by Calculated Risk on 8/15/2013 08:30:00 AM

The DOL reports:

In the week ending August 10, the advance figure for seasonally adjusted initial claims was 320,000, a decrease of 15,000 from the previous week's revised figure of 335,000. The 4-week moving average was 332,000, a decrease of 4,000 from the previous week's revised average of 336,000.

The previous week was revised up from 333,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.

Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 332,000.

The 4-week average is at the lowest level since November 2007 (before the recession started).  Claims were below the 330,000 consensus forecast.

by Calculated Risk on 8/14/2013 07:52:00 PM

First, here is a price index for commercial real estate that I follow. From CoStar: Commercial Real Estate Prices See Midyear Surge

COMMERCIAL REAL ESTATE PRICES SURGE IN SECOND QUARTER 2013: On the strength of improving market fundamentals, the two broadest measures of aggregate pricing for commercial properties within the CCRSI — the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index — continued their upward trend in June. The value-weighted index, which is influenced by larger transactions and generally tracks with high quality core real estate properties, gained 5.9% in the second quarter, its best quarterly showing since 2011. Meanwhile, the equal-weighted index, which is comprised of smaller, more numerous transactions representative of the lower end of the market, jumped by an impressive 9.1% in the second quarter, its strongest quarterly gain on record.
...
RETAIL TURNS IN STRONGEST PERFORMANCE OF MAJOR PROPERTY TYPES: Stronger consumer spending and a near dearth in new construction helped to bolster pricing gains for retail properties as reflected in the 16% gain in the CCRSI Retail Index over the past 12-month period ending in the second quarter, the strongest performance of the four major property types. Meanwhile, pricing in the Office Index advanced by 11.4%, while the Multifamily Index gained a more modest 11.1% year over year.
...
DISTRESS SALES CONTINUE TO ABATE: The percentage of commercial property selling at distressed prices dropped to just 13.6% in June 2013, down from nearly 24% one year earlier, the lowest level of distress recorded since the end of 2008. The long-term average for distress trading is less than 1% of total volume, so the recovery still has a ways to go, but the recent declines have helped to boost liquidity and pricing by giving lenders more confidence to do deals.
emphasis added

Note: These are repeat sales indexes - like Case-Shiller for residential - but this is based on far fewer pairs.

Thursday:
• At 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 330 thousand from 333 thousand last week.

• Also at 8:30 AM, the Consumer Price Index for July. The consensus is for a 0.2% increase in CPI in July and for core CPI to increase 0.2%.

• Also at 8:30 AM: the NY Fed Empire Manufacturing Survey for August. The consensus is for a reading of 10.0, up from 9.5 in July (above zero is expansion).

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for July. The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 77.9%.

• At 10:00 AM, the August NAHB homebuilder survey. The consensus is for a reading of 57, the same as in July. Any number above 50 indicates that more builders view sales conditions as good than poor.

• Also at 10:00 AM, the Philly Fed manufacturing survey for August. The consensus is for a reading of 15.8, down from 19.8 last month (above zero indicates expansion).

by Calculated Risk on 8/14/2013 04:24:00 PM

CR Note: So far the regional data suggests a strong increase for existing home sales in July. If so, my guess is there was a rush to close while buyers had mortgage rates locked in - and sales will decline in August.

From DataQuick: Southland Home Sales Jump in July

Southern California home sales surged in July, rising to an eight-year high for that month as buyers found more homes for sale. ... A total of 25,419 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 17.6 percent from 21,608 sales in June, and up 23.5 percent from 20,588 sales in July 2012, according to San Diego-based DataQuick.

Last month’s sales approached a historically normal level. They were 0.5 percent below the average number of sales – 25,541 – in the month of July since 1988, when DataQuick’s statistics begin. Southland sales haven’t been above average for any particular month in more than seven years.

In a sign of continued market confidence, Southern California home buyers continue to put near-record amounts of their own money into residential real estate. In July they paid a total of $5.39 billion out of their own pockets in the form of down payments or cash purchases. That was up from $5.25 billion in June and up from $3.61 billion a year ago.

“July home sales came in very strong, and we think a lot of the increase in activity can be chalked up to a rising inventory of homes for sale. The jump in mortgage rates a couple of months back might have spurred more buying, too. The market continues its rebalancing act, with more and more people who’ve been ‘underwater’ now able to sell their homes at a profit, or at least break even. As the mismatch between supply and demand eases, it will be more difficult for home prices to rise as steeply as we’ve seen over the past year,” said John Walsh, DataQuick president.

