by Calculated Risk on 8/04/2011 08:30:00 AM

The DOL reports:

in In the week ending July 30, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 1,000 from the previous week's revised figure of 401,000 [from 398,000]. The 4-week moving average was 407,750, a decrease of 6,750 from the previous week's revised average of 414,500.

The following graph shows the 4-week moving average of weekly claims since January 2000 (longer term graph in graph gallery).

Click on graph for larger image in graph gallery.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week to 407,750.

The 4-week average is still elevated, but has been moving down since mid-May. This is the lowest level for the 4-week average since early April.

by Calculated Risk on 8/03/2011 09:22:00 PM

Also from CNBC: Japan Intervenes in FX Markets, Dollar Jumps Versus Yen; Finance Minister Holding Emergency Press Conference

From Floyd Norris at the NY Times: The Truth About Fundamentals

Herewith I offer a fundamental law about fundamentals:

If a government feels a need to proclaim that its economic fundamentals are strong, they are not.

And then he quotes Italian Prime Minister Silvio Berlusconi:

“Our economy is healthy. The country is economically and financially solid.”

Of course some people will also point to this comment by White House Spokesman Jay Carney today:

“We do not believe that there is a threat of a double-dip recession.”

I don't think there will be a double-dip in the U.S., but as Paul Krugman noted there is definitely a threat.

Back to Europe. As bond values fall, banks in Italy and Spain that hold many of their home country's bonds, are having funding problems. They are having to turn to the ECB for funding. Another key point from the NY Times: Europe’s Banks Struggle With Weak Bonds

[T]he European Financial Stability Fund, Europe’s so-called bazooka rescue fund that it endowed last month with the powers to recapitalize weak banks, will not be able to offer any such aid for at least two months.

According to a stability fund official, staff members there are working night and day to recast the entity, but do not expect to be finished until the end of August. At that point, it must be approved by the parliaments of the 17 countries that use the euro currency.

The markets may not wait.

Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. And for Spain to Germany. Although the spreads eased slightly today, if the spreads increase much more, Italy and Spain might be knocking on the bailout door.

Earlier:
• ADP: Private Employment increased 114,000 in July
• ISM Non-Manufacturing Index indicates slower expansion in July
• CoreLogic: Home Price Index increased 0.7% in June

by Calculated Risk on 8/03/2011 06:52:00 PM

On graphs: All graphs are free to use - all I ask is credit and a link for online sites, and a mention of http://www.calculatedriskblog.com/ in printed material.

To obtain a large graph, use the Graph Gallery - select a graph (tabs at the top are for the various galleries) and click on "Print" in the lower left.

Data Sources: Enjoy!

I'm frequently asked for sources of data, so here is an updated list ranking economic data. For each indicator I've included a link to the source, and a link to the current graph gallery.

These lists are not exhaustive, and the rankings are not static. As an example, right now initial weekly unemployment claims is ‘B List’ data, but when (if) the expansion takes hold, weekly claims will move unceremoniously to the 'D List'.

I've marked several indicators with '***' indicating I think this data is currently more important than usual. This includes weekly claims and several real estate related releases (delinquency reports, negative equity, vacancy rates).

Some of the lower ranked data is useful as leading indicators. As an example, the Architecture Billings Index is a leading indicator for investment in commercial real estate. And the NMHC apartment survey leads changes in apartment rents and vacancy rates. Also some of the lower ranked data helps forecast some of the more important data.

Note: There has been some research (by Wall Street analysts) about how "surprises" for many of these indicators impact the stock market. In general the ranking is similar to this list, with the employment situation report being #1. Surprisingly (at least to me) investors tend to react more to "surprises" for existing home sales than new home sales, even though the later is far more important from an economic perspective.

A-List
• BLS: Employment Situation Report (Employment Graphs)
• BEA: GDP Report (quarterly) (GDP Graphs)

B-List
• Census: New Home Sales (New Home Graphs)
• Census: Housing Starts (Housing Graphs)
• ISM Manufacturing Index (ISM Graph)
• Census: Retail Sales (Retail Graphs)
• BEA: Personal Income and Outlays (graph)
• Fed: Industrial Production (graphs IP and Capacity Utilization)
• BLS: Core CPI (graph CPI)
• ***DOL: Weekly Initial Unemployment Claims (graph weekly claims)

C-List
• Philly Fed Index (Graph Philly Fed)
• NY Fed Empire State Manufacturing Index (Graph Empire Index)
• Chicago ISM: Chicago PMI
• Census: Durable Goods
• ISM Non-Manufacturing Index (Graphs)
• House Prices: Case-Shiller and CoreLogic (House Price Graphs)
• NAR: Existing Home Sales (Graphs Existing Home)
• NAHB: Housing Market Index (Graph NAHB HMI)
• Census: Trade Balance (Graph Trade Balance)
• ***MBA: Mortgage Delinquency Data (Quarterly) (Graph MBA delinquency)
• ***LPS: Mortgage Delinquency Data (Graphs LPS Delinquency)
• ***CoreLogic: Negative Equity Report (quarterly) (Graphs Negative Equity)
• ***AIA: Architecture Billings Index (Graph ABI)
• ***Reis: Office, Mall, Apartment Vacancy Rates (Quarterly) (Graphs REIS Vacancy Rate)
• ***NMHC Apartment Survey (Quarterly) (Graph NMHC Survey)

