by Calculated Risk on 1/03/2013 04:00:00 PM

Based on an estimate from WardsAuto, light vehicle sales were at a 15.31 million SAAR in December. That is up 13% from December 2011, and down 1% from the sales rate last month.

This was above the consensus forecast of 15.1 million SAAR (seasonally adjusted annual rate). Note: Some of the increase in November was a bounce back from Hurricane Sandy that negatively impacted sales at the end of October, and sales might have been boosted slightly in December from some storm related bounce back.

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for December (red, light vehicle sales of 15.31 million SAAR from WardsAuto).

Click on graph for larger image.

Sales in 2012 were just over 14.4 million, up from 12.7 million rate for the same period of 2011. Last year sales were depressed for several months (May through August) due to supply chain issues related to the tsunami in Japan.


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

Note: dashed line is current estimated sales rate.

This shows the huge collapse in sales in the 2007 recession.

Sales were up over 13% in 2012, and auto sales have been a key contributor to the economy over the last three years.  Sales will probably increase in 2013, but not at a double digit rate.

by Calculated Risk on 1/03/2013 02:00:00 PM

It appears several members expect QE3 to end in 2013. Also, all but one member was in favor of economic thresholds for raising the Fed Funds rate.

From the Fed: Minutes of the Federal Open Market Committee, Meeting of December 11-12, 2012. Excerpt:

In their discussion of monetary policy for the period ahead, all members but one judged that continued provision of monetary accommodation was warranted in order to support further progress toward the Committee's goals of maximum employment and price stability. The Committee judged that such accommodation should be provided in part by continuing to purchase MBS at a pace of $40 billion per month and by purchasing longer-term Treasury securities, initially at a pace of $45 billion per month, following the completion of the maturity extension program at the end of the year. The Committee also maintained its existing policy of reinvesting principal payments from its holdings of agency debt and agency MBS into agency MBS and decided that, starting in January, it will resume rolling over maturing Treasury securities at auction. While almost all members thought that the asset purchase program begun in September had been effective and supportive of growth, they also generally saw that the benefits of ongoing purchases were uncertain and that the potential costs could rise as the size of the balance sheet increased. Various members stressed the importance of a continuing assessment of labor market developments and reviews of the program's efficacy and costs at upcoming FOMC meetings. In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases. Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.

With regard to its forward guidance about the federal funds rate, the Committee decided to indicate in the statement language that it expects the highly accommodative stance of monetary policy to remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In addition, all but one member agreed to replace the date-based guidance with economic thresholds indicating that the exceptionally low range for the federal funds rate would remain appropriate at least as long as the unemployment rate remains above 6½ percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee thought it would be helpful to indicate in the statement that it viewed the economic thresholds as consistent with its earlier, date-based guidance. The new language noted that the Committee would also consider other information when determining how long to maintain the highly accommodative stance of monetary policy, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. One member dissented from the policy decision, opposing the new economic threshold language in the forward guidance, as well as the additional asset purchases and continued intervention in the MBS market.
emphasis added

by Calculated Risk on 1/03/2013 12:07:00 PM

From Freddie Mac today: Mortgage Rates Start the New Year Near All-Time Record Lows

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates continuing to hover near their all-time record lows ...

30-year fixed-rate mortgage (FRM) averaged 3.34 percent with an average 0.7 point for the week ending January 3, 2013, down from last week when it averaged 3.35 percent. Last year at this time, the 30-year FRM averaged 3.91 percent.

15-year FRM this week averaged 2.64 percent with an average 0.7 point, down from last week when it averaged 2.65 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.

The Freddie Mac survey started in 1971 and mortgage rates are currently near the record low for the last 40 years.

Click on graph for larger image.

This graph shows the 15 and 30 year fixed rates from the Freddie Mac survey since the Primary Mortgage Market Survey® started in 1971 (15 year in 1991).

