by Calculated Risk on 3/31/2014 10:30:00 AM

From the Dallas Fed: Texas Manufacturing Strengthens Further

Texas factory activity increased for the eleventh month in a row in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 10.8 to 17.1, indicating output grew at a stronger pace than in February.

Other measures of current manufacturing activity also reflected more robust growth. The new orders index rose to a nine-month high of 14.7 ... Labor market indicators reflected stronger employment growth and longer workweeks. The March employment index rose markedly to a 21-month high of 15.
...
The general business activity index moved up to a six-month high of 4.9 after slipping to zero last month.

Expectations regarding future business conditions remained optimistic in March. The index of future general business activity edged up to 17.6, and the index of future company outlook rose 7 points to 27.4.

A solid report.

This is the last of the regional surveys.  Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (dashed green, through March), and five Fed surveys are averaged (blue, through March) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through February (right axis).

This suggests some  increase in the March ISM survey to be released tomorrow, Tuesday, April 1st.

by Calculated Risk on 3/31/2014 09:45:00 AM

From the Chicago ISM:

March 2014:

The Chicago Business Barometer decreased 3.9 points in March to 55.9, the lowest level since August, led by a decline in New Orders and a sharp fall in Employment. ...

Although New Orders remained firm above the 50 breakeven level, they eased for the second consecutive month pointing to a slight softening in demand. Like the Barometer, New Orders posted the lowest reading since August. Order Backlogs also decreased, to their lowest level since September.

Employment, the second biggest contributor to the Barometer’s decline, decreased sharply in March, erasing nearly all of February’s double digit rise.

Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, “March saw a significant weakening in activity following a five month spell of firm growth. It’s too early to tell, though, if this is the start of a sustained slowdown or just a blip.”

“Panellists, though, were optimistic about the future. Asked about the outlook for demand over the next three months, the majority of businesses said they expected tosee a pick-up.” he added.
emphasis added

This was below the consensus estimate of 58.5.

by Calculated Risk on 3/30/2014 09:05:00 PM

Monday:
• At 9:45 AM ET, Chicago Purchasing Managers Index for March. The consensus is for a decrease to 58.5, down from 59.8 in February.

• At 9:55 AM, Speech, Fed Chair Janet Yellen, Strengthening Communities, At the 2014 National Interagency Community Reinvestment Conference, Chicago, Ill.

• At 10:30 AM, Dallas Fed Manufacturing Survey for March. This is the last of the regional Fed manufacturing surveys for March.

Weekend:
• Schedule for Week of March 30th

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are up 8 and DOW futures are up 65 (fair value).

Oil prices are up with WTI futures at $101.46 per barrel and Brent at $107.95 per barrel.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.53 per gallon (up over the last two months, but still down from the same week 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 3/30/2014 11:28:00 AM

Here are some excepts from two research reports ... first, from Ethan Harris at Merrill Lynch:

We expect a solid jobs report in March with payroll growth of 230,000, reflecting a weather-induced snapback. We saw a modest recovery in job growth in February, with acceleration to 175,000 from 129,000 in January and 84,000 in December. The gain in February occurred despite still-harsh winter weather, implying pent-up activity. The survey week in February had poor conditions with snowstorms across the East coast. In contrast, the survey week in March was notably warmer, allowing for greater economic activity, particularly construction and manufacturing. ... Given the noise in the data, we advise smoothing through the recent swings and focus on a six month moving average, which is trending between 180-190K, revealing decent job growth. As the economy builds momentum, as we expect, we should see this trend move above 200K.

We look for the unemployment rate to hold steady at 6.7%. The household survey has been quite strong, with job growth averaging 445,000 over the prior four months. The series is typically mean-reverting, suggesting there is a risk of weakening in March. We also think the labor force participation rate will inch higher as confidence about labor market prospects continues to improve, assuggested by the conference board survey (the labor differential in March weakened slightly, but has been on an upward trend).

