by Calculated Risk on 5/02/2014 08:30:00 AM

From the BLS:

Total nonfarm payroll employment rose by 288,000, and the unemployment rate fell by 0.4 percentage point to 6.3 percent in April, the U.S. Bureau of Labor Statistics reported today.
...
The change in total nonfarm payroll employment for February was revised from +197,000 to +222,000, and the change for March was revised from +192,000 to +203,000. With these revisions, employment gains in February and March were 36,000 higher than previously reported.

Click on graph for larger image.

The headline number was well above expectations of 215,000 payroll jobs added.

The first graph shows the job losses from the start of the employment recession, in percentage terms, compared to previous post WWII recessions. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.


Employment is 0.1% below the pre-recession peak (113 thousand fewer total jobs - almost back).  Private employment is now solidly above the pre-recession peak by 406 thousand.

NOTE: The second graph is the change in payroll jobs ex-Census - meaning the impact of the decennial Census temporary hires and layoffs is removed to show the underlying payroll changes.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was decreased in April to 62.8%. This is the percentage of the working age population in the labor force. 

The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although a significant portion of the recent decline is due to demographics.


The Employment-Population ratio was unchanged in April at 58.9% (black line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was declined sharply in April at 6.3%.

This was a solid employment report, and including revisions, was well above expectations.


I'll have much more later ... 

by Calculated Risk on 5/01/2014 08:01:00 PM

Speaking of jobs, the Office of Inspector General released their report on the claims that the unemployment rate was manipulated prior to the 2012 election: Unsubstantiated Allegations that the Philadelphia Regional Office Manipulated the Unemployment Survey Leading up to the 2012 Presidential Election to Cause a Decrease in the National Unemployment Rate

In October 2013, OIG received information alleging that management in the U.S. Census Bureau’s Philadelphia Regional Office instructed staff to falsify survey responses on the AHS and the CPS. Following this complaint, additional allegations were presented in various media publications, which reported widespread data falsification in the Census Bureau’s Philadelphia Regional Office.

OIG thoroughly investigated these allegations, and found no evidence that management in the Philadelphia Regional Office instructed staff to falsify data at any time for any reason. Further, we found no evidence of systemic data falsification in the Philadelphia Regional Office. Addressing allegations raised in the media, we found no evidence that the national unemployment rate was manipulated by staff in the Philadelphia Regional Office in the months leading up to the 2012 presidential election.

Jack Welch should not only apologize for his false accusations, but he should pay the cost of the investigation!

Friday:
• At 8:30 AM ET, the Employment Report for April. The consensus is for an increase of 215,000 non-farm payroll jobs in April, up from the 192,000 non-farm payroll jobs added in March. The consensus is for the unemployment rate to decline to 6.6% in April

• At 10:00 AM, Manufacturers' Shipments, Inventories and Orders (Factory Orders) for March. The consensus is for a 1.3% increase in March orders.

by Calculated Risk on 5/01/2014 05:45:00 PM

Friday at 8:30 AM ET, the BLS will release the employment report for April. The consensus, according to Bloomberg, is for an increase of 215,000 non-farm payroll jobs in April (range of estimates between 190,000 and 279,000), and for the unemployment rate to decline to 6.6%.

Note: The BLS reported 192,000 payroll jobs added in March with the unemployment rate at 6.7%.

Here is a summary of recent data:

• The ADP employment report showed an increase of 220,000 private sector payroll jobs in April. This was close to expectations of 210,000 private sector payroll jobs added. The ADP report hasn't been very useful in predicting the BLS report for any one month, but in general, this suggests employment growth close to expectations.

• The ISM manufacturing employment index increased in April to 54.7%. A historical correlation between the ISM manufacturing employment index and the BLS employment report for manufacturing, suggests that private sector BLS manufacturing payroll jobs increased about 6,000 in April. The ADP report indicated a 1,000 increase for manufacturing jobs in April.

This month the ISM non-manufacturing (service) report will be released on Monday, May 5th - after the release of the BLS employment report.

• Initial weekly unemployment claims averaged close to 320,000 in April. This was essentially unchanged from March.   For the BLS reference week (includes the 12th of the month), initial claims were at 304,000; this was down from 323,000 during the reference week in March.

This suggests some upside to the consensus forecast.

• The final April Reuters / University of Michigan consumer sentiment index increased to 84.1 from the March reading of 80.0. This is frequently coincident with changes in the labor market, but there are other factors too.