Note: Mortgage rates were at or below 5% back in the 1950s.

by Calculated Risk on 1/03/2013 10:05:00 AM

Press Release: Asking Prices Up 5.1 Percent Nationally Year-Over-Year, While Rents Rose 5.2 Percent

In December 2012, asking prices increased 5.1 percent nationally year-over-year (Y-o-Y), marking a huge turnaround from being down 4.3 percent in December 2011. Moreover, not only are prices rising, these gains have accelerated in the last year. Quarter-over-quarter price changes were 0.8% in Q1 (March 2012), 0.4% in Q2 (June 2012), 1.4% in Q3 (September 2012), and 2.3% in Q4 (December 2012), seasonally adjusted.

Asking home prices increased the most in Phoenix, which rose 26.0 percent Y-o-Y in December 2012; however, Las Vegas and Seattle experienced the year’s most dramatic price turnarounds. Both had price gains of more than 10 percent in 2012 after declines of more than 10 percent in 2011. Overall, 2012 marked a huge turnaround year for most local housing markets. In fact, prices rose in 82 of the 100 largest metros at the end of December, compared with just 12 out of 100 in 2011.

Nationally, rents rose 5.2 percent Y-o-Y. Throughout 2012, rent increases Y-o-Y remained around 5 percent, even though asking price increases accelerated and have almost caught up with rent gains at year’s end. Locally, rents rose most in Houston, Oakland and Miami. Rent increases surpassed price increases by a wide margin in Houston, Chicago, Philadelphia, and Baltimore. In contrast, prices grew much faster than rents in Phoenix, Las Vegas, Riverside-San Bernardino, and Sacramento. Overall, prices rose faster than rents in 17 of the 25 largest rental markets in 2012.

“The housing market enters 2013 with a running start,” said Jed Kolko, Trulia’s Chief Economist. “Price gains picked up steam in 2012, starting with modest increases early in the year and accelerating in the third and fourth quarter. In 2013, rising prices will encourage more new construction and will encourage some homeowners to sell, which will help alleviate the current inventory shortage.”

More from Jed Kolko, Trulia Chief Economist: Asking Home Prices Up 5.1% in 2012, Huge Turnaround After Falling 4.3% in 2011

These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases over the next few months on a SA basis.

by Calculated Risk on 1/03/2013 08:30:00 AM

The DOL reports:

In the week ending December 29, the advance figure for seasonally adjusted initial claims was 372,000, an increase of 10,000 from the previous week's revised figure of 362,000. The 4-week moving average was 360,000, an increase of 250 from the previous week's revised average of 359,750.

The previous week was revised up from 350,000.

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 360,000.


Weekly claims are very volatile during the holiday season, but the 4-week average finished 2012 near the low for the year.


Weekly claims were above the 363,000 consensus forecast.


And here is a long term graph of weekly claims:

Note: There are large seasonal factors in December and January, and that can make for fairly large swings for weekly claims.


All current Employment Graphs

by Calculated Risk on 1/03/2013 08:19:00 AM

From ADP:

Private sector employment increased by 215,000 jobs from November to December, according to the December ADP National Employment Report®, which is produced by Automatic Data Processing, Inc. (ADP®) ... in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. The November 2012 report, which reported job gains of 118,000, was revised upward by 30,000 to 148,000 jobs.

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market held firm in December despite the intensifying fiscal cliff negotiations in Washington. Businesses even became somewhat more aggressive in their hiring at year end. Most encouraging is the revival in construction jobs, although the December gain was likely lifted by rebuilding after Superstorm Sandy. The job market ended 2012 on a more solid footing.”

This was above the consensus forecast for 150,000 private sector jobs added in the ADP report. Note:  The BLS reports on Friday, and the consensus is for an increase of 157,000 payroll jobs in December, on a seasonally adjusted (SA) basis.

ADP hasn't been very useful in predicting the BLS report, but maybe the new method will work better. This is the 3rd month for the new method.

by Calculated Risk on 1/02/2013 08:49:00 PM

Thursday economic releases:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the mortgage purchase and refinance applications index.

• At 8:15 AM, The ADP Employment Report for December will be released. This report is for private payrolls only (no government). The consensus is for 150,000 payroll jobs added in December. This is the third report using the new methodology, and the report last month (118,000) was somewhat close to the BLS report for private employment (the BLS reported 147,000 private sector jobs added in November).

