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Thursday, October 24, 2013

BLS: Job Openings "little changed" in August

by Calculated Risk on 10/24/2013 11:15:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 3.9 million job openings on the last business day of August, little changed from July, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) and separations rate (3.2 percent) also were little changed in August. ...
...
Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. ... The quits rate (not seasonally adjusted) rose over the 12 months ending in August for total nonfarm and total private but was unchanged for government.
The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for August, the most recent employment report was for September.

Job Openings and Labor Turnover Survey Click on graph for larger image.

Notice that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in August to 3.883 million from 3.808 million in July (revised up from 3.689 million).  The number of job openings (yellow) is up 6.9% year-over-year compared to August 2012. 

Quits were up in August, and quits are up about 10.5% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Not much changes month-to-month in this report - and the data is noisy month-to-month, but the general trend suggests a gradually improving labor market.

Trade Deficit in August at $38.8 Billion

by Calculated Risk on 10/24/2013 08:55:00 AM

The Department of Commerce reported this morning:

[T]otal August exports of $189.2 billion and imports of $228.0 billion resulted in a goods and services deficit of $38.8 billion, up from $38.6 billion in July, revised. August exports were $0.1 billion less than July exports of $189.3 billion. August imports were virtually unchanged at $228.0 billion.
The trade deficit was below the consensus forecast of $40.0 billion.

The first graph shows the monthly U.S. exports and imports in dollars through August 2013.

U.S. Trade Exports Imports Click on graph for larger image.

Imports and export were mostly unchanged in August.  

Exports are 14% above the pre-recession peak and up 4% compared to August 2012; imports are 1% below the pre-recession peak, and up about 1% compared to August 2012 (mostly moving sideways).

The second graph shows the U.S. trade deficit, with and without petroleum, through August.

U.S. Trade Deficit 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.

Oil averaged $100.26 in August, up from $97.07 in July, and up from $94.48 in August 2012.  The petroleum deficit has been declining and is the major reason the overall deficit has declined since early 2012.

The trade deficit with China increased to $29.9 billion in August, up from $28.7 billion in August 2012.  The trade deficit is mostly due to oil and China. 

Weekly Initial Unemployment Claims decline to 350,000

by Calculated Risk on 10/24/2013 08:30:00 AM

The DOL reports:

In the week ending October 19, the advance figure for seasonally adjusted initial claims was 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000. The 4-week moving average was 348,250, an increase of 10,750 from the previous week's revised average of 337,500.
The previous week was revised up from 358,000.

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 to 348,250 - the highest level since July.

Some of this recent increase in the four-week average was related to the government shutdown and some related to processing issues in California.

Wednesday, October 23, 2013

Thursday: Unemployment Claims, Job Openings

by Calculated Risk on 10/23/2013 10:03:00 PM

From Neil Irwin at the WaPo: Another billionaire is predicting doom. Ignore him.

Hedge fund billionaire Stanley Druckenmiller is really, really worried about the future of the United States. He is doing an event at Georgetown next week making the case that entitlement spending will form the next mega-financial crisis, and not for the first time.

This kind of quasi-apocalyptic talk is breathtakingly common. His is of a thread with a lot of commentary that suggests that the whole world economy is just a shell game being propped up by profligate government spending and central bank money-printing, that it’s all a scam that will implode soon enough.
...
[T]here are Druckenmiller’s arguments on Social Security obligations as the trigger of the next global financial crisis. The poster advertising Druckenmiller's speech last week argues that the "true national debt" is more than $200 trillion. What the sponsor seems to be doing is looking at the liabilities side of the balance sheet, but not the asset side. Yes, Social Security and Medicare are on the hook to pay out a lot of money in the future. But they are also on track to collect many trillions in tax revenue in the future.
I've read Druckenmiller's comments and Irwin is far too kind.

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 335 thousand from 358 thousand last week.

• At 9:30 AM, the Markit US PMI Manufacturing Index Flash for October. The consensus is for a decrease to 52.7 from 52.8 in September.

• At 10:00 AM, Job Openings and Labor Turnover Survey for August from the BLS.

• At 11:00 AM, the Kansas City Fed Survey of Manufacturing Activity for August. The consensus is for a reading of 9 for this survey, up from 8 in August (Above zero is expansion).

Note: New Home sales for September - originally scheduled for tomorrow - will be released on December 4th

LA area Port Traffic in September

by Calculated Risk on 10/23/2013 03:45:00 PM

Container traffic gives us an idea about the volume of goods being exported and imported - and possibly some hints about the trade report for September since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

LA Area Port TrafficClick on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 0.4% in September compared to the rolling 12 months ending in August.   Outbound traffic decreased slightly compared to August.

In general, inbound traffic has been increasing  and outbound traffic had been declining slightly.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

LA Area Port TrafficUsually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).

This suggests an increase in the trade deficit with Asia for September - and possibly a fairly strong retailer buying for the holiday season. 

AIA: Architecture Billings Index Increases in September

by Calculated Risk on 10/23/2013 11:36:00 AM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From AIA: Architecture Billings Index Surges Higher

Showing a steady increase in the demand for design services, the Architecture Billings Index (ABI) continues to accelerate, as it reached its second highest level of the year. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the September ABI score was 54.3, up from a mark of 53.8 in August. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6, down from the reading of 63.0 the previous month.

