by Calculated Risk on 3/19/2013 08:43:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 917,000. This is 0.8 percent above the revised January estimate of 910,000 and is 27.7 percent above the February 2012 rate of 718,000.

Single-family housing starts in February were at a rate of 618,000; this is 0.5 percent above the revised January figure of 615,000. The February rate for units in buildings with five units or more was 285,000.

Building Permits:
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 946,000. This is 4.6 percent above the revised January rate of 904,000 and is 33.8 percent above the February 2012 estimate of 707,000.

Single-family authorizations in February were at a rate of 600,000; this is 2.7 percent above the revised January figure of 584,000. Authorizations of units in buildings with five units or more were at a rate of 316,000 in February.

Click on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years.

Multi-family starts (red, 2+ units) increased slightly in February.

Single-family starts (blue) increased to 618,000 in February and are at the highest level since June 2008.

The second graph shows total and single unit starts since 1968.

This shows the huge collapse following the housing bubble, and that housing starts have been increasing lately after moving sideways for about two years and a half years.

Total starts are up about 90% from the bottom start rate, and single family starts are up about 75% from the post-bubble low.

This was at expectations of 919 thousand starts in February. Starts in February were up 27.7% from February 2012; single family starts were up 31.5% year-over-year. Starts in December and January were revised up, and permits were strong. I'll have more later, but this was another solid report.

All Housing Investment and Construction Graphs

by Calculated Risk on 3/18/2013 07:59:00 PM

First on Cyprus: The bank holiday has been extended through Thursday. Negotiations are ongoing on changes to the depositor levy.

From Izabella Kaminska at Alphaville: First they came for the deposits .... She starts:

This won’t be popular.

But it’s an important alternative to the “it’s expropriation” view on Cyprus.

While the decision to force a bank levy on depositors creates an important precedent, it also represents something much more complex than pure confiscation or forfeiture. ...

And she concludes:

The moral of the story being: if you hold money in a weak bank — especially one with no hope of nationalization — better to withdraw your money and spend it on longer lasting durable options instead. That includes everything from durable goods to equities of companies that make durable, long-lasting or innovative goods which are likely to be needed by you and the population in the future ...

Deposit insurance doesn't work for a country without their own currency that would be bankrupt if certain banks failed (like Cyprus). Clearly the eurozone needs to have eurozone wide deposit insurance (and eurozone wide bank supervision). Another reason the euro is flawed.

On the lighter side, I suppose the European crisis has been good for geography teachers and many Americans can now find Cyprus on a map.  

Tuesday economic releases:
• At 8:30 AM, The Census Bureau will release Housing Starts for February. The consensus is for total housing starts to increase to 919 thousand (SAAR) in February, up from 890 thousand in January and up 28% from the 718 thousand SAAR in February 2012.

by Calculated Risk on 3/18/2013 02:46:00 PM

Weekly Update: One of key questions for 2013 is Will Housing inventory bottom this year?. Since this is a very important question, I'm tracking inventory weekly this year.

In normal times, there is a clear seasonal pattern for inventory, with the low point for inventory in late December or early January, and then peaking in mid-to-late summer.

The NAR data is monthly and released with a lag.  However Ben at Housing Tracker (Department of Numbers) kindly provided me some weekly inventory data for the last several years. This is displayed on the graph below as a percentage change from the first week of the year (to normalize the data).

In 2010 (blue), inventory followed the normal seasonal pattern, however in 2011 and 2012, there was only a small increase in inventory early in the year, followed by a sharp decline for the rest of the year.

So far - through March 18th - it appears inventory is increasing at a sluggish rate, but faster than in 2011 and 2012. Housing Tracker reports inventory is down -22.2% compared to the same week in 2012 - still a rapid year-over-year decline.

Click on graph for larger image.

Note: the data is a little weird for early 2011 (spikes down briefly).

The key will be to see how much inventory increases over the next few months. In 2010, inventory was up 15% by the end of March, and close to 20% by the end of April.

For 2011 and 2012, inventory only increased about 5% at the peak and then declined for the remainder of the year.

So far in 2013, inventory is up 6.0% (above the peak percentage increase for 2011 and 2012) Right now I think inventory will not bottom until 2014, but it is still possible that inventory will bottom this year.

by Calculated Risk on 3/18/2013 01:21:00 PM

I've been following port traffic for some time. Container traffic gives us an idea about the volume of goods being exported and imported - and possibly some hints about the trade report for February. LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 4% in February, and outbound traffic down slightly, compared to the rolling 12 months ending in January.

In general, inbound traffic has been increasing slightly recently, and outbound traffic has been mostly moving sideways.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March.  Inbound traffic was up sharply year-over-year in February, but that is probably seasonal (perhaps related to timing of the Chinese New Year).  This usually means the the sharp seasonal decline will happen in March.

For the month of February, loaded outbound traffic was up 4% compared to February 2012, and loaded inbound traffic was up sharply.

This suggest an increase in the trade deficit with Asia for February.

by Calculated Risk on 3/18/2013 11:22:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Regional and state unemployment rates were little changed in January. Twenty-five states and the District of Columbia recorded unemployment rate increases, 8 states posted decreases, and 17 states had no change, the U.S. Bureau of Labor Statistics reported today.
...
California and Rhode Island recorded the highest unemployment rates among the states in January, 9.8 percent each.

Click on graph for larger image in graph gallery.

This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are below the maximum unemployment rate for the recession.

The size of the blue bar indicates the amount of improvement - Michigan and Nevada have seen the largest declines - New Jersey is the laggard.

The states are ranked by the highest current unemployment rate. No state has double digit unemployment for the first time since late 2008 (Note: with revisions, no state had double a digit unemployment rate in Dec 2012 too). In early 2010, 18 states and D.C. had double digit unemployment rates.

Nevada has had the highest unemployment rate in the nation since early 2010 (Michigan led the nation before Nevada).  Now California and Rhode Island have the highest rate.  The unemployment rate in Nevada has fallen very quickly from 12.1% in August 2012 to 9.7% in January 2013.

All current employment graphs