• At 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 363 thousand from 350 thousand last week.

• At 10:00 AM, the Trulia Price Rent Monitors for December. This is the index from Trulia that uses asking prices adjusted both for the mix of homes listed for sale and for seasonal factors.

• At 2:00 PM, the FOMC Minutes for Meeting of December 11-12, 2012. This will provide a little more details on the decision of the Fed to set thresholds for inflation and the unemployment rate.

• All day: Light vehicle sales for December. The consensus is for light vehicle sales to decrease to 15.1 million SAAR in December (Seasonally Adjusted Annual Rate) from 15.5 million in November.

by Calculated Risk on 1/02/2013 04:28:00 PM

Since most people are complaining about the fiscal agreement, I'll point out a few positives ... first, remember the "fiscal cliff" was about too much austerity too quickly. The "fiscal cliff" included expiring tax cuts (income, payroll), expiring spending (unemployment insurance, etc.) and the "sequester" (mostly defense spending cuts). The sequester has been delayed for two months, so we don't know the size of the cuts yet, but ...

1) There was an agreement, and earlier in January than I expected!

2) It appears the amount of austerity will not drag the economy into a new recession. I would argue for a different mix of policies, but reducing the amount of austerity was achieved - and this was a key goal for the fiscal agreement.

3) Although long term debt sustainability is still an issue, the deficit is declining right now - and will decline further in 2013. David Wessel at the WSJ wrote about the declining deficit a few weeks ago: Putting the Brakes on Cutting the Deficit

The deficit—the difference between government revenue and spending—is shrinking even before the year-end fiscal cliff or a last-minute compromise to avoid it. In the depths of the most recent recession, the fiscal year that ended Sept. 30, 2009, the deficit was 10.1% of gross domestic product, the value of all the goods and services produced. Since then, the deficit has declined to 9% of GDP in 2010, 8.7% in 2011 and 7.0% in fiscal 2012. Private analysts predict the deficit will be between 5.5% and 6.0% of GDP in fiscal 2013, depending on the outcome of the budget talks.

We still don't know the details of the sequester, but I expect the deficit to be close to 5.5% of GDP this year. Still high, but improving. Unfortunately there are some longer term issues, especially with health care, but in the short term the deficit is moving in the right direction - and will decline further as the economy improves.

4) We don't have to look at those dumb countdown timers for a couple of months.

by Calculated Risk on 1/02/2013 01:30:00 PM

From CoreLogic: CoreLogic® Reports Shadow Inventory Continues Decline in October 2012

CoreLogic ... reported today that the current residential shadow inventory as of October 2012 fell to 2.3 million units, representing a supply of seven months. The October inventory level represents a 12.3 percent drop from October 2011, when shadow inventory stood at 2.6 million units.

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure and held as real estate owned (REO) by mortgage servicers but not currently listed on multiple listing services (MLSs). Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed unlisted properties most likely to become REO properties. Properties that are not yet delinquent but may become delinquent in the future are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official reporting measurements of unsold inventory.
...
“Almost half of the properties in the shadow are delinquent and not yet foreclosed,” said Mark Fleming, chief economist for CoreLogic. “Given the long foreclosure timelines in many states, the current shadow inventory stock represents little immediate threat to a significant swing in housing market supply. Investor demand will help to absorb the already foreclosed and REO properties in the shadow inventory in 2013.”
...
Of the 2.3 million properties currently in the shadow inventory, 1.04 million units are seriously delinquent (3.3 months’ supply), 903,000 are in some stage of foreclosure (2.8 months’ supply) and 354,000 are already in REO (1.1 months’ supply).

Click on graph for larger image.

This graph from CoreLogic shows the breakdown of "shadow inventory" by category.