D-List
• Reuters / Univ. of Michigan Consumer Confidence Index (Graph Consumer Confidence)
• MBA: Mortgage Purchase Applications Index (Graph MBA Index)
• BLS: Job Openings and Labor Turnover Survey (Graph JOLTS)
• Census: Construction Spending (Graph Construction Spending)
• ¹Census: Housing Vacancy Survey (Quarterly) (Graphs Homeownerhip, Vacancy Rates)
• Fed: Senior Loan Officer Survey (Quarterly)
• AAR: Rail Traffic (Graph Transportation)
• ATA: Trucking (Graph Transportation)
• Ceridian-UCLA: Diesel Fuel Index (Graph Transportation)
• NFIB: Small Business Survey (Graphs NFIB Survey)
• Fed: Flow of Funds (Quarterly) (Graph Household Net Worth)
• STR: Hotel Occupancy (Graph Hotel Occupancy)
• CRE Prices: CoStar, Moody’s (Graphs)
• Manufacturers: Light Vehicle Sales (Graph Vehicle Sales)
• NRA: Restaurant Performance Index (Graph)
• Fed: Consumer Credit
• DOT: Vehicle Miles Driven (Graph Miles Driven)
• LA Port Traffic (Graph Port Traffic)
• BLS: Producer Price Index
• ADP Employment Report
• Conference Board Confidence Index
• NAR: Pending Home Sales
• Census: State Unemployment Rates, (graph)

¹: There are questions about the accuracy of the HVS.

Sources (Government):
BEA: Bureau of Economic Analysis
BLS: Bureau of Labor Statistics
Census: Census Bureau
DOL: Dept of Labor
DOT: Dept. of Transportation
Fed: Federal Reserve

Sources (Industry):
AAR: Association of American Railroads
AIA: American Institute of Architects
ISM: Institute for Supply Management
LPS: Lender Processing Services
MBA: Mortgage Bankers Association
NAHB: National Association of Homebuilders
NAR: National Association of Realtors
NFIB: National Federation of Independent Business
NRA: National Restaurant Association
STR: Smith Travel Research

by Calculated Risk on 8/03/2011 03:14:00 PM

Here is a depressing report from the National Employment Law Project: States Made Unprecedented Cuts to Unemployment Insurance in 2011

NELP’s new analysis shows that in 2011, six states cut the maximum number of weeks that jobless workers can receive unemployment insurance to less than 26 weeks—a threshold that had served as a standard for all 50 states for more than half a century, until this year. Michigan, Missouri, and South Carolina cut their available weeks down to 20; Arkansas and Illinois cut down to 25; and Florida cut to between 12 and 23 weeks, depending on the state’s unemployment rate. Double-digit unemployment in Michigan, South Carolina, and Florida did not discourage lawmakers there from making the cuts.

... Indiana changed the formula it uses to calculate weekly benefit amounts so that the average unemployment check will drop from $283 to $220 a week.

Ouch.

More from the report:

Throughout the recession, states with inadequate unemployment insurance trust fund reserves have relied on loans from the federal government to pay state unemployment insurance benefits. This September, states will begin paying interest on these loans, and starting in 2012, the federal government will raise taxes on employers in borrowing states until loans are paid in full, as required by the law.

by Calculated Risk on 8/03/2011 11:43:00 AM

Notes: Case-Shiller is the most followed house price index, but CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of April, May and June (June weighted the most) and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows Third Consecutive Month-Over-Month Increase

CoreLogic ... today released its June Home Price Index (HPI) which shows that home prices in the U.S. increased by 0.7 percent in June 2011 compared to May 2011, the third consecutive month-over-month increase. According to CoreLogic, national home prices, including distressed sales, declined by 6.8 percent in June 2011 compared to June 2010 after declining by 6.7 percent* in May 2011 compared to May 2010. Excluding distressed sales, year-over-year prices declined by 1.1 percent in June 2011 compared to June 2010 and by 2.1* percent in May 2011 compared to May 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“While there is a consistent and sustained seasonal improvement in prices over the last three months, prices are lower than a year ago due to the decline in prices after the expiration of the tax credit last year. The difference between the overall HPI and our index excluding distressed sales indicates that the price declines are more concentrated in the distressed sales market,” said Mark Fleming, chief economist for CoreLogic.

Click on graph for larger image in graph gallery.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was up 0.7% in June, and is down 6.8% over the last year, and off 31.7% from the peak.

