by Calculated Risk on 5/04/2011 12:23:00 PM

Here are two scatter graphs showing the relationship between the ISM employment indexes for manufacturing and service, and monthly changes in BLS payroll employment.

Click on graph for larger image in graph gallery.

This graph shows the relationship between the ISM manufacturing employment index and the change in BLS manufacturing employment (as a percent of the previous month employment).

The yellow dot is a forecast for April based on the ISM employment reading of 62.7. This suggests about 50,000 manufacturing jobs added in April (although there is plenty of noise, and R-squared is 0.62.

The second graph shows the relationship between the ISM non-manufacturing employment index and the change in BLS private service employment (also as a percent of the previous month employment).

This is also noisy (R-squared is 0.68), but a reading of 51.9 suggests an increase of about 110,000 service sector payroll jobs in April (blue dot on graph). So the ISM reports suggests private sector job growth in April of close to the 179,000 reported by ADP this morning.

by Calculated Risk on 5/04/2011 10:00:00 AM

The April ISM Non-manufacturing index was at 52.8%, down from 57.3% in March. The employment index indicated slower expansion in April at 51.9%, down from 53.7% in March. Note: Above 50 indicates expansion, below 50 contraction.

Click on graph for larger image in graph gallery.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

From the Institute for Supply Management: April 2011 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in April for the 17th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI registered 52.8 percent in April, 4.5 percentage points lower than the 57.3 percent registered in March, and indicating continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 6 percentage points to 53.7 percent, reflecting growth for the 21st consecutive month, but at a slower rate than in March. The New Orders Index decreased substantially by 11.4 percentage points to 52.7 percent. The Employment Index decreased 1.8 percentage points to 51.9 percent, indicating growth in employment for the eighth consecutive month, but at a slower rate. The Prices Index decreased 2 percentage points to 70.1 percent, indicating that prices increased at a slightly slower rate in April when compared to March. According to the NMI, 17 non-manufacturing industries reported growth in April. Respondents' comments are mixed about overall business conditions; however, they are mostly positive. Respondents' comments also indicate concern over rising fuel costs, commodity costs and the lingering uncertainty about the economy."
emphasis added

This was well below expectations of 58.0%.

by Calculated Risk on 5/04/2011 08:15:00 AM

ADP reports:

Employment in the nonfarm private business sector rose 179,000 from March to April on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from February 2011 to March 2011 was revised up to 207,000 from the previously reported increase of 201,000.
...
April’s ADP Report estimates employment in the service-providing sector rose by 138,000, marking 16 consecutive months of employment gains. Employment in the goods-producing sector rose 41,000, the sixth consecutive monthly gain, while manufacturing employment rose 25,000, the seventh consecutive monthly gain.
...
In April, employment in the construction industry increased 9,000, only the second monthly increase since June 2007. Since December 2010, however, construction employment has, on balance, risen, suggesting that finally employment in this sector has bottomed out. The total decrease in construction employment since its peak in January 2007 is 2,115,000.

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

This was slightly below the consensus forecast of an increase of about 195,000 private sector jobs in April. Note the slight increase in construction jobs - it appears this sector has "bottomed out".

The BLS reports on Friday, and the consensus is for an increase of 185,000 payroll jobs in April, on a seasonally adjusted (SA) basis, and for the unemployment rate to hold steady at 8.8%.

by Calculated Risk on 5/04/2011 07:19:00 AM

The MBA reports: Latest MBA Weekly Survey Shows Increase in Mortgage Applications, Driven by Refinances

The Refinance Index increased 6.0 percent from the previous week. The seasonally adjusted Purchase Index increased 0.3 percent from one week earlier.
...
The average contract interest rate for 30-year fixed-rate mortgages decreased for the third consecutive week to 4.76 percent from 4.80 percent, with points decreasing to 0.76 from 1.00 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year fixed contract rate since December 3, 2010.

Click on graph for larger image in graph gallery.

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

Refinance activity increased as mortgage rates fell to the lowest level since December 2010.

The four week average of purchase activity is at about 1997 levels, although this doesn't include the very high percentage of cash buyers. This suggests weak existing home sales through June (not counting cash buyers).

by Calculated Risk on 5/03/2011 10:08:00 PM

Earlier today from Bloomberg: Portugal Agrees on Aid Plan With Wider Deficit Targets

Portugal reached an agreement with officials preparing its European Union-led bailout that will provide as much as 78 billion euros ($116 billion) in aid and allow more time to reduce the country’s budget deficit.

The three-year plan set goals for a budget deficit of 5.9 percent of gross domestic product this year, 4.5 percent in 2012 and 3 percent in 2013, Prime Minister Jose Socrates said in Lisbon today.

The yield on Portugal's ten year bonds decreased slightly to 9.6% today and the two year yield declined slightly to 11.8%.

Earlier:
• U.S. Light Vehicle Sales 13.2 million SAAR in April
• Lawler: Monthly Report to Commissioner Suggests Serious REO Inventory Problem at FHA