by Calculated Risk on 12/11/2012 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings in October was 3.7 million, essentially unchanged from September.
...
The level of total nonfarm job openings in October was up from 2.4 million at the end of the recession in June 2009.
...
In October, the quits rate was unchanged for total nonfarm and total private, and little changed for government. The number of quits was 2.1 million in October compared to 1.8 million at the end of the recession in June 2009.

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for October, the most recent employment report was for November.

Click on graph for larger image.

Notice that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in October to 3.675 million, up from 3.547 million in September. The number of job openings (yellow) has generally been trending up, and openings are up about 8% year-over-year compared to October 2011.

Quits increased in October, and quits are up 4% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

The trend suggests a gradually improving labor market.

All current employment graphs

by Calculated Risk on 12/11/2012 08:30:00 AM

The Department of Commerce reported:

[T]otal October exports of $180.5 billion and imports of $222.8 billion resulted in a goods and services deficit of $42.2 billion, up from $40.3 billion in September, revised. October exports were $6.8 billion less than September exports of $187.3 billion. October imports were $4.9 billion less than September imports of $227.6 billion.

The trade deficit was smaller than the consensus forecast of $42.8 billion.

The first graph shows the monthly U.S. exports and imports in dollars through October 2012.

Click on graph for larger image.

Both exports and imports decreased in October. US trade has slowed recently.

Exports are 9% above the pre-recession peak and up 1.0% compared to October 2011; imports are 4% below the pre-recession peak, and down 0.8% compared to October 2011.

The second graph shows the U.S. trade deficit, with and without petroleum, through October.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil averaged $99.75 in October, up from $98.88 per barrel in September. The trade deficit with China increased to $29.5 billion in October, up from $28.1 billion in October 2011. Most of the trade deficit is still due to oil and China.

The trade deficit with the euro area was $8.9 billion in October, up from $7.1 billion in October 2011. It appears the eurozone recession is impacting trade.

by Calculated Risk on 12/10/2012 08:29:00 PM

The WSJ had a front page article on consumer spending yesterday: Consumer Spending Wobbles . The article starts with "U.S. consumer spending, a rare pillar of economic strength in recent months, is showing signs of weakening."

Tim Duy takes exception to both the "pillar of strength" and "signs of weakening": Wobbly Consumers?

I am not sure who exactly believed that the US consumer is a "rare pillar of economic strength," but I suspect they were somewhat delusional and perhaps overemphasizing the importance of consumer confidence surveys. I don't think the consumer is falling off the cliff, fiscal or otherwise, just yet, but household spending hasn't been exactly a source of strength for several months now. The fragility of the sector is not new.

Dr. Duy has a number of charts supporting his view.

I don't think we will see a huge surge in spending, but I think Duy is correct and we will see continued growth in consumer spending. As I mentioned on Friday, seasonal retail hiring is solid, and that is usually a good sign. The LA Times noted it today: Holiday retail hiring could break record set 12 years ago

Here is the chart I posted last Friday:

Click on graph for larger image.

Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

Retailers hired 465.5 thousand workers (NSA) net in November. The combined level for October and November is the highest ever. This suggests retailers are fairly optimistic about the holiday season. There is a decent correlation between retail hiring and retail sales, see: Retail: Seasonal Hiring vs. Retail Sales

As I wrote a month ago: "This is an old idea: Watch what they do, not what they say. And once again the retailers are hiring seasonal workers at a solid pace."

Tuesday economic releases:
• At 7:30 AM ET, the NFIB Small Business Optimism Index for November will be released. The consensus is for a decrease to 92.5 from 93.1 in October.

• At 8:30 AM, the Trade Balance report for October from the Census Bureau. The consensus is for the U.S. trade deficit to increase to $42.8 billion in October, up from from $41.5 billion in September. Export activity to Europe will be closely watched due to the European recession. Note: The strike at the ports of Long Beach and Los Angeles started in late November, and this report is for October.

• At 10:00 AM, the BLS will releases the Job Openings and Labor Turnover Survey for October. In general, job openings have generally been trending up.

• Also at 10:00 AM, the Monthly Wholesale Trade: Sales and Inventories for October. The consensus is for a 0.4% increase in inventories



Another question for the December economic prediction contest (Note: You can now use Facebook, Twitter, or OpenID to log in).

by Calculated Risk on 12/10/2012 05:51:00 PM

From Joe Weisenthal at Business Insider: Goldman's Top Economist Explains The World's Most Important Chart, And His Big Call For The US Economy

Hatzius is bullish on the U.S. economy starting in the second half of 2013, because finally he expects private releveraging to occur at a nice clip, and to not be counteracted by a fiscal drag. Says Hatzius:

"If the business sector is basically trying to reduce its financial surplus at a more rapid pace than the government is trying to reduce its deficit then you’re getting a net positive impulse to spending which then translates into stronger, higher, more income, and ultimately feeds back into spending."

He has a specific explanation and numbers in mind, to explain the private sector's inclination to reduce its savings, and spend more.

"Since mid-2009, that surplus has gradually come down as businesses and households have gotten closer to where they need to be from a long-term balance sheet perspective. They’ve paid down debt, they’ve eliminated the excess supply of housing, and that’s basically allowed them to reduce the financial surpluses that they run. They’re still running large surpluses – still 5.5 to 7 percent of GDP, but they’re no longer as large. We expect those figures to come down as the balance sheet adjustment process makes further strides and that’s an underlying source of boost to the economy that’s happening on the one side."

Of course, Hatzius's bullishness on the private sector's impulse to spend more is tempered by the fact that we're going to see some form of austerity early in 2013, even if there's a deal on the fiscal cliff.

The transcript of the interview is here, and check out the graph on Private Sector Surplus and Government Deficit.

by Calculated Risk on 12/10/2012 03:55:00 PM

Economist Tom Lawler sent me the following preliminary table today of short sales and foreclosures for a few selected cities in November.

There will be more cities added soon.

For all of these cities, the percentage of foreclosures is down from a year ago.   The percentage of short sales is up in Las Vegas and Reno, but down in Phoenix and in the mid-Atlantic area.

Look at the overall percent of distressed sales (combined foreclosures and short sales).  There is a large year-over-year decline in distressed sales in all of these cities. 

I think the two key numbers for real estate markets are 1) inventory, and 2) the percent of conventional sales (non-distressed sales).  Inventory is falling, and the percent of conventional sales is increasing - and those are positive signs.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	12-Nov	11-Nov	12-Nov	11-Nov	12-Nov	11-Nov
Las Vegas	41.2%	26.8%	10.7%	46.0%	51.9%	72.8%
Reno	40.0%	32.0%	12.0%	38.0%	52.0%	70.0%
Phoenix	23.2%	29.8%	12.9%	29.8%	36.1%	59.6%
Mid-Atlantic (MRIS)	11.9%	13.7%	8.7%	14.2%	20.6%	27.9%