Also of interest will be average hourly earnings and the work week. Average hourly earnings surged 0.4% mom to bring the yoy rate up to 2.2%. We do not expect such strong gains to continue and look for a slowdown to 0.2% mom which still translates to a 2.3% yoy increase. The risk, however, is to the upside. We think the workweek will rebound to 34.3 after falling to 34.2 in February, which we believe was largely due to weather conditions given the spike in the percent of workers who said they couldn’t report to work due to harsh weather.

And from Nomura:

[W]e are forecasting a 190k increase in private payrolls with a 5k increase in government jobs, implying that total nonfarm payrolls will gain 195k. Furthermore, given the weaker labor market indicators within regional manufacturing surveys, we expect manufacturing employment to remain unchanged in March. Lastly, we expect the household survey to show that the unemployment rate fell 0.1pp to 6.6% in March.

Average weekly hours worked for private industries fell below trend in the past three months, most likely a result of the inclement weather which likely shortened the workweek at some businesses. However, given that the weather was better in March, we expect average weekly hours to rebound to 34.4 from 34.2 in February.

The consensus is for an increase of 206,000 non-farm payroll jobs in March, up from the 175,000 non-farm payroll jobs added in February.

The consensus is for the unemployment rate to decline to 6.6% in March.

 I'll write an employment report preview later this week after more data for March is released.

by Calculated Risk on 3/29/2014 04:03:00 PM

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

Here is the unofficial problem bank list for March 28, 2014.

Changes and comments from surferdude808:

The FDIC released its enforcement action activity through February 2014 today as anticipated. In that month, the FDIC was very busy terminating enforcement actions. For the week, there were 14 removals that leave the list at 538 institutions with assets of $174.3 billion. A year ago, the list held 791 institutions with assets of $290.0 billion. During March 2014, the list declined by 28 institutions and $8.0 billion in assets after 23 action terminations, four mergers, and one voluntary liquidation.

Removals included 12 action terminations against the following: Florida Bank, Tampa, FL ($536 million); Foundation Bank, Bellevue, WA ($364 million); First Bank of Dalton, Dalton, GA ($188 million); Proficio Bank, Cottonwood Heights, UT ($169 million); Regal Bank & Trust, Owings Mills, MD ($143 million); Bank of George, Las Vegas, NV ($112 million); RiverBank, Spokane, WA ($103 million); Security State Bank, Iron River, WI ($81 million); Bank of Bozeman, Bozeman, MT ($59 million); OmniBank, Bay Springs, MS ($47 million); Key Community Bank, Inver Grove Heights, MN ($42 million); and Cowboy State Bank, Ranchester, WY ($41 million). Hartford Savings Bank, Hartford, WI ($175 million) exited through a voluntary liquidation and Great Northern Bank, Saint Michael, MN ($71 million) through an unassisted merger.

We have updated the Unofficial Problem Bank List transition matrix through the first quarter of 2014. Full details are available in the accompanying table and a visual of the trends may be found in accompanying chart. Since the Unofficial Problem Bank List appeared in August 2009, 1,665 institutions have graced the list with only 32.3% or 538 remaining on the list. Removals total 1,127 with 555 coming through action termination. Another 375 have failed, 183 found a merger partner, and 14 exited through a voluntary liquidation. In the first quarter of 2014, action terminations accelerated to their fastest pace as 9.7 percent or 60 of the 595 institutions at the start of the quarter had their action terminated.

Unofficial Problem Bank List
Change Summary
		Number of Institutions	Assets ($Thousands)
Start (8/7/2009)		389	276,313,429
Subtractions
	Action Terminated	129	(43,313,416)
	Unassisted Merger	31	(6,663,407)
	Voluntary Liquidation	4	(10,584,114)
	Failures	153	(184,209,338)
	Asset Change		(11,291,149)
Still on List at 3/31/2014		72	20,252,005
Additions after 8/7/2009		466	154,056,606
End (3/31/2014)		538	174,308,611
Intraperiod Deletions1
	Action Terminated	426	187,850,337
	Unassisted Merger	152	70,216,490
	Voluntary Liquidation	10	2,324,142
	Failures	222	110,834,945
	Total	810	371,225,914
1Institution not on 8/7/2009 or 3/31/2014 list but appeared on a weekly list.