Note: The "shadow inventory" could be higher or lower using other numbers and methods; the key is that their estimate of the shadow inventory is declining.

by Calculated Risk on 1/02/2013 11:14:00 AM

In November 2012, private residential construction spending was the largest category for the first time since 2007 - but spending is still very low (at 1998 levels not adjusted for inflation). Note: Residential construction is usually the largest category for construction spending, but there was a huge collapse in spending following the housing bubble (as expected).

The Census Bureau reported that overall construction spending decreased in November:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2012 was estimated at a seasonally adjusted annual rate of $866.0 billion, 0.3 percent below the revised October estimate of $868.2 billion. The November figure is 7.7 percent above the November 2011 estimate of $804.0 billion.

Private residential construction spending increased, but both private non-residential and public construction spending declined:

Spending on private construction was at a seasonally adjusted annual rate of $589.8 billion, 0.2 percent below the revised October estimate of $590.8 billion. Residential construction was at a seasonally adjusted annual rate of $295.3 billion in November, 0.4 percent above the revised October estimate of $294.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $294.5 billion in November, 0.7 percent below the revised October estimate of $296.5 billion. ... In November, the estimated seasonally adjusted annual rate of public construction spending was $276.2 billion, 0.4 percent below the revised October estimate of $277.4 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 56% below the peak in early 2006, and up 33% from the post-bubble low. Non-residential spending is 29% below the peak in January 2008, and up about 30% from the recent low.

Public construction spending is now 15% below the peak in March 2009 and just above the post-bubble low.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 19%. Non-residential spending is up 8% year-over-year mostly due to energy spending (power and electric). Public spending is down 3% year-over-year.

All Housing Investment and Construction Graphs

by Calculated Risk on 1/02/2013 10:00:00 AM

The ISM manufacturing index indicated expansion in December. PMI was at 50.7% in December, up from 49.5% in November. The employment index was at 52.7%, up from 48.4%, and the new orders index was at 50.3%, unchanged from November.

From the Institute for Supply Management: November 2012 Manufacturing ISM Report On Business®

Economic activity in the manufacturing sector expanded in December, following one month of contraction, and the overall economy grew for the 43rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 50.7 percent, an increase of 1.2 percentage points from November's reading of 49.5 percent, indicating expansion in manufacturing for only the third time in the last seven months. This month's PMI™ reading moved manufacturing off its low point for 2012 in November. The New Orders Index remained at 50.3 percent, the same rate as in November, indicating growth in new orders for the fourth consecutive month. The Production Index registered 52.6 percent, a decrease of 1.1 percentage points, indicating growth in production for the third consecutive month. The Employment Index registered 52.7 percent, an increase of 4.3 percentage points, indicating a resumption of growth in employment following only one month of contraction since September 2009. Both the Exports and Imports Indexes registered 51.5 percent, returning both indexes to growth territory following consecutive periods of contraction of six and four months, respectively. Comments from the panel this month are mixed, with some indicating a strengthening of demand and others indicating a continuing softness in demand. Additionally, many respondents express uncertainty about government regulations, taxes and global economics in general as we approach 2013."

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was slightly above expectations of 50.5% and suggests manufacturing expanded in December.

by Calculated Risk on 1/02/2013 09:05:00 AM

Scheduling note: Both the FOMC minutes and the MBA Purchase index will be released on Thursday.

From MarkIt: PMI at seven-month high in December, signalling solid expansion of manufacturing sector

The final Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) was 54.0 in December, down slightly from the flash estimate of 54.2, and signalled a further expansion of the U.S. manufacturing sector. Moreover, up from 52.8 in November, the headline PMI indicated the strongest rate of growth since May.
...
One-in-five companies reported an increase in new orders, with the overall rate of growth the fastest since April. Moreover, new export orders increased for the second month running and at the strongest pace since March.
...
“Firms are also taking on more staff, suggesting that the underlying improvement in demand pushed any worries about the ‘fiscal cliff’ to backs of manufacturers’ minds in the closing weeks of the year. [said Chris Williamson, Chief Economist at Markit]

“With recent indications that growth is also picking up in other key economies around the world, notably in emerging markets such as China and Brazil, and that the Eurozone’s economic crisis is easing, U.S. companies should benefit as stronger demand lifts exports in early 2013. While economic growth may disappoint in the fourth quarter compared to the 3.1% rate of expansion seen in the third quarter, the recent run of positive PMI surveys towards the end of 2012 suggests that prospects have begun to look a little brighter for the new year.”

