by Calculated Risk on 12/16/2011 11:55:00 AM

Earlier today the BLS reported:

The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in November on a seasonally adjusted basis ... The index for all items less food and energy increased 0.2 percent in November following increases of 0.1 percent in each of the prior two months.

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.1% annualized rate) in November. The 16% trimmed-mean Consumer Price Index increased 0.1% (1.0% annualized rate) during the month.
...
The CPI less food and energy increased 0.2% (2.1% annualized rate) on a seasonally adjusted basis. ... Over the last 12 months, the median CPI rose 2.2%, the trimmed-mean CPI rose 2.5%, the CPI rose 3.4%, and the CPI less food and energy rose 2.2%.

Note: The Cleveland Fed has a discussion of a number of measures of inflation: Measuring Inflation. You can see the median CPI details for November here.

On a year-over-year basis, these measures of inflation have stopped increasing, and are slightly above the Fed's target. On a monthly basis, the rate of increase is mostly below the Fed's target (Core is above, median and trimmed-mean are below).

Click on graph for larger image.

This graph shows the year-over-year change for these three key measures of inflation. On a year-over-year basis, the median CPI rose 2.2%, the trimmed-mean CPI rose 2.5%, and core CPI rose 2.2%.

On a monthly basis, the median Consumer Price Index increased 1.1% at an annualized rate, the 16% trimmed-mean Consumer Price Index increased 1.0% annualized, and core CPI increased 2.1% annualized.

Both the median CPI and trimmed-mean CPI increased at a slower rate in November than in October.

by Calculated Risk on 12/16/2011 09:41:00 AM

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported - and possible hints about the trade report for November. LA area ports handle about 40% of the nation's container port traffic.

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic is down 0.3% from October, and outbound traffic is down 0.2%.

Inbound traffic is "rolling over" and outbound traffic has stopped increasing.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

For the month of November, loaded inbound traffic was down 4% compared to November 2010, and loaded outbound traffic was down 2% compared to November 2010.

Exports have been increasing, although bouncing around month-to-month. This is only the 2nd month with a year-over-year decline in exports since Sept 2009.

Imports have been soft - this is the sixth month in a row with a year-over-year decline in imports.

All current trade graphs

by Calculated Risk on 12/16/2011 08:30:00 AM

From the BLS: CPI unchanged in November as energy declines offset increases in other categories

The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.

The energy index declined for the second month in a row and offset increases in the indexes for food and all items less food and energy. ... The index for all items less food and energy increased 0.2 percent in November following increases of 0.1 percent in each of the prior two months.

Later today I'll post a graph of several core measures of inflation.

by Calculated Risk on 12/15/2011 07:43:00 PM

Just more brinkmanship, but I'm pretty sure there will no significant government shutdown and the payroll tax cut will be extended.

From the WSJ: Congress Blinks on Shutdown

Congressional leaders—fearful of voters' wrath over Washington's bickering and brinkmanship—stepped back Thursday from a possible government shutdown, clearing the way for extending a payroll tax cut that is set to expire at year's end.
...
The spending bill compromise was expected to come to a final vote Friday, in time to avert a shutdown. ... A deal on the payroll tax compromise is expected to follow, although negotiators were still struggling to decide how to offset the cost ...

Earlier:
• Weekly Initial Unemployment Claims decline to 366,000
• Industrial Production decreased 0.2% in November, Capacity Utilization decreased
• Empire State and Philly Fed Manufacturing Indexes show improvement in December

by Calculated Risk on 12/15/2011 04:24:00 PM

CR Note: The FHA has some "issues" and just released the September (Q3) REO data. I've update the Q3 REO graphs (see bottom of this post).

From economist Tom Lawler:

The FHA finally addressed the “issues” delaying the release of the September Report to the FHA Commissioner, and even released the October report this week.

On the SF REO front, the continued slow pace of property conveyances (partly related to the foreclosure “mess”), combined with a decent pace of sales, pushed the FHA’s SF REO inventory down to an estimated 37,922 at the end of October, the lowest level since mid-2008. I say “estimated” because the numbers in this report don’t always exactly “jive” with other FHA data not regularly released to the public. Here is a table with some history of data from various monthly reports.

