graphs for November 29

3rd quarter GDP revision:

3rd qtr 2014 2nd estimte GDP

October income & outlays:

October 2014 income and outlays

September Case-Shiller A-L:

September 2014 Case Shiller A-L

September Case-Shiller M-Z:

September 2014 Case Shiller M-Z

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October’s consumer & producer prices, industrial production, new housing starts, old housing sales, and state jobs report, et al

the important economic reports of the past week were the October G17 release on Industrial Production from the Fed and the Consumer Price Index for October from the Bureau of Labor Statistics….the BLS also released its report on the October producer price index, which in addition to wholesale prices for goods now also includes changes in the margins received by service industries, its report on Regional and State Employment for October, and its report on real average hourly earnings for October, which indicated an inflation adjusted average 0.1% increase in earnings for all employees…for housing, we saw the October report on new home construction and the National Association of Realtor’s report on October sales of existing homes…in addition, this week also saw the first three regional manufacturing surveys for November from Fed district banks: the New York Fed reported that its November Empire State Manufacturing Survey, covering a district that includes New York and northern New Jersey, showed its composite general business conditions index at 10.2, up from 6.2 in October, in a diffusion index where values over zero indicate growth….then the Philadelphia Fed’s November Manufacturing Business Outlook Survey reported that its broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 20.7 in October to 40.8, its highest reading since December 1993, as 49% of the firms in the district covering Pennsylvania, southern New Jersey, and Delaware reported expansion…lastly, the November Kansas City Fed manufacturing survey (pdf), covering a region that includes western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported that their broadest composite index rose from 4 in October to 7 in November, indicating ongoing manufacturing growth at a slightly faster pace…

CPI Unchanged in October on Higher Priced Services, Cheaper Gas

overall consumer prices were flat in October after inching up in September as considerably lower energy prices offset modest price increases in food, shelter and a number of other index components…the Consumer Price Index for All Urban Consumers (CPI-U) for October from the Bureau of Labor Statistics indicated that seasonally adjusted prices were unchanged after rising 0.1% in September and falling 0.2% in August, while they were 1.7% higher than a year earlier …the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, actually fell to 237.433 in October from 238.031 in September, while it still remained 1.66% higher than the 233.546 reading from October of last year…as the drop in energy prices energy prices was the major drag on the index in October, core prices, which exclude food and energy, rose by 0.2%, as the unadjusted core index rose from 238.841 in September to 239.413 in October, while that index was 1.81% ahead of its year ago level of 235.162…

the seasonally adjusted energy price index fell by 1.9% in October after falling a total of 3.3% over the prior two months as prices for energy commodities were 3.0% lower while the index for energy services fell 0.2%…energy commodity prices decreased on a 3.0% drop in the price of gasoline, the largest component, and a 4.0% drop in fuel oil prices, while prices for other fuels, including propane, kerosene and firewood, averaged a 0.5% decrease…within energy services, the index for utility gas service fell by 2.7%, the fourth decrease in five months, while the electricity price index rose 0.5% after falling 0.7% in September…energy commodities are now priced 4.9% below their year ago levels, with gasoline down 5.0%, while the energy services price index is 3.2% higher than last October…

the seasonally adjusted food index rose by 0.1% in October, after rising 0.3% in September, and it is now 3.1% higher than October a year ago….prices for food away from home rose by 0.2% as prices for meals at full service restaurants rose by 0.2% and prices at fast food restaurants were 0.3% higher, while prices for food at schools rose by 1.4%, and prices for food from vending machines and other food away from home fell by 0.1%….meanwhile, the price index for food at home just rose 0.1% as lower prices for meats partially offset higher prices for the other major food groups….the index for cereals and bakery products was 0.3% higher than in September as a 1.5% increase in prices for breakfast cereals and 0.6% higher priced cakes and cupcakes more than offset a 1.3% drop in bread prices…dairy products prices were 0.5% higher in October as cheese prices rose 0.7% while milk prices fell 0.5%….prices for fruits and vegetables rose 0.9% as prices for tomatoes rose 4.6%, prices for citrus fruit rose 3.8%, prices for potatoes rose 3.4%, and prices for canned vegetables rose 1.8% while frozen fruit and vegetable prices fell 1.1%…prices for nonalcoholic beverages and beverage materials were also 0.6% higher in October than September as prices for frozen juices and drinks rose 2.6% and prices for fresh juices and non-carbonated drinks rose 1.1% while coffee prices fell 0.5%…meanwhile, prices for the meats, poultry, fish, and eggs group fell by 0.4% as poultry prices fell 1.2% on 1.8% lower chicken prices, seafood prices fell 0.8% on prices for fresh fish that were 1.9% lower, pork prices fell 0.7% on 2.5% cheaper bacon, while beef prices rose 0.3% on 1.0% higher ground beef…even with some lower prices this month, prices for the various cuts of beef remain between 15.6% and 20.7% higher than a year earlier, while pork chops were up 13.7% on the year and ham prices were 12.6% more than last October…lastly, prices for other foods at home also fell by 0.4% as prices for sugar and artificial sweeteners fell 2.2%, prices for soups fell 1.6%, prices for olives, pickles, and relishes and for salt and other seasonings and spices fell 1.5%, and prices for frozen and freeze dried prepared foods fell 1.2% while butter prices rose 5.1%…for the year, butter prices have now risen 29.8%, which was the largest line item annual increase in the index…

