by Calculated Risk on 10/13/2012 01:05:00 PM

Earlier:
• Summary for Week Ending Oct 12th

This will be a very busy week for economic data. There are three key housing reports to be released this week: October homebuilder confidence on Tuesday, September housing starts on Wednesday, and September existing home sales on Friday.

Another key report is retail sales for September. For manufacturing, the October NY Fed (Empire state) and Philly Fed surveys, and the September Industrial Production and Capacity Utilization report will be released this week.

On prices, CPI for September will be released on Tuesday.

----- Monday, Oct 15th -----
8:30 AM ET: Retail sales for September will be released.

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 22.7% from the bottom, and now 7.3% above the pre-recession peak (not inflation adjusted).

The consensus is for retail sales to increase 0.7% in September, and for retail sales ex-autos to increase 0.5%.

8:30 AM: NY Fed Empire Manufacturing Survey for October. The consensus is for a reading of minus 3, up from minus 10.4 in September (below zero is contraction).

10:00 AM: Manufacturing and Trade: Inventories and Sales for August (Business inventories). The consensus is for 0.5% increase in inventories.

----- Tuesday, Oct 16th -----
8:30 AM: Consumer Price Index for September. The consensus is for CPI to increase 0.5% in September and for core CPI to increase 0.2%.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for September.

This shows industrial production since 1967.

The consensus is for Industrial Production to increase 0.2% in September, and for Capacity Utilization to increase to 78.3%.

10:00 AM: The October NAHB homebuilder survey. The consensus is for a reading of 41, up from 40 in September. Although this index has been increasing lately, any number below 50 still indicates that more builders view sales conditions as poor than good.

----- Wednesday, Oct 17th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

8:30 AM: Housing Starts for September.

Total housing starts were at 750 thousand (SAAR) in August, up 2.3% from the revised July rate of 733 thousand (SAAR). Single-family starts increased 5.5% to 535 thousand in August.

The consensus is for total housing starts to increase to 765,000 (SAAR) in September, up from 750,000 in August.

----- Thursday, Oct 18th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 365 thousand from 339 thousand.

10:00 AM: Philly Fed Survey for October. The consensus is for a reading of 0.5, up from minus 1.9 last month (above zero indicates expansion).

10:00 AM: Conference Board Leading Indicators for September. The consensus is for a 0.2% increase in this index.

----- Friday, Oct 19th-----
10:00 AM: Existing Home Sales for September from the National Association of Realtors (NAR).

The consensus is for sales of 4.75 million on seasonally adjusted annual rate (SAAR) basis. Sales in August 2012 were 4.82 million SAAR.

A key will be inventory and months-of-supply.

10:00 AM: Regional and State Employment and Unemployment (Monthly) for September 2012

by Calculated Risk on 10/13/2012 08:01:00 AM

This was a very light week for US economic data. Don't worry, there will be plenty of data next week!

Weekly initial unemployment claims dropped sharply, but a DOL official said the decline was mostly related to one state not reporting quarterly claims - so we might see a large upward revision next week.

From Kathleen Pender at the San Francisco Chronicle: California EDD denies it under-reported jobless claims

[A] DOL spokesman, who spoke on condition of anonymity ... said the department was expecting an 18.5 percent increase in new claims last week; instead it reported only an 8.6 percent increase. (These numbers are not seasonally adjusted; the seasonally adjusted jobless claims fell by 30,000 from the week before).

Unadjusted claims often shoot up the first week of a new quarter ... state employment departments have to review certain unemployment recipients to make sure they are not collecting benefits when they have a job. They also have to check up on some people who are receiving federal extended benefits, which start after a person has exhausted their regular state benefits. Sometimes, people who are getting extended benefits and get a part-time job or freelance work have to start over with a new state claim. As part of their quarterly review, the states are supposed to weed these people out and put them on a new state claim, which for statistical purposes counts as a new jobless claim.

States normally do this at the end of a quarter, which contributes to a jump in new claims at the beginning of the next quarter. The labor department spokesman said, “One large state has not completed this process,” which is why the data reported [this week] was better than expected.

He would not name the state but said it would be clear when the department issues a state-by-state breakdown of this week’s report next week. EDD spokeswoman Loree Levy could not tell me whether California is the state that had not yet finished this task. “We have been completing this on a timely basis for years,” she said.