In July foreclosure resales – homes foreclosed on in the prior 12 months – accounted for 7.8 percent of the Southland resale market. That was down from a revised 9.0 percent the month before and down from 20.7 percent a year earlier. Last month’s foreclosure resale rate was the lowest since it was 7.3 percent in June 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 14.5 percent of Southland resales last month. That was the lowest level since it was 14.1 percent in May 2009. Last month’s short sale figure was down from an estimated 16.1 percent the month before and down from 26.2 percent a year earlier.

Absentee buyers – mostly investors and some second-home purchasers – bought 27.4 percent of the Southland homes sold last month, which is the lowest share for any month this year. Last month’s level was down from 28.6 percent in June and down slightly from 27.5 percent a year earlier.
emphasis added

This is moving in the right direction (fewer distressed sales, fewer absentee buyers). However I expect existing home sales to decline in August after the jump in July.

by Calculated Risk on 8/14/2013 01:21:00 PM

By request here is an animation of the U.S population by age (as opposed to by distribution), from 1900 through 2060. The population data and estimates are from the Census Bureau (actual through 2010 and projections through 2060).

Also - by request - I've slowed the animation down to 2 seconds per slide (and included a slower distribution animation below).

There are many interesting points - the Depression baby bust, the baby boom, the 2nd smaller baby bust following the baby boom, the "echo" boom" and more. What jumps out at me are the improvements in health care. And also that the largest cohorts will all soon be under 40. Heck, in the last frame (2060), any remaining Boomers will be in those small (but growing) 95 to 99, and 100+ cohorts.

Animation updates every two seconds.

Notes: Population is in thousands (not labeled)! Prior to 1940, the oldest group in the Census data was "75+".  From 1940 through 1985, the oldest group was "85+".  Starting in 1990, the oldest group is 100+.

The second graph is by distribution (updates every 2 seconds).

by Calculated Risk on 8/14/2013 11:00:00 AM

From the NY Fed: Auto Loan Balances Increase for Ninth Straight Quarter, New York Fed Report Shows

In its latest Household Debt and Credit Report, the Federal Reserve Bank of New York announced that outstanding household debt declined by $78 billion from the previous quarter, due in large part to a decline in housing-related debt. Total auto loan balances increased $20 billion from the previous quarter, the ninth consecutive quarterly increase and the largest quarter over quarter increase since 2006. ...

In Q2 2013 total household indebtedness fell to $11.15 trillion; 0.7 percent lower than the previous quarter and 12 percent below the peak of $12.68 trillion in Q3 2008. Mortgages, the largest component of household debt, fell $91 billion from the first quarter.

“Although overall debt declined in the second quarter, households did increase non-housing debt, led by rising auto loan balances,” said Andrew Haughwout, vice president and research economist at the New York Fed. “Furthermore, households improved their overall delinquency rates for the seventh straight quarter, an encouraging sign going forward.”
emphasis added

Here is the Q2 report: Household Debt and Credit Report

Mortgages, the largest component of household debt, fell in the second quarter of 2013, although the fall was in part due to reporting gaps associated with the servicing transfer of a higher-than-usual number of loans. Mortgage balances shown on consumer credit reports stand at $7.84 trillion, down $91 billion from the level in the first quarter of 2013. Balances on home equity lines of credit (HELOC) dropped by $12 billion (2.2%) and now stand at $540 billion. Household non-housing debt balances increased by 0.9%, bolstered by gains of $20 billion in auto loan balances, $8 billion in student loan balances, and $8 billion in credit card balances.
...
About 380,000 consumers had a bankruptcy notation added to their credit reports in 2013Q2, a 4.8% drop from the same quarter last year, the tenth consecutive quarter with a drop in bankruptcies on a year-over-year basis.

Here are two graphs from the report:

Click on graph for larger image.

The first graph shows aggregate consumer debt decreased in Q2.

Although overall debt is decreasing, Student debt (red) is still increasing. From the NY Fed:

Outstanding student loan balances increased to $994 billion as of June 30, 2013, a $8 billion uptick from the first quarter

The second graph shows the percent of debt in delinquency. In general, the percent of delinquent debt is declining, but what really stands out is the percent of debt 90+ days delinquent (Yellow, orange and red). 

From the NY Fed:

Delinquency rates improved considerably in 2013Q2. As of June 30, 7.6% of outstanding debt was in some stage of delinquency, compared with 8.1% in 2013Q1. About $845 billion of debt is delinquent, with $635 billion seriously delinquent (at least 90 days late or “severely derogatory”).

There are a number of credit graphs at the NY Fed site.