The ISM PMI will be released at 10 AM today.

by Calculated Risk on 1/01/2013 11:36:00 PM

From the WaPo: House passes ‘fiscal cliff’ bill

The vote was 257 to 167, with 85 Republicans joining with nearly all of the chamber’s Democrats. President Obama, whose vice president, Joe Biden, crafted the deal with Senate Minority Leader Mitch McConnell (R-Ky.), was preparing to address the nation.

After the bill passed, President Obama spoke briefly. Mr. Obama said this bill was "just one step", that he is "open to compromise" on the deficit, but that the default ceiling (aka debt ceiling) was off the table (taking a page from Ronald Reagan).

by Calculated Risk on 1/01/2013 06:51:00 PM

Update: The FOMC Minutes and auto sales will be released on Thursday.

Here is the live feed for the U.S. House of Representatives. That might vote on something tonight.

Back to work ...

Wednesday economic releases:
• At 9:00 AM ET, The Markit US PMI Manufacturing Index Flash. The consensus is for an increase to 54.2, up from 52.8.

• At 10:00 AM, the ISM Manufacturing Index for December will be released. The consensus is for PMI to increase to 50.5 from 49.5 in November. (above 50 is expansion). The regional surveys suggest expansion in December.

• Also at 10:00 AM, Construction Spending for November. The consensus is for a 0.6% increase in construction spending.

Here are the winners for the December economic question contest:
1st: Matei Ripeanu
2nd tie: Walt Tucker, OpenID User, Bill Dawers, Joey Cordero

Here are the 2012 Overall winners:
1st: Bill (CR)
2nd: Bryant Dodson
3rd: Billy Forney
4th: Bill Dawers
5th: Walt Tucker

Congratulations all!

by Calculated Risk on 1/01/2013 12:07:00 PM

Taxprof has posted the Senate version of the bill: H. R. 8

It appears that the Mortgage Debt Relief Act of 2007 will be extended for one year. Usually cancelled debt is considered income, but a provision of the Debt Relief Act allowed borrowers "to exclude certain cancelled debt on [a] principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief." (excerpt from IRS).

Here is the text from H.R.8:

SEC. 202. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.

(a) IN GENERAL.—Subparagraph (E) of section 108(a)(1) is amended by striking ‘‘January 1, 2013’’ and inserting ‘‘January 1, 2014’’.

(b) EFFECTIVE DATE.—The amendment made by this section shall apply to indebtedness discharged after December 31, 2012.

This is helpful for foreclosures, mortgage modifications, and for short sales (so the seller can sell the house for less than is owed, and not have to pay taxes on the debt forgiveness). This provision had wide bipartisan support and was expected to be included.

by Calculated Risk on 1/01/2013 10:53:00 AM

From CBS: Fiscal cliff deal heads to House after Senate vote

Legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies is headed to the GOP-dominated House after bipartisan, middle-of-the-night approval in the Senate capped a New Year's Eve drama unlike any other in the annals of Congress.

CBS News correspondent Nancy Cordes reports from Capitol Hill that the House vote could come as early as 1 p.m. Tuesday.

Of course they are always late.

For details on the bill, see: Wonkbook: Everything you need to know about the fiscal cliff deal

Assuming the bill passes the House (seems likely given the large majority voting for the bill in the Senate), the next question is the size of the drag on the economy. The largest drag will come from the payroll tax cut - also there will be more drag in a couple of months because the sequester was delayed (scheduled budget cuts).

From Sudeep Reddy at the WSJ: Deal's Likely Impact: More Slow Growth

The biggest hit to 2013 growth appears likely to come from the payroll-tax holiday's expiration on Monday.
...
The workers' share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year.
...
The rise in payroll taxes would amount to about $125 billion a year, or about 0.8% of the nation's overall output, according to J.P. Morgan Chase. According to many forecasters, that would slow the pace of U.S. economic growth by about half a percentage point next year, a sizable amount for an economy growing about 2% a year.

by Calculated Risk on 12/31/2012 10:00:00 PM

Thanks to everyone for a great year, and I wish everyone the best in 2013.

