by Calculated Risk on 2/03/2012 10:14:00 PM

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

Here is the unofficial problem bank list for Feb 3, 2012. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

Quiet week for the Unofficial Bank List with no closings, one voluntary liquidation, and one addition. The list is unchanged at 958 institutions but assets increased by nearly $600 million to $389.6 billion. The First National Bank of Ordway, Ordway, CO ($45 million) underwent a voluntary liquidation in late January. The sole addition was Community West Bank, National Association, Goleta, CA ($643 million Ticker: CWBC) after the OCC issued a Consent Order against the bank. The only other change was a Prompt Corrective Action order issued by the Federal Reserve against Bank of Bartlett, Bartlett, TN ($371 million). Next week will likely be quiet as well.

Earlier Employment posts:
• January Employment Report: 243,000 Jobs, 8.3% Unemployment Rate
• Graphs: Unemployment Rate, Participation Rate, Jobs added
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• Construction Employment, Duration of Unemployment, Unemployment by Education and Diffusion Indexes
• All Employment Graphs

by Calculated Risk on 2/03/2012 06:23:00 PM

Some readers sent me a link to some terrible analysis that argued over 1 million people left the labor force in January. I pointed out the error. Apparently Rick Santelli at CNBC made the same mistake and reads the wrong blogs!

The Bonddad blog points out the error: No Rick Santelli and Zero Hedge, One Million People Did Not Drop Out of the Labor Force Last Month (CR note: I never read zero).

This does bring up an important point: The BLS updated the population estimates today based on the 2010 Census. I mentioned this in the preview yesterday and in the posts this morning. For whatever reason, the Census Bureau doesn't go back and revise the earlier population estimates, but they do provide analysis of the changes in several key numbers if the population estimate hadn't been changed.

Below is the table from the BLS:

With the 2010 population controls, the "not in labor force" appeared to have increased by 1.2 million in January, and the working age population jumped 1.7 million. That didn't happen last month; the numbers changed because of the new population estimate. This does suggests there are 1.2 million more people out of the labor force than we originally thought, but that is because the working age population is larger than previously estimated.

As the BLS points out, without the population change the "not in labor force" actually declined.

A couple other key points:
1) The decline in the participation rate was entirely due to the population change.
2) The employment-population ration would have increased 0.3 (good news) without the population change.

Category	Dec.-Jan. change, as published	2012 population control effect	Dec.-Jan. change, after removing the population control effect1
Civilian noninstitutional population	1,685	1,510	175
Civilian labor force	508	258	250
Participation rate	-0.3	-0.3	0
Employed	847	216	631
Employment-population ratio	0	-0.3	0.3
Unemployed	-339	42	-381
Unemployment rate	-0.2	0	-0.2
Not in labor force	1,177	1,252	-75
1This Dec.-Jan. change is calculated by subtracting the population control effect from the over-the-month change in the published seasonally adjusted estimates.

Earlier Employment posts:
• January Employment Report: 243,000 Jobs, 8.3% Unemployment Rate
• Graphs: Unemployment Rate, Participation Rate, Jobs added
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• Construction Employment, Duration of Unemployment, Unemployment by Education and Diffusion Indexes
• All Employment Graphs

by Calculated Risk on 2/03/2012 03:28:00 PM

The first graph below shows the number of total construction payroll jobs in the U.S. including both residential and non-residential since 1969.

Construction employment increased by 21 thousand jobs in January, after increasing by 74 thousand jobs in all of 2011. Last year was the first year with an increase in construction employment since 2006, and the first with an increase in residential construction employment since 2005.

Unfortunately this graph is a combination of both residential and non-residential construction employment. The BLS only started breaking out residential construction employment fairly recently (residential specialty trade contractors in 2001).

Usually residential investment (and residential construction) leads the economy out of recession, and non-residential construction usually lags the economy. Because this graph is a blend, it masks the usual pickup in residential construction following previous recessions. Of course there was no pickup for residential construction this time because of the large excess supply of vacant homes.

Click on graph for larger image.

Construction employment is now increasing and construction will add to both GDP and employment growth in 2012.