Monthly Report to FHA Commissioner
	SF REO Inventory (EOM)	Conveyances	Sales	Adjustments
Jun-10	44,850	8,487	8,893	41
Jul-10	44,944	8,341	8,508	261
Aug-10	47,007	9,810	7,686	-61
Sep-10	51,487	11,411	7,439	508
Oct-10	54,609	9,908	7,289	503
Nov-10	55,488	6,752	5,817	-56
Dec-10	60,739	7,728	2,749	272
Jan-11	65,639	7,709	2,632	-177
Feb-11	68,801	7,383	4,221	0
Mar-11	68,997	8,647	8,728	277
Apr-11	65,063	7,410	11,375	31
May-11	59,465	7,032	12,659	29
Jun-11	53,164	7,240	13,600	59
Jul-11	48,507	6,509	11,379	213
Aug-11	44,749	8,005	11,701	-62
Sep-11	40,719	6,567	10,554	-43
Oct-11	37,922	6,541	9,883	545

The shockingly slow sales pace in the latter part of 2010 and the early part of 2011 reflected contract changes for managing FHA property sales.

What is especially striking is the extraordinarily low level of property conveyances in September and October, especially given the continued increase in the number of FHA-insured SF loans that are seriously delinquent.

The latest report also showed a substantial slowdown in the number of SF FHA loan modifications over the past few months.

FHA SF "Home Retention" Activity
	Forbearance Agreements	Loan Modifications	Partial Claims	Total "Loss Mitigation Activity"	SDQ Loans
Dec-09	1,840	8,514	968	11,322	549,667
Jan-10	1,766	9,319	986	12,071	576,691
Feb-10	1,618	11,359	846	13,823	570,799
Mar-10	1,686	14,604	1,158	17,448	553,650
Apr-10	1,228	11,525	1,603	14,356	544,464
May-10	1,189	12,034	1,621	14,844	548,193
Jun-10	1,074	17,072	1,479	19,625	551,330
Jul-10	1,212	19,002	1,421	21,635	559,620
Aug-10	1,152	16,090	1,676	18,918	558,316
Sep-10	1,070	15,634	1,520	18,224	563,513
Oct-10	2,361	12,667	1,194	16,222	532,938
Nov-10	1,720	14,830	1,631	18,181	588,947
Dec-10	3,301	18,000	2,328	23,629	598,140
Jan-11	2,905	12,075	2,352	17,332	612,443
Feb-11	2,628	10,412	1,991	15,031	619,712
Mar-11	3,562	12,752	2,714	19,028	553,650
Apr-11	2,503	13,564	2,366	18,433	575,950
May-11	2,211	11,945	3,377	17,533	578,933
Jun-11	2,655	13,368	3,082	19,105	584,822
Jul-11	2,259	8,075	1,629	11,963	598,921
Aug-11	2,068	9,950	1,815	13,833	611,822
Sep-11	1,581	7,346	1,501	10,428	635,096
Oct-11	2,109	7,183	1,426	10,718	661,554

Here is a table showing FHA SF insurance claims for the past few fiscal years (October to September), as well as for October 2011.

Insurance Claims	11-Oct	FY 2011	FY 2010	FY 2009
Conveyance Foreclosure	6,649	90,340	98,868	69,009
Pre-Foreclosure Sale	4,435	25,069	15,293	6,473
Deed-in-Lieu of Foreclosure	106	1,132	863	835
Other	48	1,646	152	102
Total	11,238	118,187	115,176	76,419

In its 2011 report to Congress on the financial status of the FHA Mutual Mortgage Insurance fund, HUD noted that the “so-called ‘robo-signing’ crisis” had “created a lengthening of time-in-foreclosure for FHA-insured loans” that produced a drop in conveyance foreclosures and a surge in “open cases,” the final resolution of which was “still to be determined.” Clearly, the pace of conveyance foreclosures continued to be “artificially” depressed in October. FHA pre-foreclosure sales activity surged last year, and October was a record month for pre-foreclosure sales.

CR Note: The above was from Tom Lawler, below are update to REO graphs.

Click on graph for larger image.

This graph shows the REO inventory for Fannie, Freddie and FHA through Q3 2011.

The REO inventory for the "Fs" increased sharply in 2010, but may have peaked in Q4 2010. However there may be a new peak when the foreclosure dam breaks (after the settlement) - however I expect quite a few modifications as part of the settlement too, and probably a bulk REO selling program from Fannie and Freddie.

The Fannie, Freddie, FHA, PLS, FDIC REO decreased to about 455,000 in Q3 from just under 500,000 in Q2.

As Tom Lawler has noted: "This is NOT an estimate of total residential REO, as it excludes non-FHA government REO (VA, USDA, etc.), credit unions, finance companies, non-FDIC-insured banks and thrifts, and a few other lender categories." However this is the bulk of the 1-4 family REO - probably 90% or more. Rounding up the estimate (using 90%) suggests total REO is just around 500,000 in Q3.

Important: REO inventories have declined over the last year. This is a combination of more sales and fewer acquisitions due to the slowdown in the foreclosure process. There are many more foreclosures coming - see my post last month Housing: REO and Mortgage Delinquencies.