by Calculated Risk on 10/31/2011 04:14:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 4.00% in September. This is down from 4.03% in August, and down from 4.56% in September of 2010. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Freddie Mac reported that the Single-Family serious delinquency rate increased to 3.51% in September, up from 3.49% in August. This is down from 3.80% in September 2010. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

These are loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image in graph gallery.

Some of the rapid increase in 2009 was probably because of foreclosure moratoriums, and also because loans in trial mods were considered delinquent until the modifications were made permanent.

Tracking this on a monthly basis this is kind of like watching paint dry, but the serious delinquency rates are generally falling - but only falling slowly. The key is the normal serious delinquency rate is under 1%, and at this pace of decline, the delinquency rate will not be back to "normal" for a number of years.

by Calculated Risk on 10/31/2011 12:45:00 PM

From the National Restaurant Association: Restaurant Performance Index Rose Above 100 in September, as Sales and Traffic Levels Improved

Buoyed by stronger same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) topped the 100 mark in September for the first time in three months. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.1 in September, up 0.7 percent from August and its highest level since June. In addition, September represented the first time in three months that the RPI stood above 100, the level above which signifies expansion in the index of key industry indicators.

“The September increase in the Restaurant Performance Index was fueled by improvements in the same-store sales and customer traffic indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Among the forward-looking indicators, restaurant operators are more optimistic about sales growth in the months ahead, while their outlook for the overall economy remains cloudy.”
...
Restaurant operators reported stronger same-store sales in September. ... Restaurant operators also bounced back from a sluggish August performance to report net positive customer traffic levels in September.

Click on graph for larger image.

The index increased to 100.1 in September (abpve 100 indicates expansion).

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

Last month I wrote: "August was an especially weak economic month following the debt ceiling debate, and it will be interesting to see if these indicators show some rebound in September and October." This is a small rebound, but this suggests the recent dip might have been partially due to the default threat.

by Calculated Risk on 10/31/2011 10:30:00 AM

This is the last of the regional Fed surveys for October. The regional surveys provide a hint about the ISM manufacturing index - and the regional surveys were mixed and still weak in October, but improved from August and September.

Dallas Fed: Texas Manufacturing Activity Expands

Texas factory activity increased in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained positive but edged down from 5.9 to 4.1, suggesting growth slowed slightly.

Other measures of current manufacturing conditions also indicated growth in October, and the pace of new orders increased. The shipments index fell from 9.4 to 2.7, suggesting shipment volumes continued to increase but at a slower pace. The capacity utilization index moved back into positive territory after being negative for two months. The new orders index suggested a pickup in demand, moving from 3.6 to 8.3. ...

Perceptions of general business conditions improved in October. The general business activity index jumped up from -14.4 to 2.3, its first positive reading in six months. The company outlook index also rose markedly, bouncing back to a reading of 7.2 after coming in near zero in September.

Labor market indicators reflected higher labor demand growth. The employment index came in at 15.1, up slightly from 13.4 in September.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (dashed green, through October), and five Fed surveys are averaged (blue, through October) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through September (right axis).

The ISM index for October will be released Tuesday, Nov 1st and this suggests another fairly weak reading in October. The consensus is for a slight increase to 52.0 from 51.6 in September.

by Calculated Risk on 10/31/2011 09:45:00 AM

From the Chicago ISM Chicago Business Barometer™ Stabilized:

The Chicago Purchasing Managers reported the CHICAGO BUSINESS BAROMETER stabilized in October. The Business Barometer marked a 25th month of expansion, yet the 3 month moving average for the barometer fell for the 7th consecutive month. Monthly changes in the individual Business Activity components were generally modest with all but one component converging towards their 3 month moving averages.

The overall index decreased to 58.4 from 60.4 in September. This was close to consensus expectations of 58.0.

Note: any number above 50 shows expansion.

The employment index increased to 62.3 from 60.6. "EMPLOYMENT highest in 6-months"

The new orders index decreased to 61.3 from 65.3. "NEW ORDERS erased half of September's gain"

Weekend:
• Summary for Week ending Oct 28th
• Schedule for Week of Oct 30th
• FOMC Meeting Preview

by Calculated Risk on 10/31/2011 08:51:00 AM

A cartoon from the FT Alphaville: E*C*B

[This] appears on page 8 of the FT’s UK print edition. It’s like one of them Renaissance allegory paintings ... Interpretations welcome.

I'm not sure about the meaning, but I liked the play on M*A*S*H.

Maybe this has something to do with Mario Draghi taking over at the ECB tomorrow. Although the ECB will obviously cut rates soon (they were caught going the wrong direction), it seems that Draghi's hands are mostly tied as far as QE.