by Calculated Risk on 6/28/2012 08:30:00 AM

The DOL reports:

In the week ending June 23, the advance figure for seasonally adjusted initial claims was 386,000, a decrease of 6,000 from the previous week's revised figure of 392,000. The 4-week moving average was 386,750, a decrease of 750 from the previous week's revised average of 387,500.

The previous week was revised up from 387,000 to 392,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined slightly to 386,750.

This is just off the high for the year.

And here is a long term graph of weekly claims:

This was near the consensus forecast of 385,000 and suggests some renewed weakness in the labor market.


All current Employment Graphs

by Calculated Risk on 6/27/2012 10:30:00 PM

The focus tomorrow will be on the start of the two day European summit in Brussels, and also on the SCOTUS ruling on the health care law. The ruling on the Affordable Care Act is expected a little after 10 AM ET. (the SCOTUSblog is a good resource).

On Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for claims to decline to 385 thousand from 387 thousand last week.


• Also at 8:30 AM, the third estimate of Q1 GDP will be released. The consensus is that real GDP increased 1.9% annualized in Q1; no change from the 2nd estimate.

• At 11:00 AM, the Kansas City Fed regional Manufacturing Survey for June will be released this is the last of the regional Fed surveys for June, and three out of four have been below expectations. The consensus is for a decrease to 4 from 9 in May (above zero is expansion).

by Calculated Risk on 6/27/2012 08:03:00 PM

The following graph shows the number of cities with increasing house prices on a year-over-year and month-over-month basis.

This graph is based on the Case-Shiller Composite 20 cities using seasonally adjusted data starting in January 2001.

Most cities were seeing month-over-month increases every month through 2005. In 2006, some cities started seeing year-over-year declines (red). There were still a few cities with increasing prices in early 2007. The increases in 2009 and 2010 were related to the housing tax credit (all of those gains and more are gone).

Recently prices have started increasing in more and more cities. Note: Case-Shiller data is through April.

Click on graph for larger image in graph gallery.

In April 2012, 17 cities saw month-over-month price increases (SA), and 10 cities saw year-over-year price increases.

I expect that the number of cities with a year-over-year price increase will continue to climb, and in a few months the Case-Shiller Composite 20 index will turn positive on a year-over-year basis.

by Calculated Risk on 6/27/2012 04:29:00 PM

From economist Tom Lawler:

Lennar Corporation, the 3rd largest US home builder in 2011, reported that net home orders in the quarter ended May 31, 2012 totaled 4,481, up 39.9% from the comparable quarter of last year. The company’s sales cancellation rate, expressed as a % of gross orders, was 16% last quarter, down from 17% a year ago. Home deliveries last quarter totaled 3,222, up 20.1% from the comparable quarter last year. Lennar’s order backlog at the end of May was 3,970, up 60.7% from last May.

As with most other builders, Lennar reported that “pricing trends” were positive in “most” markets last quarter. Here are some comments by CEO Stuart Miller in the press release.

"Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process. And while the housing downturn was broad-based and national, the recovery process continues to be very localized. Although highly conservative mortgage lending practices and challenging appraisals remain a constant headwind, we are experiencing net positive price and volume trends in most of our markets."

Mr. Miller continued, "As the overall housing market has continued to improve over the last several quarters, our well located communities and product execution has allowed us to outperform the market. During the quarter, deliveries increased 20%, new orders increased 40%, backlog increased 61% and our operating margin increased over 100% to 9.2%, our highest margin percentage since Q2 2006. This operating leverage was driven by our ability to increase sales per community, raise prices and lower incentives, and control our overhead costs."

Lennar’s results easily beat “consensus.”

CR Note: It helps to watch the builders. In early May, Tom Lawler sent me a chart on homebuilder sales, and Tom argued we'd see upward revisions to new home sales:

"[R]ight now I estimate that revisions will lift Census’s estimates of new SF home sales last quarter from an average seasonally adjusted annual rate of 337,000 to a SAAR of 350,000."

Sure enough, the Commerce Department has revised up Q1 new home sales to an average of just over 350,000.

Tom adds another key point today:

While the new home sales report exceeded “consensus,” recent numbers might even have been stronger if builders on average had higher inventories for sale. After being burned several times with some “false” signs of recovery, most builders have been pretty conservative in both “spec” building and community-count growth.

by Calculated Risk on 6/27/2012 01:40:00 PM

A new song from Merle Hazard called the "Fiscal Cliff"

This was debuted on PBS Making Sen$e this morning, see: A Q-and-A, Plus a Ditty and Contest as U.S. Races Toward the 'Fiscal Cliff'

They are having a contest for a new song. From Merle:

Though I'm a country singer, I also love surf-style music. The only thing wrong with the genre is that these songs are always -- of course -- about surfing, as well as teenage romance and drag races. There should be more on macro-economic topics and political economy. So I'd like to do another one like 'Fiscal Cliff,' but I'm out of ideas. I'm hoping NewsHour audience might help. I have in mind a song contest. Submit a topic, a key phrase, or a whole lyric. Whatever you like.