by Calculated Risk on 3/08/2012 08:30:00 AM

The DOL reports:

In the week ending March 3, the advance figure for seasonally adjusted initial claims was 362,000, an increase of 8,000 from the previous week's revised figure of 354,000. The 4-week moving average was 355,000, an increase of 250 from the previous week's revised average of 354,750.

The previous week was revised up to 354,000 from 351,000.

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 increased slightly this week to 355,000.

The 4-week moving average is near the lowest level since early 2008.

And here is a long term graph of weekly claims:



All current Employment Graphs

by Calculated Risk on 3/07/2012 09:42:00 PM

"Another key day" seems like a broken record, but tomorrow is the deadline for the €206bn private sector Greek bond swap.

Also the ECB meets tomorrow, and ECB President Mario Draghi will hold a press conference.

From the WSJ: Greece Moves Closer to Swap

The €107 billion so far in pledges, coming ahead of the Thursday deadline, suggest that Greece is well on its way to getting enough creditors to consent to make the deal binding for any that refuse to take part.
...
The holdouts aren't likely to affect the broad acceptance of the deal, but they could be a thorn in the side of Greece and its euro-zone rescuers for years to come.

From the Financial Times: Greece inches closer to €206bn debt deal

From the Athens News: Venizelos confident that bond swap will work

Finance Minister Evangelos Venizelos said on Wednesday that he is optimistic that Greece will get the necessary backing from its private creditors for a voluntary bond swap and that the Greek debt will fall to 120 percent of GDP "or even better" by 2020.

Good luck with the 120 percent by 2020, but it does sound like the swap will go ahead.

by Calculated Risk on 3/07/2012 04:59:00 PM

A short note from economist Tom Lawler:

In CoreLogic’s “Negative Equity Report” for December 2011, the company estimated that properties backing a conventional mortgage that were in a negative equity position had an average mortgage balance of $269,000 and were “underwater” on average by $70,000. For properties backing FHA-insured mortgages that were in a negative equity position, the average mortgage balance was $169,000 and the average negative equity amount was $26,000.

What the press release didn’t say, however, is what percent of properties backing FHA-insured mortgages in its database were in a negative equity position (it gave the number, but its database does not include all mortgages). CL was nice enough to give me that figure – according to CL, 31% of the properties in its database backing FHA-insured mortgages were in a negative equity position in December. That compares to 21.8% for properties backing non-FHA mortgages.

CR Note: I'm not surprised that a larger percentage of FHA loans are in negative equity since the FHA has insured a large number of loans in recent years with small downpayments, while prices - according to CoreLogic - have continued to fall (as an example, prices are down about 10% since mid-2010 through the January report released this morning - so most FHA loans made in 2010 are probably in negative equity).

What is a little surprising is the percent of negative equity for those FHA loans. Even though the percent negative equity is much smaller than for non-FHA loans, the percent is still fairly high considering most of the FHA loans were made in the last few years.

by Calculated Risk on 3/07/2012 02:10:00 PM

From Duke University and CFO Magazine: CFOs: Outlook Improves, U.S. Employment Growth to Accelerate

The employment outlook has brightened, with U.S. finance executives expecting to increase their number of domestic full-time employees by 2.1 percent.

“The expected increase in employment is a welcome improvement over last quarter’s 1.5 percent forecast growth rate,” said Kate O’Sullivan, director of content development at CFO Magazine. “It indicates that national unemployment should fall below 8 percent in 2012.”

More than two-thirds of U.S. CFOs say their companies are currently trying to fill vacant positions.
...
The U.S. CFO Optimism Index, in which CFOs rate their confidence in the economy on a scale of 0 to 100, increased from 53 last quarter to 59 this quarter, equaling the index’s long-term average.

“This rebound is encouraging because increases in CFO optimism have historically preceded improvements in the overall economy,”said John Graham, a professor of finance at Duke’s Fuqua School of Business and director of the survey. “Optimism also rebounded in Europe and Asia, suggesting that 2012 should be a better year than 2011.Still, European optimism lags behind the rest of the world.”

CFOs cite weak consumer demand, intense pressure on profit margins, and the difficulty in attracting and retaining qualified employees among the top concerns for their companies.

In March 2011, CFOs in this survey only expected to increase full time employees by 1.2% over the next 12 months, so 2.1% is a solid increase.

Looking back at past results, CFOs expected to increase full time employment by 0.5% in March 2008 (the recession began in December 2007), and they had turned very pessimistic by December 2008 when they expected employment to fall by 5.0% over the next 12 months.

Note: CFOs of public companies expect earnings to grow at a slower pace this year (7.5%). Last year CFOs expected earnings growth of 18%.

by Calculated Risk on 3/07/2012 11:23:00 AM

Notes: The timing of different house prices indexes can be a little confusing. LPS uses December closings - other indexes usually report sales recorded in a month, and there is frequently a lag between closings and recording - so this is closer to what other indexes report for January (without the weighting of several months).

From LPS: LPS HPI Shows U.S. Home Prices Accelerated Decline to 1.0 Percent in Dec.; Early Data Suggests 1.2 Percent Drop in Jan. Likely

The LPS HPI national average home price for transactions during December 2011 reached a price level not seen since September 2002. This is the sixth consecutive month of price decreases.
...
Price changes were largely consistent across the country during December, increasing in only 8.0 percent of the ZIP codes in the LPS HPI. Price changes were also consistent across price tiers with a uniform decline of 1.0 percent.

... Of the 411 MSAs the LPS HPI covers, average prices declined for all of the MSAs (374) in 44 states. In addition, while average prices did not decline for all MSAs in the remaining states, prices fell in a total of 402 MSAs out of the LPS HPI 411.

This is a 3.9% year-over-year change for this index, and LPS expects that the year-over-year change in January will be smaller (around 3.6%)

Click on graph for larger image.

This graph from LPS shows the HPI since January 1995.

The index was down 1.0% in December, and is down 3.9% over the last year.

The index is off 31% from the peak - and is now at a new post-bubble low.