From the WSJ: U.S. Budget Compromise Deal Reached

President Barack Obama and congressional Republicans sealed a budget deal ... Top Democratic lawmakers said the Senate would vote on the deal Monday night. The House could reconvene, or wait until Tuesday to vote. Passage in the House isn't assured and could depend in part on the result in the Senate as well as the reaction to conservatives of the delay in spending cuts.

The vote will be after midnight so technically the politicians are voting for tax cuts, not increases.

Here is a link of a live video of the senate floor.

And this one is a little more fun - Times Square in NYC.

by Calculated Risk on 12/31/2012 05:46:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined in November to 3.30% from 3.35% October. The serious delinquency rate is down from 4.00% in November last year, and this is the lowest level since March 2009.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Freddie Mac reported that the Single-Family serious delinquency rate declined in November to 3.25% from 3.31%, in October. Freddie's rate is down from 3.57% in November 2011, and this is the lowest level since August 2009. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

Note: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

In 2009, Fannie's serious delinquency rate increased faster than Freddie's rate. Since then, Fannie's rate has been falling faster - and now the rates are at about the same level.

Although this indicates ongoing progress, the "normal" serious delinquency rate is under 1%.  At this pace, it will take several years until the rates are back to normal.

by Calculated Risk on 12/31/2012 03:51:00 PM

From the National Restaurant Association: Restaurant Performance Index Improved in November but Remained Below 100 for Second Consecutive Month

The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in November, up 0.5 percent from October. However, November marked the second consecutive month in which the RPI stood below 100, which signifies contraction in the index of key industry indicators.

“The November gain in the RPI was driven by improving same-store sales and customer traffic levels, both of which registered their strongest performance in three months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “However, restaurant operators remain concerned about the direction of the overall economy, due in large part to the uncertainty around the fiscal cliff.”
...
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.8 in November – up 0.6 percent from a level of 99.3 in October. Although restaurant operators reported net positive sales and traffic results in November, softness in the labor and capital spending indicators outweighed the performance, which resulted in a Current Situation Index reading below 100 for the fourth time in the last five months.

Click on graph for larger image.

The index increased to 99.9 in November, up from 99.5 in October (below 100 indicates contraction).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.

Note: It appears that the "uncertainty around the fiscal cliff" will be resolved (My initial guess is austerity will subtract around 1.5% to 2.0% from GDP in 2013 - with the largest drag coming from the increase in the payroll tax - but we still need the details).

by Calculated Risk on 12/31/2012 12:54:00 PM

From Ezra Klein:
1. Details on the deal: 39.6% tax rate for individual income over 400k/family income over $450k. AMT patched permanently.

2. Dividends and cap gains taxes at 20% of the $400k/$450k levels. PEP at $250k. Pease at $300k.

3. UI and business cuts extended through 2013. Stimulus cuts for 5 years. Medicare cuts stopped with offsets. Payroll cut expires.

4. Sequester unclear. Prez wants to offset with taxes and spending cuts. R's only want to offset with spending cuts.

Updates:
5. Estate tax set at $10m exemption but 40% rate.

6. Deal raises about $600b -- and maybe a bit more -- in taxes over 10 years. As always details can change, but that's where it is now.

From Reuters:

• Obama to speak on fiscal cliff at 1:30pm ET event: White House
• Source: Emerging "cliff" deal would raise tax on income above $400k/yr
• Source: Emerging deal would include permanent alternative minimum tax fix
• Source: Emerging deal would extend unemployment benefits for a year
• Sr. Republican aide: Tentative "cliff" deal contains no new spending cuts
• Sr. Republican aide: Majority of Sen. GOP expected to support tentative deal
• Cornyn via Twitter: GOP to meet at 2pm ET on fiscal cliff negotiations