by Calculated Risk on 11/15/2011 08:30:00 AM

On a monthly basis, retail sales were up 0.5% from September to October (seasonally adjusted, after revisions), and sales were up 7.9% from October 2010. From the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $397.7 billion, an increase of 0.5 percent (±0.5%) from the previous month and 7.2 percent (±0.7%) above October 2010. Total sales for the August through October 2011 period were up 7.6 percent (±0.5%) from the same period a year ago. The August to September 2011 percent change was unrevised from +1.1 percent (±0.3%).

Retail sales excluding autos increased 0.6% in October. Sales for September were unrevised with a 1.1% increase.

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales are up 19.5% from the bottom, and now 5.1% above the pre-recession peak (not inflation adjusted)

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail sales ex-gasoline increased by 6.0% on a YoY basis (7.2% for all retail sales).

This was well above the consensus forecast for retail sales of a 0.2% increase in October, and no change ex-auto.

This was a solid report, especially following the very strong September report.
All current retail sales graphs

by Calculated Risk on 11/14/2011 09:16:00 PM

From the Miami Herald: Florida’s economy faces ‘moderate’ risk from European recession

Florida would fare better than many states should Europe slip into recession, a new study [by Wells Fargo] found. ... The report makes no mention of another key concern for Florida: European tourism. The United Kingdom is Florida’s second largest source of international travelers behind Canada, with Germany holding the fifth slot behind Brazil and Mexico.

Here is a map from the referenced report by economist Mark Vitner and Michael Brown at Wells Fargo. The map shows European exports as a percent of state GDP.

Click on graph for larger image.

Utah has a very high percentage of exports to Europe - mostly silver and gold to the United Kingdom. West Virginia exports coal.

As the Miami Herald article notes, Florida will probably also be impacted by less tourism too.

However the largest potential impact is probably from financial contagion as opposed to trade and tourism. Catherine Rampell has a summary of the various channels of contagion: The Euro Zone Crisis and the U.S.: A Primer

by Calculated Risk on 11/14/2011 06:31:00 PM

An update to the weekly schedule ...

----- Thursday, Nov 17th -----
10:00 AM: Mortgage Bankers Association (MBA) 3rd Quarter 2011 National Delinquency Survey (NDS)

The following graph shows the percent of loans delinquent by days past due for Q2.

The MBA reported 8.44% of mortgage loans were delinquent at the end of Q2, seasonally adjusted, and another 4.43% were in the foreclosure process (total of 12.87%, essentially unchanged from Q1).

Click on graph for larger image.

This graph shows the percent of loans delinquent by days past due in Q2. Based on other data, the delinquency rate probably decreased slightly in Q3.

However the key problem is the large number of seriously delinquent loans (90+ days and in the foreclosure process). And there probably was little change in those percentages in Q3.

by Calculated Risk on 11/14/2011 03:37:00 PM

An economic letter from the SF Fed: Future Recession Risks: An Update(ht Rickkk)

Gathering storms across the Atlantic threaten a U.S. economy not yet recovered from the last recession. ... In the next few months, the odds of recession due to domestic factors appear reasonably contained. ... However, the curve reflecting the international odds suggests more imminent danger to the economy, although this threat is harder to calibrate using historical data and only indirectly reflects the health of the European financial system. Recession odds based on international factors peak at about 45% toward the end of 2011 ... The combination of these two recession coins, shown in the combined risks line of Figure 2, is quite disconcerting. It indicates that the odds are greater than 50% that we will experience a recession sometime early in 2012. Because the international odds of recession are more imprecisely estimated, one must be careful with a strict interpretation of this result. But the message is clear. Prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic.

Based on domestic data, I think a recession is unlikely. However the European crisis is definitely a significant downside risk to U.S. economic growth. The spillover from Europe depends on how the crisis unfolds ...

by Calculated Risk on 11/14/2011 01:24:00 PM

The Italian 10 year bond yield is up to 6.7%.

And keep an eye on Spain ... The Spanish 10 year bond yield has increased to 6.1%. The Spanish 2 year yield is up to 5.0%

From Bloomberg: Merkel’s CDU Delegates at Party Gathering Support Allowing Exits From Euro

“We’re not throwing anybody out,” Finance Minister Wolfgang Schaeuble said in an interview from Leipzig with broadcaster Phoenix. “We want Greece to stay in, that everybody stays in,” he said. “But if a country can’t carry the burden or doesn’t want to carry the burden, and the Greek people have to carry a heavy load, then we have to respect the country’s decision.”

Earlier today, the Greek New Democracy opposition leader Antonis Samaras was quoted as saying his party would not vote for any austerity measures, and he would not sign any letter pledging a commitment to austerity measures. If so, Greece will probably be leaving the euro sooner rather than later.