• The small business index from Intuit showed a 25,000 increase in small business employment in April - the largest gain in a year:

“This month’s employment increase comes after three successive months with little-to-no small business employment growth. In fact, it’s the fastest rate we’ve seen over the past year,” said Susan Woodward, the economist who works with Intuit to create the indexes. “Despite this growth, these figures do not paint an optimistic picture. We still have an economy with high unemployment."

• Conclusion: The ADP report was higher in April compared to the March report - and in line with most forecasts, weekly unemployment claims were low during the reference period, the Intuit small business index showed the most hiring in a year, and the ISM manufacturing survey suggests an increase in hiring (but the the service sector report isn't available).   Most of the indicators suggest a solid employment report.

Also - it is possible that there will be some additional bounce back from the below trend employment reports over the winter (weather related). 

There is always some randomness to the employment report, but the I'll take the over on the consensus forecast of 215,000 nonfarm payrolls jobs added in April.

by Calculated Risk on 5/01/2014 03:14:00 PM

Based on an AutoData estimate, light vehicle sales were at a 16.04 million SAAR in April. That is up 5.5% from April 2013, and down 2% from the sales rate last month. 

This was below the consensus forecast of 16.2 million SAAR (seasonally adjusted annual rate).

Click on graph for larger image.

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for April (red, light vehicle sales of 16.04 million SAAR from AutoData).

Severe weather clearly impacted sales in January and February, and some of the increase in March was probably a bounce back due to better weather.  Sales in April were probably a return to trend.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate.

Unlike residential investment, auto sales bounced back fairly quickly following the recession and were a key driver of the recovery.   

Looking forward, the growth rate will slow for auto sales, and most forecasts are for around a small gain in 2014 to around 16.1 million light vehicles. 

by Calculated Risk on 5/01/2014 12:17:00 PM

M.D.C. Holdings reported that net home orders in the quarter ended March 31, 2014 totaled 1,236, down 4.9% from the comparable quarter of 2013. Net orders per active community were down 9.6% from a year ago. The company’s sales cancellation rate, expressed as a % of gross orders, was 19% last quarter, up slightly from 18% a year earlier. Home deliveries last quarter totaled 873, down 14.2% from the comparable quarter of 2013, at an average sale price of $377,000, up 11.1% from a year ago. The company’s order backlog at the end of March was 1,625, down 15.7% from last March. M.D.C. owned or controlled 16,043 lots at the end of March, up 25.9% from a year ago, and the company’s active community count at the end of March was 157, up 13% from last March.

M.D.C. attributed the increase in its average sales price both to price appreciation in “many” of its markets and to a shift in the mix of homes closed. The biggest YOY declines in net orders per active community were in Nevada, Virginia, Maryland, and Arizona.

Beazer Homes reported that net home orders in the quarter ended March 31, 2014 totaled 1,390, down 8.6% from the comparable quarter of 2013. Beazer’s net orders per community last quarter were down 2.9% from a year earlier. The company’s sales cancellation rate, expressed as a % of gross orders, was 19.4% last quarter, up slightly from 18.7% a year ago. Home deliveries totaled 977 last quarter, down 13.3% from the comparable quarter of 2013, at an average sales price of $272,400, up 7.5% from a year ago. The company’s order backlog at the end of March was 2,163, down 2.2% from last March. Beazer owned or controlled 29,331 lots at the end of March, up 18.8% from last March.

Below are some summary stats for 8 large publicly-traded home builders.

As the table indicates, net orders at these eight builders combined last quarter were virtually flat from the comparable quarter of last year. While not all of these builders released active community count numbers, based on conference call comments I estimate that net orders per community for the eight builders as a whole last quarter were down about 6% from a year ago.

	Net Orders			Settlements			Average Closing Price
Qtr. Ended:	3/14	3/13	% Chg	3/14	3/13	% Chg	3/14	3/13	% Chg
D.R. Horton	8,569	7,879	8.8%	6,194	5,463	13.4%	$271,230	$242,548	11.8%
Pulte Group	4,863	5,200	-6.5%	3,436	3,833	-10.4%	$317,000	$287,000	10.5%
NVR	3,325	3,510	-5.3%	2,211	2,272	-2.7%	$361,400	$330,400	9.4%
The Ryland Group	2,186	2,052	6.5%	1,470	1,315	11.8%	$327,000	$277,000	18.1%
Meritage Homes	1,525	1,547	-1.4%	1,109	1,052	5.4%	$365,896	$314,363	16.4%
M/I Homes	982	1,047	-6.2%	737	627	17.5%	$299,000	$284,000	5.3%
Total	21,450	21,235	1.0%	15,157	14,562	4.1%	$308,445	$278,040	10.9%