by Calculated Risk on 12/01/2010 03:56:00 PM

Based on an estimate from Autodata Corp, light vehicle sales were at a 12.26 million SAAR in November. That is up 13.2% from November 2009, and up slightly from the October 2010 sales rate.

Click on graph for larger image in new window.

This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for November (red, light vehicle sales of 12.26 million SAAR from Autodata Corp).

This is the highest sales rate since September 2008, excluding Cash-for-clunkers in August 2009.

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

Note: dashed line is current estimated sales rate. The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

This was above most forecasts of around 12.0 million SAAR.

by Calculated Risk on 12/01/2010 02:05:00 PM

• Fed's Beige Book showed the "economy continued to improve":

Reports from the twelve Federal Reserve Districts indicate that the economy continued to improve, on balance, during the reporting period from early/mid-October to mid-November.
...
Manufacturing activity continued to expand in almost all Districts, with relatively strong growth seen in metal fabrication and the automotive industries.
...
Housing markets remain depressed, with several Districts reporting further weakening during the past six weeks.

• In a research note today, "A Brighter US Economic Outlook", Goldman Sachs upped their 2011 real GDP forecast (this is the first time their outlook is above consensus in five years):

We have raised our sights for 2011, calling for real GDP growth to average 2.7% for the year versus 2.0% previously. We expect growth to pick up further in 2012—to 3.6% on average for the year—though judgments that far out are clearly tentative. ... Although our revised outlook implies a meaningful drop in the jobless rate, it will remain high by historical standards, ending 2012 at about 8½%.

On the conference call, Goldman highlighted several downside risks: Spillover from Europe, falling housing prices and possible premature fiscal tightening.

Note: I took the "over" during the weekend: The recent improvement in economic news . This forecast is still for sluggish growth and the unemployment rate is unacceptably high.

• Barry Eichengreen writes a scathing review of the Irish "rescue". Reprinted at the Irish Economy blog: Ireland’s Reparations Burden

The Irish “program” solves exactly nothing – it simply kicks the can down the road. ... This is not politically sustainable, as anyone who remembers Germany’s own experience with World War I reparations should know. A populist backlash is inevitable.

• The Federal Reserve released details of borrowing by financial firms, and others during the financial crisis.

by Calculated Risk on 12/01/2010 12:31:00 PM

Note: The real key is the seasonally adjusted annual sales rate (SAAR) compared to the last few months, not the year-over-year comparison provided by the automakers.

From MarketWatch: GM posts 11% jump in Nov. U.S. car sales

From MarketWatch: Ford Nov. U.S. sales jump 24%

From MarketWatch: Chrysler U.S. November sales rise 17%

Once all the reports are released, I'll post a graph of the estimated total November light vehicle sales (SAAR) - usually around 4 PM ET. Most estimates are for a decrease to 12.0 million SAAR in November from the 12.21 million SAAR in October.

by Calculated Risk on 12/01/2010 11:00:00 AM

The Census Bureau reported overall construction spending increased in October compared to September.

[C]onstruction spending during October 2010 was estimated at a seasonally adjusted annual rate of $802.3 billion, 0.7 percent (±1.4%)* above the revised September estimate of $797.1 billion.

Private construction spending also increased in October:

Spending on private construction was at a seasonally adjusted annual rate of $481.8 billion, 0.8 percent (±1.1%)* above the revised September estimate of $477.8 billion.

Click on graph for larger image in new window.

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

Private residential spending increased in October; private non-residential construction spending is still declining. Residential spending is 66% below the peak early 2006, and non-residential spending is 39% below the peak in January 2008.

Residential investment (RI) will probably be a minimal drag on Q4 GDP growth (or even make a slight positive contribution), and even though the recovery in RI will be sluggish, I expect RI will make a positive contribution to GDP growth in 2011. Non-residential investment will probably bottom sometime next year, but stay depressed for some time.

by Calculated Risk on 12/01/2010 10:00:00 AM

PMI at 56.6% in November, down slightly from 56.9% in October. The consensus was for a decrease to 56.5%.

From the Institute for Supply Management: November 2010 Manufacturing ISM Report On Business®

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector grew during November, with both new orders and production continuing to expand. With the PMI at 56.6 percent, November's rate of growth is the second fastest in the last six months. Exports and imports continue to support expansion in the sector. Prices moderated slightly during the month, but comments from the respondents express concerns with regard to pricing pressures. The list of commodities in short supply increased, though short supply items are not yet posing significant problems. Manufacturing continues to benefit from the recovery in autos, but those industries reliant upon housing continue to struggle."

Click on graph for larger image in new window.

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

In addition to the PMI, the ISM's new orders index was down to 56.6 from 58.9 in October.

The employment index decreased to 57.5 from 57.7 in October.

This was in line with the regional Fed manufacturing surveys.

by Calculated Risk on 12/01/2010 08:15:00 AM

ADP reports:

Private-sector employment increased by 93,000 from October to November on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from September to October was revised up from the previously reported increase of 43,000 to an increase of 82,000.

This month’s ADP National Employment Report shows an acceleration of employment and suggests the nation’s employment situation is brightening somewhat. November’s gain in private-sector employment is the largest in three years. This is the tenth consecutive month of gains, which have averaged 47,000 during that period. Nevertheless, employment gains of this magnitude are not sufficient to lower the unemployment rate, which likely will remain above 9% for all of 2011.

Note: ADP is private nonfarm employment only (no government jobs).

The consensus was for ADP to show an increase of about 68,000 private sector jobs in November, so this was above consensus.

The BLS reports on Friday, and the consensus is for an increase of 145,000 payroll jobs in November, on a seasonally adjusted (SA) basis and for the unemployment rate to stay steady at 9.6%.