectations are for a record low supply completed this year (2011). Some pickup in completions next year (2012), and then plenty of completions in 2013.

The following graph shows the lag between multi-family starts and completions.

Click on graph for larger image in graph gallery.

The blue line is for multifamily starts and the red line is for multifamily completions. Since multifamily starts collapsed in 2009, completions collapsed in 2010.

Notice that the blue line (Starts) is now trending up, and the red line (completions) is still falling. Since it takes about 13 months on average to complete a multi-family building, the low level of starts in 2010 means a low level of completions in 2011.

In summary: For 2011, we should expect multi-family completions to be at or near a record low, and an increase in multi-family starts.