by Calculated Risk on 3/12/2013 10:18:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 3.7 million job openings on the last business day of January, little changed from December, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.1 percent) and separations rate (3.0 percent) also were little changed in January. ...
...
Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. ... In January, the quits rate was unchanged at 1.6 percent. The quits rate edged up for total private in January but was unchanged for government.

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 January, the most recent employment report was for February.

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 January to 3.693 million, up from 3.612 million in December. The number of job openings (yellow) has generally been trending up, and openings are up 8% year-over-year compared to January 2012.

Quits increased in January, and quits are up 13% year-over-year and at the highest level since 2008. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Not much changes month-to-month in this report, but the trend suggests a gradually improving labor market.

by Calculated Risk on 3/12/2013 09:08:00 AM

From the National Federation of Independent Business (NFIB): Small Business Confidence Improves a Bit

The NFIB Small Business Optimism Index increased 1.9 points in February to 90.8. While a nice improvement over the last several reports, the Index remains on par with the 2008 average and below the trough of the 1991-92 and 2001-02 recessions. The direction of February’s change is positive, but not indicative of a surge in confidence among small-business owners. ...

Weak sales is still the top business problem for 18% of owners.

Click on graph for larger image.

This graph shows the small business optimism index since 1986. The index increased to 90.8 in February from 88.9 in January.

Note: Small businesses have a larger percentage of real estate and retail related companies than the overall economy.  Lack of demand remains the main problem for small business owners.

by Calculated Risk on 3/11/2013 08:17:00 PM

Here is Nomura's current US outlook:

Activity: In the 3 1/2 years since the Great Recession ended, real GDP has grown at a lackluster 2.1% pace and is tracking close to that pace in Q1 2013.

Lower-income households are in the process of ratcheting down spending in response to a higher tax burden, but aggregate demand is being held up by higher-income spenders reacting to rising wealth from equities and real estate. Fiscal policy remains a source of uncertainty for the outlook, but risks of a policy misstep have diminished. Our forecast for the US economy assumes that half of the 1 March spending cuts will be implemented this year, but it is looking more likely that the full sequester will remain in place. If so, our assumptions for government spending will need to be revisited. Congress is working to complete a continuing resolution (CR) before the 22 March Easter holiday break. The CR is expected to fund the federal government through the end of this fiscal year (30 September).

Providing a buffer against fiscal headwinds, the housing recovery continues to deepen. Home price increases are providing support for household confidence and we expect the wealth effect from real estate to help support aggregate demand.

Inflation: Our forecast for consumer price inflation to remain below 2% for the forecast horizon reflects the effects of a substantial output gap that has emerged from three years of sub-par growth in the economy, and limited risks from commodity prices.

Policy: We expect the FOMC to maintain its current longer-term asset purchase program through Q3 2013, and then begin to taper purchases as the recovery strengthens and outlook improves convincingly. Upcoming negotiations in Washington over the reprogramming of spending cuts and the budget are likely to prove very contentious.

Risks: Fiscal policy missteps and slower global growth remain the dominant risks to the outlook.

Nomura is projecting real GDP to increase 1.9% in 2013 (another sluggish year), and for the unemployment rate to fall to 7.5% in Q4. For housing starts, Nomura is forecasting an increase to 1.02 million starts from 780 thousand in 2012 (a 30% increase).

Tuesday economic releases:
• At 7:30 AM ET, NFIB Small Business Optimism Index for February. The consensus is for an increase to 90.1 from 88.9 in January.

• At 10:00 AM, Job Openings and Labor Turnover Survey for January from the BLS. The number of job openings has generally been trending up, but openings were only up 2% year-over-year in December.

by Calculated Risk on 3/11/2013 03:26:00 PM

Economist Tom Lawler sent me the table below of short sales and foreclosures for several selected cities in February. 

Look at the right two columns in the table below (Total "Distressed" Share for Feb 2013 compared to Feb 2012). In every area that has reported distressed sales so far, the share of distressed sales is down year-over-year - and down significantly in most areas. 

Also there has been a decline in foreclosure sales just about everywhere. Look at the middle two columns comparing foreclosure sales for Feb 2013 to Feb 2012. Foreclosure sales have declined in all these areas, and some of the declines have been stunning (the Nevada sales were impacted by the new foreclosure law). 

Also there has been a shift from foreclosures to short sales. In all of these areas, short sales now out number foreclosures.

I think this is important: Imagine that the number of total existing home sales doesn't change over the next year - some people would argue that is "bad" news and the housing market isn't recovering. But also imagine that the share of distressed sales declines 20%, and conventional sales increase to make up the difference. That would be a positive sign - and that is what appears to be happening.

An example would be Sacramento (I posted data on Sacramento earlier today).  In Sacramento, total sales were down 14% in Feb 2013 compared to Feb 2012, but conventional sales were up 42%!  I'd say that is a positive sign.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	13-Feb	12-Feb	13-Feb	12-Feb	13-Feb	12-Feb
Las Vegas	37.9%	29.3%	10.2%	42.0%	48.1%	71.3%
Reno	37.0%	28.0%	13.0%	42.0%	50.0%	70.0%
Phoenix	15.0%	28.1%	13.8%	23.3%	28.8%	51.4%
Sacramento	30.3%	31.9%	13.5%	33.9%	43.8%	65.8%
Mid-Atlantic (MRIS)	13.6%	16.4%	12.1%	17.5%	25.6%	33.9%
Hampton Roads					34.2%	36.0%
Charlotte					15.9%	18.7%
Memphis*			27.8%	36.6%
*share of existing home sales, based on property records

by Calculated Risk on 3/11/2013 12:10:00 PM

Last November, I mentioned a recession probability chart from the St Louis Fed that was making the rounds, and that some people were misusing the chart to argue a new recession was starting in the US.  Below is an update to the chart.

A few weeks later - also in November - the author, University of Oregon Professor Jeremy Piger, posted some FAQs and data for the chart online. Professor Piger writes:

2. How should I interpret these probabilities as a recession signal?

Historically, three consecutive months of smoothed probabilities above 80% has been a reliable signal of the start of a new recession, while three consecutive months of smoothed probabilities below 20% has been a reliable signal of the start of a new expansion. For an analysis of the performance of the model for identifying new turning points in real time, see:

Chauvet, M. and J. Piger, “A Comparison of the Real-Time Performance of Business Cycle Dating Methods,” Journal of Business and Economic Statistics, 2008.

Click on graph for larger image.

Here is the current chart from FRED at the St Louis Fed.

Right now, by this method, the odds of the US currently being in a recession are very low (close to zero). Some day I'll be on recession watch again (not in the near future), and this is one of the tools I'll be using.