• Regional averages: West (60.6), South (54.1), Midwest (51.0), Northeast (50.7)

• Sector index breakdown: commercial / industrial (57.9), multi-family residential (55.6), mixed practice (55.4), institutional (50.4)

• Project inquiries index: 58.6
emphasis added
AIA Architecture Billing Index Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 54.3 in September, up from 53.8 in August. Anything above 50 indicates expansion in demand for architects' services.  This index has indicated expansion in 12 of the last 13 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction.  This index is not as strong as during the '90s - or during the bubble years of 2004 through 2006 - but the increases in this index over the past year suggest some increase in CRE investment in 2014.

LPS: Mortgage Delinquency Rate increased in September, In-Foreclosure Rate lowest since February 2009

by Calculated Risk on 10/23/2013 09:14:00 AM

According to the First Look report for September to be released today by Lender Processing Services (LPS), the percent of loans delinquent increased seasonally in September compared to August, and declined about 13% year-over-year. Also the percent of loans in the foreclosure process declined further in September and were down 32% over the last year.

LPS reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) increased to 6.46% from 6.20% in August. The normal rate for delinquencies is around 4.5% to 5%.

The percent of loans in the foreclosure process declined to 2.63% in September from 2.66% in August.   The is the lowest level since February 2009.

The number of delinquent properties, but not in foreclosure, is down 434,000 properties year-over-year, and the number of properties in the foreclosure process is down 612,000 properties year-over-year.

LPS will release the complete mortgage monitor for September in early November.

LPS: Percent Loans Delinquent and in Foreclosure Process
September 2013August 2013September 2012
Delinquent6.46%6.20%7.40%
In Foreclosure2.63%2.66%3.87%
Number of properties:
Number of properties that are 30 or more, and less than 90 days past due, but not in foreclosure:1,935,0001,836,0002,170,000
Number of properties that are 90 or more days delinquent, but not in foreclosure:1,331,0001,288,0001,530,000
Number of properties in foreclosure pre-sale inventory:1,328,0001,341,0001,940,000
Total Properties4,593,0004,465,0005,640,000

MBA: Mortgage Applications Unchanged in Latest Survey

by Calculated Risk on 10/23/2013 07:02:00 AM

From the MBA: Mortgage Applications Essentially Unchanged in Latest MBA Weekly Survey

Mortgage applications decreased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 18, 2013. This week’s results do not include an adjustment for the Columbus Day holiday. ...

The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. ...
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.39 percent, the lowest rate since June 2013, from 4.46 percent, with points increasing to 0.41 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Purchase Index Click on graph for larger image.


The first graph shows the refinance index.

The refinance index is up over the last six weeks as rates have declined from the August levels.

However the index is still down 61% from the levels in early May.


Mortgage Refinance Index The second graph shows the MBA mortgage purchase index.  

The 4-week average of the purchase index has fallen since early May, and the 4-week average of the purchase index is now down 4% from a year ago.

Tuesday, October 22, 2013

Wednesday: FHFA House Price Index, Architecture Billings Index

by Calculated Risk on 10/22/2013 07:44:00 PM

From Catherine Rampell at the NY Times: Weak Job Data May Weigh on Fed’s Decision on Stimulus

Weakness in the September hiring figures — coupled with the complications about the upcoming releases — is expected to further delay the Federal Reserve’s decision to start tapering its stimulus programs.

“The labor market lost, rather than gained, momentum over the summer, leaving us with less than a desirable cushion just as the government was shuttered in response to political shenanigans,” said Diane Swonk, chief economist at Mesirow Financial.

While the Fed has been trying to stimulate the economy, fiscal policy has largely worked in the opposite direction, with multiple drags on growth resulting from a payroll tax hike that began in January, the across-the-board budget cuts of the so-called sequestration that began in March, and then the partial government shutdown and debt ceiling crisis in October. Even before the shutdown, the federal government had the lowest number of civilian employees on its payrolls since 1966, according to the September jobs report.
It will be a few months until the data is back to normal.

Wednesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 9:00 AM, the FHFA House Price Index for August 2013. This was original a GSE only repeat sales, however there is also an expanded index that deserves more attention. The consensus is for a 0.8% increase.

• During the day: The AIA's Architecture Billings Index for September (a leading indicator for commercial real estate).

Weekly Update: Housing Tracker Existing Home Inventory up year-over-year on Oct 21st

by Calculated Risk on 10/22/2013 05:47:00 PM

I didn't post this yesterday because of the NAR existing home sales release. Here is another weekly update on housing inventory...

There is a clear seasonal pattern for inventory, with the low point for inventory in late December or early January, and then peaking in mid-to-late summer.

The Realtor (NAR) data is monthly and released with a lag (the most recent data was for September).  However Ben at Housing Tracker (Department of Numbers) has provided me some weekly inventory data for the last several years.

Existing Home Sales Weekly data Click on graph for larger image.

This graph shows the Housing Tracker reported weekly inventory for the 54 metro areas for 2010, 2011, 2012 and 2013.

In 2011 and 2012, inventory only increased slightly early in the year and then declined significantly through the end of each year.

Inventory in 2013 is increasing, and is now slightly above the same week in 2012 (red is 2013, blue is 2012).

We can be pretty confidence that inventory bottomed early this year, and I expect the seasonal decline to be less than usual at the end of the year - so the year-over-year change will continue to increase. 

Inventory is still very low, but this increase in inventory should slow house price increases.