by Calculated Risk on 11/18/2010 10:00:00 AM

Here is the Philadelphia Fed Index: Business Outlook Survey

Results from the Business Outlook Survey suggest that regional manufacturing activity showed improvement in November. All of the survey's broad indicators of economic performance showed improvement from their reading in October, and firms reported an increase in employment and work hours.
...
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 1.0 in October to 22.5 in November. This is the highest reading in the index since last December. Indexes for new orders and shipments also improved this month, and each index increased 15 points.
...
Labor market conditions also showed some improvement this month, paralleling the improvement in other broad indicators. This month, firms also reported some growth in employment and a longer workweek.
emphasis added

This is well above the consensus expectations of a reading of 5.6 - and shows the opposite of the NY Fed manufacturing survey.

by Calculated Risk on 11/18/2010 08:39:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending Nov. 13, the advance figure for seasonally adjusted initial claims was 439,000, an increase of 2,000 from the previous week's revised figure of 437,000. The 4-week moving average was 443,000, a decrease of 4,000 from the previous week's revised average of 447,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since January 2000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week by 4,000 to 443,000.

This is the lowest level for the 4-week moving average since September 2008 - a clear improvement over recent months, but still elevated - and still a sign of weakness in the job market.

by Calculated Risk on 11/17/2010 09:11:00 PM

From Fed Governor Elizabeth Duke: Foreclosure documentation issues. She didn't provide any specifics although she noted that the report will be published early next year. She also mentioned some foreclosure data:

The Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve are conducting an in-depth review of practices at the largest mortgage servicing operations. ... The regulators expect the initial on-site portion of our work to be completed this year and currently plan to publish a summary overview of industry-wide practices in early 2011.

Duke discusses some of the potential risks from foreclosure issues, and she noted the Fed expects the number of foreclosures will stay elevated for several years:

The number of foreclosures initiated on residential properties has soared from about 1 million in 2006, the year that house prices peaked, to 2.8 million last year. Over the first half of this year, we have seen a further 1.2 million foreclosure filings, and an additional 2.4 million homes were somewhere in the foreclosure pipeline at the end of June. All told, we expect about 2.25 million foreclosure filings this year and again next year, and about 2 million more in 2012. While our outlook is for filings to decline in coming years, they will remain extremely high by historical standards. Currently, almost 5 million mortgage loans are 90 days or more past due or in foreclosure.

Note: We will have some updated delinquency data tomorrow. For Q2, the Mortgage Bankers Association (MBA) reported that 9.11% of first-liens were 90 or more days delinquent or in the foreclosure process. That was about 4.8 million loans.

Tomorrow morning the MBA will release the Q3 National Delinquency Survey at 10 AM ET - and I'll be on the conference call at 10:30 AM.

by Calculated Risk on 11/17/2010 04:50:00 PM

A few details from the Financial Times: Dublin feels pressure on rescue package

Irish bank customers have withdrawn an estimated 11% of deposits over just a few weeks.

The Irish banks are now relying heavily on the ECB for liquidity.

The "rescue team" (IMF, European Central Bank, and European Commission officials) arrive on Thursday.

LCH.Clearnet (large clearing house) today doubled the margin requirements for Irish sovereign debt.

Also from the WSJ: Ireland Braces for Bank Exam

by Calculated Risk on 11/17/2010 02:34:00 PM

In addition to the CPI release this morning from the BLS, the Cleveland Fed released the median CPI and the trimmed-mean CPI:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.1% annualized rate) in October. The 16% trimmed-mean Consumer Price Index was virtually unchanged at 0.0% (0.6% annualized rate) during the month.
...
Over the last 12 months, the median CPI rose 0.5%, the trimmed-mean CPI rose 0.8%, the CPI rose 1.2%, and the CPI less food and energy rose 0.6%

So these three measures: core CPI, median CPI and trimmed-mean CPI, all increased less than 1% over the last 12 months. The indexes for rent and owners' equivalent rent both increased in October (some analysts blamed the disinflation trend on these measures of rent, but that wasn't true in October).

For the core CPI, the BLS noted:

Over the last 12 months, the index for all items less food and energy has risen 0.6 percent, the smallest 12-month increase in the history of the index, which dates to 1957

Click on graph for larger image in new window.

This graph shows these three measure of inflation on a year-over-year basis.

They all show that inflation has been falling, and that measured inflation is up less than 1% year-over-year.

Note: The Cleveland Fed has a discussion of a number of measures of inflation: Measuring Inflation

As far as disinflation, the U.S. is still tracking Japan in the '90s ...

by Calculated Risk on 11/17/2010 11:41:00 AM

Notes: CoreLogic reports the year-over-year change. The headline for this post is for the change from August 2010 to September 2010. The CoreLogic HPI is a three month weighted average of July, August, and September and is not seasonally adjusted (NSA).

From CoreLogic: September Home Prices Declined 2.79 Percent Year Over Year

CoreLogic ... today released today released its September Home Price Index (HPI) that shows that home prices in the U.S. declined for the second month in a row after rising slightly for the first seven months of the year. According to the CoreLogic HPI, national home prices, including distressed sales, declined 2.79 percent in September 2010 compared to September 2009 and declined by 1.08 percent [revised] in August 2010 compared to August 2009. Excluding distressed sales, year-over-year prices declined .73 percent in September 2010.. ...

“We’re continuing to see price declines across the board with all but seven states seeing a decrease in home prices,” said Mark Fleming, chief economist for CoreLogic. “This continued and widespread decline will put further pressure on negative equity and stall the housing recovery.”

Click on graph for larger image in new window.

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

The index is down 2.8% over the last year, and off 29.2% from the peak.

The index is 3.9% above the low set in March 2009, and I expect to see a new post-bubble low for this index later this year or early in 2011. As Fleming noted, prices are falling in most areas now.