Some of this increase is seasonal (the CoreLogic index is NSA) and the index is still off 6.8% from last June. This is also the eleventh consecutive month showing a year-over-year decline.

by Calculated Risk on 8/03/2011 10:00:00 AM

The July ISM Non-manufacturing index was at 52.7%, down from 53.3% in June. The employment index decreased in July to 52.5%, down from 54.1% in June. Note: Above 50 indicates expansion, below 50 contraction.

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

Economic activity in the non-manufacturing sector grew in July for the 20th consecutive month, say the nation's purchasing and supply executives in the latest 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 52.7 percent in July, 0.6 percentage point lower than the 53.3 percent registered in June, and indicating continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 2.7 percentage points to 56.1 percent, reflecting growth for the 24th consecutive month and at a faster rate than in June. The New Orders Index decreased by 1.9 percentage points to 51.7 percent. The Employment Index decreased 1.6 percentage points to 52.5 percent, indicating growth in employment for the 11th consecutive month, but at a slower rate than in June. The Prices Index decreased 4.3 percentage points to 56.6 percent, indicating that prices increased at a slower rate in July when compared to June. According to the NMI, 13 non-manufacturing industries reported growth in July. Respondents' comments remain mixed; however, for the most part they indicate that business conditions are flattening out."
emphasis added

Click on graph for larger image in graph gallery.

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

This was below the consensus forecast of 54.0%.

by Calculated Risk on 8/03/2011 08:15:00 AM

ADP reports:

Employment in the U.S. nonfarm private business sector rose 114,000 from June to July on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated advance in employment from May to June was revised down modestly to 145,000, from the initially reported 157,000.
...
Employment in the service-providing sector rose by 121,000 in July, marking 19 consecutive months of employment gains. Employment in the goods-producing sector fell by 7,000 in July, the second decline in three months. Manufacturing employment decreased 1,000 in July, which has seen growth in seven of the past nine months.

Note: ADP is private nonfarm employment only (no government jobs).

This was above the consensus forecast of an increase of 100,000 private sector jobs in July. The BLS reports on Friday, and the consensus is for an increase of 75,000 payroll jobs in July, on a seasonally adjusted (SA) basis.

The ADP report has not been very useful in predicting the BLS report.

Yesterday:
• Recession Measures (Graphs showing how little the economy has recovered).
• FHA sells record number of REO in June
• U.S. Light Vehicle Sales 12.23 million Annual Rate in July

by Calculated Risk on 8/03/2011 07:44:00 AM

The MBA reports: Mortgage Applications Increase, But Still Low in Latest MBA Weekly Survey

The Refinance Index increased 7.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier
...
"Mortgage rates fell, with the rate on 15-year mortgages reaching a new low in our survey. Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year's level. Factors such as negative equity and a weak job market continue to constrain borrowers. Purchase activity increased off of a low base, returning to levels of one month ago, but remains weak by historical standards." [said Michael Fratantoni, MBA's Vice President of Research and Economics].
...
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.45 percent from 4.57 percent, with points decreasing to 0.78 from 1.14 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The following graph shows the MBA Purchase Index and four week moving average since 1990.

Click on graph for larger image in graph gallery.

The four week average of the purchase index is at best moving sideways at about 1997 levels. Of course this doesn't include the large number of cash buyers ... but this suggests purchase activity remains fairly weak.

Mortgage rates fell last week - and will be even lower this week.

by Calculated Risk on 8/02/2011 07:36:00 PM

• Europe is a mess. Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. And for Spain to Germany. The Italian spread is at 3.713, and the Spanish spread is at 3.87. Both new highs ...

• As we've been discussing for several months ... from Nick Timiraos at the WSJ: Sliding Sales Listings Lift Housing Outlook

The number of homes listed for sale declined sharply in a number of U.S. cities during the second quarter, offering glimmers of hope that some housing markets are starting to recover.

Earlier:
• Recession Measures (Graphs showing how little the economy has recovered).

• FHA sells record number of REO in June

• U.S. Light Vehicle Sales 12.23 million Annual Rate in July

by Calculated Risk on 8/02/2011 03:47:00 PM

Based on an estimate from Autodata Corp, light vehicle sales were at a 12.23 million SAAR in July. That is up 6.1% from July 2010, and up 6.2% from the sales rate last month (June 2011).

Although still below the sales rate earlier this year - before the tragedy in Japan - this was above the consensus forecast of 11.9 million SAAR.

It appears most of the supply issues will be resolved over the next 30 to 60 days, and sales will probably be stronger in August.

Click on graph for larger image in graph gallery.

This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for July (red, light vehicle sales of 12.23 million SAAR from Autodata Corp).

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

Note: dashed line is current estimated sales rate.

Growth in auto sales should make a solid contribution to Q3 GDP as sales bounce back from Q2, however further sales growth will obviously depend on the overall economy and jobs and income growth.