Consumer sentiment was at the highest level since 2007 - still weak, but improving. The trade deficit is increased in August, and shows an ongoing structural imbalance.

Here is a summary of last week in graphs:

• Trade Deficit increased in August to $44.2 Billion

The Department of Commerce reported:

[T]otal August exports of $181.3 billion and imports of $225.5 billion resulted in a goods and services deficit of $44.2 billion, up from $42.5 billion in July, revised. August exports were $1.9 billion less than July exports of $183.2 billion. August imports were $0.2 billion less than July imports of $225.7 billion.

July was revised from $42.0 billion. The trade deficit was larger than the consensus forecast of $44.0 billion.

Oil averaged $94.36 in August, up slightly from $93.83 per barrel in July. Import oil prices will probably increase further in September. The trade deficit with China decreased slightly to $28.7 billion in August, down from $29.0 billion in August 2011. Still, most of the trade deficit is due to oil and China.

The trade deficit with the euro area was $9.7 billion in August, up from $7.8 billion in August 2011.

• BLS: Job Openings "essentially unchanged" in August, Up year-over-year

Jobs openings decreased in August to 3.561 million, down slightly from 3.593 million in July. The number of job openings (yellow) has generally been trending up, and openings are up about 13% year-over-year compared to August 2011.

Quits decreased slightly in August, and quits are up about 5% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").

This suggests a gradually improving labor market.

All current employment graphs
• Weekly Initial Unemployment Claims declined sharply to 339,000

The DOL reports:

In the week ending October 6, the advance figure for seasonally adjusted initial claims was 339,000, a decrease of 30,000 from the previous week's revised figure of 369,000. The 4-week moving average was 364,000, a decrease of 11,500 from the previous week's revised average of 375,500.

The previous week was revised up from 367,000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined sharply to 364,000. This is just above the cycle low for the 4-week average of 363,000 in March.

All current Employment Graphs
• Consumer Sentiment increased to 83.1, Highest since 2007


The preliminary Reuters / University of Michigan consumer sentiment index for October increased to 83.1, up from the September reading of 78.3.

This is still fairly weak, but this is the highest level since 2007.

by Calculated Risk on 10/12/2012 09:44:00 PM

Notes: Looks like the FDIC took another week off! I'm back from the housing forum in San Francisco. I'll write down a few thoughts on the forum this weekend. Here is a graph of consumer sentiment released this morning.


Click on graph for larger image.

The preliminary Reuters / University of Michigan consumer sentiment index for October increased to 83.1, up from the September reading of 78.3.

This is still fairly weak, but this is the highest level since 2007.

by Calculated Risk on 10/12/2012 01:32:00 PM

An interesting article from David Keohane at Alphaville: A Grexit delayed if not deniedCiti are pushing that fateful day back:

We have held the view, since May 2012, that a Greek exit from the euro area (“Grexit”) in the next 12 to 18 months is a high-probability event (90%) which we assume, for the sake of argument, would happen on January 1 2013. We are now cutting the probability of Grexit over the next 12-18 months to 60% and judge that this event will probably happen later than we previously thought, most likely in 1H 2014.

It’s all about German politics, something we have gone over before and won’t do again now. ... But essentially, everything is pointing to a slower evolution of this crisis with both Spain and Greece edging towards decisions rather than careening.

There is much more in the article.

Note: I'm at the Zillow housing forum in San Francisco. The first panel just concluded "Is it a good time to buy in California?". The consensus was yes, but mortgage / housing analyst Mark Hanson thought there was a new bubble developing in some areas like Phoenix (at the low end), and that the current improvement was just a "stimulus high" and that there would be a hangover to follow.

by Calculated Risk on 10/12/2012 09:55:00 AM

• JPMorgan's Jamie Dimon on housing:

Importantly, we believe the housing market has turned the corner. In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve, and, as a result, the Firm reduced the related loan loss reserves by $900 million. Despite this improvement, the absolute level of charge-offs remains elevated. We also expect to see high default-related expense for a while longer.

• The Reuter's/University of Michigan's Consumer sentiment index (preliminary for October) increased to 83.1. This is the highest level since 2007.  The consensus was for sentiment to be unchanged at 78.3. (I'll post a graph later after I return from housing forum).