As I've noted for years, there are usually two bottoms for housing following a bubble: 1) when housing starts, new home sales, and residential construction bottoms, and 2) when house prices bottom. The bottom is in for construction and we are getting close on prices.

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.

All categories are moving down (the less than 5 week category is back to normal levels). The other categories are still high.

The the long term unemployed declined to 3.6% of the labor force - this is still very high, but the lowest since September 2009.

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.

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

Diffusion Indexes
This is a little more technical. The BLS diffusion index for total private employment was at 64.1 in January, up from 62.4 in December. For manufacturing, the diffusion index increased to 69.1, up from 64.2 in December.

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.

It appears job growth was spread across more industries in January (good news).

We'd like to see the diffusion indexes consistently above 60 - and even in the 70s like in the '1990s.

Earlier Employment posts:
• January Employment Report: 243,000 Jobs, 8.3% Unemployment Rate
• Graphs: Unemployment Rate, Participation Rate, Jobs added
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• All Employment Graphs

by Calculated Risk on 2/03/2012 12:56:00 PM

Catching up: The January ISM Non-manufacturing index was at 56.8%, up sharply from 53.0% in December. The employment index increased in January to 57.4%, up from 49.8% in December. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: December 2011 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in January for the 25th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI registered 56.8 percent in January, 3.8 percentage points higher than the seasonally adjusted 53 percent registered in December, and indicating continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 59.5 percent, which is 3.6 percentage points higher than the seasonally adjusted 55.9 percent reported in December, reflecting growth for the 30th consecutive month. The New Orders Index increased by 4.8 percentage points to 59.4 percent, and the Employment Index increased by 7.6 percentage points to 57.4 percent, indicating substantial growth in employment after one month of contraction. The Prices Index increased 1.5 percentage points to 63.5 percent, indicating prices increased at a slightly faster rate in January when compared to December. According to the NMI, 12 non-manufacturing industries reported growth in January. Respondents' comments are mostly positive about business conditions. There is concern about cost pressures and the sustainability of the recent spike in activity.

Click on graph for larger image.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was well above the consensus forecast of 53.3% and indicates faster expansion in January than in December.

Earlier Employment posts:
• January Employment Report: 243,000 Jobs, 8.3% Unemployment Rate
• Graphs: Unemployment Rate, Participation Rate, Jobs added
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• All Employment Graphs

by Calculated Risk on 2/03/2012 10:54:00 AM

This was a solid report and well above expectations. However there is still a long ways to go for a healthy labor market with solid wage gains.

There were 243,000 payroll jobs added in January, with 257,000 private sector jobs added, and 14,000 government jobs lost. The unemployment rate fell to 8.3% from 8.5% in December. U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, declined to 15.1%. This remains very high - U-6 was in the 8% range in 2007.

The annual benchmark revision indicated 165,000 more payroll jobs in March 2011; the first positive benchmark revision since 2006. The BLS also adjusted the population control by the Census 2010 data. This resulted in a large increase in the labor force and an even larger increase in the "not in the labor force" category.

However - in the not good news category - the participation rate declined to 63.7% and the employment population ratio was unchanged in January at 58.5%.

The average workweek was unchanged at 34.4 hours, and average hourly earnings increased 0.2%. "The average workweek for all employees on private nonfarm payrolls was unchanged in January. ... In January, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.29. Over the past 12 months, average hourly earnings have increased by 1.9 percent." This is sluggish earnings growth, and earnings are still being impacted by the large number of unemployed and marginally employed workers.

There are a total of 12.8 million Americans unemployed and 5.5 million have been unemployed for more than 6 months. Still very grim.

Overall this was a solid report, but still not enough given the slack in the economy.

Percent Job Losses During Recessions

Click on graph for larger image.

This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.

In the previous post, the graph showed the job losses aligned at the start of the employment recession.

Part Time for Economic Reasons

From the BLS report:

The number of persons employed part time for economic reasons, at 8.2 million, changed little in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

The number of part time workers increased slightly in January and is still very high.

These workers are included in the alternate measure of labor underutilization (U-6) that declined to 15.1% in January from 15.2% in December.

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 5.518 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.588 million in November. This is very high, but this is the lowest number since September 2009. Long term unemployment remains a serious problem.

More graphs coming ...
All Employment Graphs