by Calculated Risk on 11/02/2014 08:30:00 PM

From the SacBee: Sacramento gas prices under $3 per gallon are part of nationwide trend

AAA reported that the average gas price nationally dropped by 33 cents in October, reaching $2.99 on Saturday. That was the first time in four years that the national average dropped below $3.

Nice!

Monday:
• Early, Black Knight Mortgage Monitor report for September.

• All day, Light vehicle sales for October. The consensus is for light vehicle sales to increase to 16.6 million SAAR in October from 16.3 million in September (Seasonally Adjusted Annual Rate).

• At 10:00 AM ET, the ISM Manufacturing Index for October. The consensus is for a decrease to 56.0 from 56.6 in September. The ISM manufacturing index indicated expansion in September at 56.6%. The employment index was at 54.6%, and the new orders index was at 60.0%.

• Also at 10:00 AM, Construction Spending for September. The consensus is for a 0.6% increase in construction spending.

Weekend:
• Schedule for Week of November 2nd

• Retail: October Seasonal Hiring vs. Holiday Retail Sales

From CNBC: Pre-Market Data and Bloomberg futures: currently the S&P futures are down slightly and DOW futures are also down slightly (fair value).

Oil prices were down over the last week with WTI futures at $80.54 per barrel and Brent at $85.86 per barrel.  A year ago, WTI was at $96, and Brent was at $107 - so prices are down close to 20%  year-over-year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $2.98 per gallon (down almost 30 cents from a year ago).  If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 11/02/2014 11:17:00 AM

Every year I track seasonal retail hiring for hints about holiday retail sales.

At the bottom of this post is a graph showing the correlation between October seasonal hiring and holiday retail sales.

First, here is the NRF forecast for this year: Optimism Shines as National Retail Federation Forecasts Holiday Sales to Increase 4.1

[T]he National Retail Federation ... expects sales in November and December (excluding autos, gas and restaurant sales) to increase a healthy 4.1 percent to $616.9 billion, higher than 2013’s actual 3.1 percent increase during that same time frame.

According to NRF, retailers are expected to hire between 725,000 and 800,000 seasonal workers this holiday season, potentially more than they actually hired during the 2013 holiday season (768,000). Seasonal employment in 2013 increased 14 percent over the previous holiday season.

Note: NRF defines retail sales as including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.

Here is a graph of retail hiring for previous years based on the BLS employment report:

Click on graph for larger image.

This graph shows the historical net retail jobs added for October, November and December by year.

Retailers hired about 786 thousand seasonal workers last year (using BLS data, Not Seasonally Adjusted), and 160 thousand seasonal workers last October.

The following scatter graph is for the years 1993 through 2013 and compares October retail hiring with the real increase (inflation adjusted) for retail sales (Q4 over previous Q4).

In general October hiring is a pretty good indicator of seasonal sales. R-square is 0.70 for this small sample. Note: This uses retail sales in Q4, and excludes autos, gasoline and restaurants.  Note: The NRF is just looking at November and December.

When the October employment report is released this coming Friday, I'll be looking at seasonal retail hiring for hints if retailers expect a strong holiday season.

by Calculated Risk on 11/01/2014 06:46:00 PM

Fannie Mae reported yesterday that the Single-Family Serious Delinquency rate declined in September to 1.96% from 1.99% in August. The serious delinquency rate is down from 2.55% in September 2013, and this is the lowest level since October 2008.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Earlier this week, Freddie Mac reported that the Single-Family serious delinquency rate declined in September to 1.96% from 1.98% in August. Freddie's rate is down from 2.58% in September 2013, and is at the lowest level since December 2008. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

Note: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

The Fannie Mae serious delinquency rate has fallen 0.59 percentage points over the last year, and at that pace the serious delinquency rate will be under 1% in 2016 - although the rate of decline has slowed recently.

Note: The "normal" serious delinquency rate is under 1%.

Maybe serious delinquencies will be close to normal in late 2016.

by Calculated Risk on 11/01/2014 01:01:00 PM

The key report this week is the October employment report on Friday.

Other key reports include the October ISM manufacturing index and October vehicle sales, both on Monday, the September Trade Deficit on Tuesday, and September ISM non-manufacturing index on Wednesday.

----- Monday, November 3rd -----
Early: Black Knight Mortgage Monitor report for September.

All day: Light vehicle sales for October. The consensus is for light vehicle sales to increase to 16.6 million SAAR in October from 16.3 million in September (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the September sales rate.

10:00 AM: ISM Manufacturing Index for October. The consensus is for a decrease to 56.0 from 56.6 in September

Here is a long term graph of the ISM manufacturing index.

The ISM manufacturing index indicated expansion in September at 56.6%. The employment index was at 54.6%, and the new orders index was at 60.0%.

10:00 AM: Construction Spending for September. The consensus is for a 0.6% increase in construction spending.

----- Tuesday, November 4th -----
8:30 AM: Trade Balance report for September from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through August. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be at $40.7 billion in September from $40.1 billion in August.

10:00 AM: Manufacturers' Shipments, Inventories and Orders (Factory Orders) for September. The consensus is for a 0.7 decrease in September orders.

----- Wednesday, November 5th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for October. This report is for private payrolls only (no government). The consensus is for 212,000 payroll jobs added in October, down from 213,000 in September.

10:00 AM: ISM non-Manufacturing Index for October. The consensus is for a reading of 58.0, down from 58.6 in September. Note: Above 50 indicates expansion.

----- Thursday, November 6th -----
Early: Trulia Price Rent Monitors for October. 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.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 283 thousand from 287 thousand.

----- Friday, November 7th -----
8:30 AM: Employment Report for October. The consensus is for an increase of 240,000 non-farm payroll jobs added in October, down from the 248,000 non-farm payroll jobs added in September.

The consensus is for the unemployment rate to be unchanged at 5.9% in October.

This graph shows the year-over-year change in total non-farm employment since 1968.

In September, the year-over-year change was 2.635 million jobs, and it appears the pace of hiring is increasing.  Right now it looks like 2014 will be the best year since 1999 for both total nonfarm and private sector employment growth.

As always, a key will be the change in real wages - and as the unemployment rate falls, wage growth should eventually start to pickup.

3:00 PM: Consumer Credit for September from the Federal Reserve.  The consensus is for credit to increase $16.0 billion.

by Calculated Risk on 11/01/2014 08:11:00 AM

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

Here is the unofficial problem bank list for Oct 31, 2014.

Changes and comments from surferdude808:

As expected, the FDIC provided an update on its enforcement action activities. Their disclosure has to be the shortest list of new actions and terminations since the on-set of the Great Recession. In all, there were three removals and two additions to the Unofficial Problem Bank List this week. After the changes, the list holds 422 institutions with assets of $133.5 billion. For the month of October, the list declined by a net 10 institutions after eight action terminations, three mergers, two failures, and three additions.

The FDIC terminated actions against Decatur State Bank, Decatur, AR ($144 million); Lone Star Bank, Houston, TX ($106 million); and The Bank of Kaukauna, Kaukauna, WI ($84 million).

New to the list is Polonia Bank, Huntingdon Valley, PA ($300 million Ticker PBCP) and Proficio Bank, Cottonwood Heights, UT ($199 million).

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 422.