by Calculated Risk on 8/06/2012 09:01:00 AM

From CBSAtlanta: Gas prices in Metro Atlanta still on the rise

Average retail gasoline prices in Atlanta rose 5.7 cents per gallon last week, averaging $3.52/g Sunday ... The national average increased 9.3 cents per gallon in the last week to $3.60/g.
...
"Watching the national average last week, one might have expected war broke out in the Middle East or a major hurricane shutting down production, neither of which happened, yet gasoline prices spiked," said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "... The good news for motorists is that the end to the summer driving season and change to winter-spec fuel is in view, which will likely put downward pressure on gasoline prices."

Professor Hamilton presented a calculator from Political Calculations that estimates the cost of gasoline based on Brent oil prices. Currently this suggests a price of around $3.55 per gallon - about the current price.

The following graph shows the recent increase in gasoline prices. Gasoline prices are down from the peak in early April, but up about 20 cents over the last five weeks.

Note: If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

Weekend:
• Summary for Week Ending Aug 3rd
• Schedule for Week of Aug 5th

by Calculated Risk on 8/05/2012 10:03:00 PM

Off topic: The Mars Rover Lands tonight. NASA TV has the coverage. The landing is at 10:31 PM PT tonight or 1:31 AM ET in the early morning.

• On Monday, at 9:00 AM ET, pre-recorded speech by Fed Chairman Ben Bernanke, "Economic Measurement".

• At 2:00 PM, the Fed is expected to release the July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices. This survey might show if there has been any tightening in financial standards due to the European crisis, or if loan demand has weakened in the US.

The Asian markets are green tonight, with the Nikkei up 1.8% and the Shanghai Composite up 2.0%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P future are up about 3, and the DOW futures up about 15.

Oil: WTI futures are at $91.29 and Brent is at $108.60 per barrel.

Yesterday:
• Summary for Week Ending Aug 3rd
• Schedule for Week of Aug 5th

by Calculated Risk on 8/05/2012 01:08:00 PM

Brad Plummer at the WaPo discusses two issues with employment and seasonal factors: Wait, the U.S. economy actually lost 1.2 million jobs in July?

The U.S. economy lost 1.2 million jobs between June and July. But that’s not how it got reported. When the Bureau of Labor Statistics (BLS) released its jobs figures for July, it said the economy gained 163,000 jobs. So what gives?

BLS isn’t hiding anything. The discrepancy just has to do with what’s known as “seasonal adjustments.” The U.S. economy follows certain predictable patterns in hiring and layoffs every year. School districts always let workers go for the summer and hire in the fall. Retailers always staff up for the Christmas holidays and lay people off afterwards. Students always flood the labor market in June.

So if we want to know how well the economy is doing, we want to know how many jobs were added after taking these predictable fluctuations into account. ...
In theory, that makes sense. But some economists and analysts now wonder if the BLS seasonal adjustments are somehow off a bit. If the financial crisis and recession mucked with the seasonal ebb and flow of the economy, then the adjustments that BLS makes for its monthly reports might be a bit skewed. Some jobs reports might look much better than they actually are. And others might look worse.

The first point that Plummer made was that there is a distinct seasonal pattern for employment. Even in the best of years there are a significant number of jobs lost in January and July. In 1994, when the economy added almost 3.9 million jobs, there were 2.25 million lost in January 1994, and almost 1 million payroll jobs lost in July 1994.

Click on graph for larger image.

This graph shows the seasonal pattern for the last decade for both total nonfarm jobs and private sector only payroll jobs. Notice the large spike down every January.

In July, private sector hiring is weak, but the decline in non-farm payrolls is from the public sector (teacher layoffs). Usually those teachers return to the payrolls in September and early October.

Since this happens every year, the BLS applies a seasonal adjustment before reporting the headline number. The key point is this is a series that NEEDS a seasonal adjustment!

The second issue Plummer mentioned is that the seasonal factor might be off a little (skewed by the deep recession). It is possible that the BLS is understating employment every spring and early summer, and overstating employment in the fall and winter. I mentioned this possibility last week in the employment preview.

One way to remove the seasonal factors is to look at the 12 month net change in payroll jobs. This graph shows the 12 month net change for both total employment and private employment.

Over the last 12 months, the economy has added 1.94 million private sector jobs, and 1.83 total non-farm payroll jobs (the public sector has lost 111 thousand jobs over the last 12 months).

Note that the red line has been above the blue line for the last few years - this is very unusual and is due to the decline in employment at all levels of government (especially state and local).

It is possible that the BLS overstated the strength of the labor market last winter, and understated the strength over the last several months (any seasonally skew could have been exaggerated this year by the mild winter). Of course the 12 month net change lags changes in the labor market - and that is why the BLS reports the seasonally adjusted payroll numbers.

by Calculated Risk on 8/05/2012 09:40:00 AM

Here is an update to four key indicators used by the NBER for business cycle dating: GDP, Employment, Industrial production and real personal income less transfer payments.

Note: The following graphs are all constructed as a percent of the peak in each indicator. This shows when the indicator has bottomed - and when the indicator has returned to the level of the previous peak. If the indicator is at a new peak, the value is 100%.

These graphs show that several major indicators are still significantly below the pre-recession peaks.

Click on graph for larger image.

This graph is for real GDP through Q2 2012. Real GDP returned to the pre-recession peak in Q4 2011, and has been at new post-recession highs for three consecutive quarters.

At the worst point - in Q2 2009 - real GDP was off 4.7% from the 2007 peak.

Real GDP has performed better than other indicators ...

This graph shows real personal income less transfer payments as a percent of the previous peak through the June report.

This measure was off 11.2% at the trough in October 2009.

Real personal income less transfer payments are still 3.0% below the previous peak.

The third graph is for industrial production through June.

Industrial production was off over 17% at the trough in June 2009, and has been one of the stronger performing sectors during the recovery.

However industrial production is still 3.3% below the pre-recession peak.

The final graph is for employment. This is similar to the graph I post every month comparing percent payroll jobs lost in several recessions.

Payroll employment is still 3.5% below the pre-recession peak.

All of these indicators collapsed in 2008 and early 2009, and only real GDP is back to the pre-recession peak. At the current pace of improvement, industrial production will be back to the pre-recession peak in early 2013, personal income less transfer payments late in 2013, and employment in late 2014.

by Calculated Risk on 8/04/2012 04:59:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Aug 3, 2012. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

Quiet week for the Unofficial Problem Bank List with the only change being the removal of the failed Waukegan Savings Bank, Waukegan, IL ($89 million). After removal, the list stand at 899 institutions with assets of $349.4 billion.

The list has not been less than 900 institutions since November 12, 2010. A year ago, the list had 988 institutions with assets of $411.7 billion. Next week will likely be as quiet.

Earlier:
• Summary for Week Ending Aug 3rd
• Schedule for Week of Aug 5th