by Calculated Risk on 8/03/2013 01:11:00 PM

The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods. Unfortunately there is very little data for the Great Depression.

In April 2012, Treasury released a slide deck titled Financial Crisis Response In Charts. One of the charts shows the percentage jobs lost in the current recession compared to the Great Depression.

Here is that graph (I've modified the graph slightly and added a few dots to update the current recession).

Click on graph for larger image.

This graph compares the job losses from the start of the employment recession, in percentage terms for the Great Depression, the 2007 recession, and the average for several recent recession following financial crisis.

Although the 2007 recession is much worse than any other post-war recession, the employment impact was much less than during the Depression. Note the second dip during the Depression - that was in 1937 and the result of austerity measures.

For reference, the second graph shows the job losses from the start of the employment recession through July, in percentage terms, compared to other post WWII recessions. 

The Great Depression would be "off the chart".

by Calculated Risk on 8/03/2013 09:00:00 AM

The key reports this week are the ISM service index on Monday and the Trade deficit report on Tuesday.

The Fed's July Senior Loan Officer Survey will be released on Monday.

Yesterday on the employment report:
• July Employment Report: 162,000 Jobs, 7.4% Unemployment Rate
• Employment Report: Steady, but Slow Improvement
• Graphs: Duration of Unemployment, Unemployment by Education, Construction Employment and Diffusion Indexes

----- Monday, August 5th -----
Early: The LPS June Mortgage Monitor report. This is a monthly report of mortgage delinquencies and other mortgage data.

10:00 AM: ISM non-Manufacturing Index for July. The consensus is for a reading of 53.0, up from 52.2 in June. Note: Above 50 indicates expansion, below 50 contraction.

2:00 PM ET: The July 2013 Senior Loan Officer Opinion Survey on Bank Lending Practices from the Federal Reserve.  This might show some slight loosening in lending standards.

----- Tuesday, August 6th -----
8:30 AM: Trade Balance report for June from the Census Bureau.

Imports increased in May, and exports decreased slightly.  

The consensus is for the U.S. trade deficit to decrease to $43.0 billion in June from $45.0 billion in May.

10:00 AM: Trulia Price Rent Monitors for July. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

10:00 AM: Job Openings and Labor Turnover Survey for June from the BLS.

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

Jobs openings increased in May to 3.828 million, up from 3.800 million in April. The number of job openings (yellow) has generally been trending up, but openings are only up 1% year-over-year compared to May 2012. 

Quits were up in May, and quits are up about 2% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

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

3:00 PM: Consumer Credit for June from the Federal Reserve. The consensus is for credit to increase $15.0 billion in June.

----- Thursday, August 8th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 336 thousand from 326 thousand last week.

----- Friday, August 9th -----
10:00 AM: Monthly Wholesale Trade: Sales and Inventories for June. The consensus is for a 0.4% increase in inventories.

by Calculated Risk on 8/02/2013 08:53:00 PM

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

Here is the unofficial problem bank list for August 2, 2013.

Changes and comments from surferdude808:

After a 56 day hiatus, the FDIC got back to closing a bank. The closing and some action terminations and an addition led to several changes this week to the Unofficial Problem Bank List. In all, there were four removals and one addition that leave the list with 726 institutions with assets of $259.1 billion. Last year, the list held 899 institutions with assets of $349.4 billion.

The FDIC closed First Community Bank of Southwest Florida, Fort Myers, FL ($265 million) this Friday. This is the 62nd bank to fail in Florida since 2008, which only trails the 87 banks that have failed in Georgia. Combined, the failures in the two states have cost an estimated $24.4 billion to resolve. Failure costs within the seven states of the FDIC's Atlanta Region have risen to a staggering $31.8 billion.

Actions were terminated against EVB, Tappahannock, VA ($1.1 billion Ticker: EVBS); The Coastal Bank, Savannah, GA ($443 million); and Pacific Commerce Bank, Los Angeles, CA ($160 million Ticker: PFCI).

The Federal Reserve issued a Written Agreement against Port Byron State Bank, Port Byron, IL ($88 million). This is the first safety & soundness enforcement actions issued by the Federal Reserve since April 25, 2013.

There is nothing new to report on the remaining banks controlled by Capitol Bancorp, Ltd. Next week will likely be a light week in terms of changes.

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The number of unofficial problem banks grew steadily and peaked at 1,002 institutions on June 10, 2011. The list has been declining since then.

Earlier on the employment report:
• July Employment Report: 162,000 Jobs, 7.4% Unemployment Rate
• Employment Report: Steady, but Slow Improvement
• Graphs: Duration of Unemployment, Unemployment by Education, Construction Employment and Diffusion Indexes

by Calculated Risk on 8/02/2013 05:52:00 PM

From the FDIC: C1 Bank, Saint Petersburg, Florida, Assumes All of the Deposits of First Community Bank of Southwest Florida, Fort Myers, Florida

As of March 31, 2013, First Community Bank of Southwest Florida had approximately $265.7 million in total assets and $254.2 million in total deposits. ... The FDIC estimates that cost to the Deposit Insurance Fund will be $27.1 million. ... First Community Bank of Southwest Florida is the 17th FDIC-insured institution to fail in the nation this year, and the third in Florida.

The FDIC gets back to work.   At the current pace, the number of bank failures this year will be the lowest since 2008 when 25 banks failed.

Earlier on the employment report:
• July Employment Report: 162,000 Jobs, 7.4% Unemployment Rate
• Employment Report: Steady, but Slow Improvement
• Graphs: Duration of Unemployment, Unemployment by Education, Construction Employment and Diffusion Indexes

by Calculated Risk on 8/02/2013 04:16:00 PM

Earlier on the employment report:
• July Employment Report: 162,000 Jobs, 7.4% Unemployment Rate
• Employment Report: Steady, but Slow Improvement


A few more employment graphs by request ...

Duration of Unemployment
This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.

The general trend is down for all categories, but only the less than 5 weeks is back to normal levels. 

The long term unemployed is at 2.7% of the labor force - the lowest since May 2009 - however the number (and percent) of long term unemployed remains a serious problem.

Unemployment by Education
This graph shows the unemployment rate by four levels of education (all groups are 25 years and older).

Unfortunately this data only goes back to 1992 and only includes one previous recession (the stock / tech bust in 2001). Clearly education matters with regards to the unemployment rate - and it appears all four groups are generally trending down.

Although education matters for the unemployment rate, it doesn't appear to matter as far as finding new employment - and the unemployment rate is moving sideways for those with a college degree!

Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed".

Construction Employment
This graph shows total construction employment as reported by the BLS (not just residential).

Since construction employment bottomed in January 2011, construction payrolls have increased by 358 thousand.    According to the BLS, essentially no construction jobs have been over the last five months.  Historically there is a lag between an increase in activity and more hiring - and it appears hiring should pickup significant in the 2nd half of 2013 (I also think construction employment will be revised up in the annual revision).

Diffusion Indexes
 The BLS diffusion index for total private employment was at 54.5 in July, down from 57.3 in June.

For manufacturing, the diffusion index increased to 50.0, up from 45.7 in June.

Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS. From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.

Job growth for total private employment was not widespread in July.