within the seasonally adjusted core components of the CPI, which rose by 0.2% in October, we find that the composite of all commodities less food and energy commodities was statistically unchanged, while the composite for all services less energy services rose by 0.3%….the index for shelter, which is almost 32% of the CPI, rose by 0.2%, with rents rising 0.3% and homeowner’s equivalent rent rising 0.2%, while prices for lodging away from home rose by 0.7%, water & sewer bills rose 0.8%, as did the cost of household operations, with lawn care services rising 1.6%….meanwhile, prices for household furnishings and supplies, the commodity component of housing, rose by 0.4%, with a 1.4% jump in prices for living room, kitchen and dining room furniture and an 0.8% increase in prices for decor items offsetting a 1.2% decrease in the price of floor coverings…the price index for apparel fell 0.2% in October as a 4.0% decrease in prices for men’s suits, coats, and outerwear, a 2.0% cut in the price of jewelry and 1.8% drop in prices for women’s outerwear was offset by increases of 4.3% in the prices of women’s dresses and 2.8% in the price of children’s footwear ..the aggregate index for medical care, meanwhile, rose 0.2% in October as the medical care services index rose 0.2% on a 0.6% increase in services from medical professionals other than doctors and dentists and a 0.3% increase in outpatient hospital services, while the medical care commodity index was unchanged after rising 0.5% in September as a 2.1% decrease in non-prescription drug prices offset a 0.7% increase in prescription medicines….then, while the transportation composite index showed a 0.7% decrease, that index includes gasoline, which you’ll recall fell in price by 3.0%; prices for transportation commodities less fuel prices, however, fell just 0.1%, as prices for new cars and trucks rose 0.2% and prices for oil & other automotive fluids rose 0.7% while prices for used cars & trucks fell 0.9% and parts and equipment prices averaged 0.1% less….at the same time, the transportation services index rose 0.8% on 2.9% higher car and truck rentals, a 2.6% increase in train fares, and a 2.4% increase in airline fares….meanwhile, the recreation price index rose 0.2% as recreation commodities were unchanged as a 1.8% increase in prices for newspapers and magazines and a 0.7% increase in prices for pets and pet supplies was offset by a 1.2% drop in prices for televisions, a similar drop in prices for photographic equipment and supplies and 1.0% lower prices for audio discs and other media, while prices for recreation services rose 0.4% on 2.0% higher rental of video discs and other media, 0.8% higher priced cable and satellite television and radio services and 0.6% higher admissions to sporting events….lastly, the aggregate education and communication price index fell 0.2% as education and communication commodities fell 0.1% as a 1.1% drop in prices for telephones and other consumer information hardware more than offset a 0.7% increase in prices for college textbooks, while education and communication services fell 0.2% as a 1.9% decrease in charges for wireless phone services was partially offset by a 0.7% increase in college tuitions and fees and 0.5% higher postage…other than the aforementioned increases in meat and butter prices, the only other line item among CPI components that showed an annual price change greater than 10% was televisions, which are now 14.1% cheaper than they were a year earlier… 

our FRED graph below shows the overall change in each of the major component indexes of the CPI since January 2000, with all the indexes reset to 100 as of that month for an apples to apples comparison of the price changes in each since…in blue, we show  the relative track of the price index for food and beverages; in bright green, we show the reset price index for all housing components, which includes rent, homeowners equivalent rent, utilities, insurance & household maintenance; in red, we have the price changes for apparel, the only index to show a net price decline over the previous decade; while the relative change in the price index for medical care shown in violet has obviously seen the greatest price increase over the period…next, the transportation price index is in orange, and shows the impact of volatile fuel prices on the cost of transportation, while the price change for education and communication over the period is tracked in brown, and in dark green is the relative strength of the index for recreation prices…finally, we’ve added the track of the overall CPI-U in black, which tends to track close to the large housing component, which makes up 41.5% of the total index…this graph can also be viewed as an interactive, wherein you can track the monthly changes in all of these relative price indexes by dragging your cursor across the graph…  

October 2014 CPI components

Producer Prices Rose 0.2% October on Greater Demand for Trade Services

the October report on the Producer Price Index from the Bureau of Labor Statistics indicated that the seasonally adjusted producer price index for final demand rose by 0.2% from September, when producer prices fell 0.1% after they were unchanged in August, leaving the year over year  increase in the index at 1.5%…the index for final demand for services rose by 0.5%, predominately because the index for final demand for trade services, a measure of the change in margins received by wholesalers and retailers, rose by 1.5%, the biggest jump on record for this relatively new index, while the index for final demand for transportation and warehousing services fell 0.1% and  prices for final demand for services less trade, transportation, and warehousing services rose 0.1%…meanwhile, the price index for final demand for goods, aka ‘finished goods’, fell 0.4% after falling 0.2% in September and 0.3% in August…the price index for final demand for foods was up 1.0% as wholesale fresh vegetable prices rose 8.6% & and wholesale pork prices rose 8.1% while wholesale oilseeds were 3.6% lower priced than in September; however, that wholesale food price increase was more than offset by the 3.0% decrease in the price index for final demand for energy, which was driven by an 11.4% drop in the wholesale price of LP gas and a 7.1% drop in the price of home heating oil, while wholesale gasoline prices also fell 5.8%…meanwhile, the index for final demand for core goods was up 0.1%, as a 1.7% increase in wholesale prices for metal forming machine tools and a 1.1% increase in wholesale mining machinery and equipment prices was mostly offset by a 1.6% increase in the wholesale price for alcoholic beverages and a 1.2% increase in wholesale prices for tires…

meanwhile, this report also showed the price index for processed goods for intermediate demand fell 0.9%, the largest decrease since a 1.1% decline in March of 2013, as prices for intermediate processed foods and feeds fell 1.8% while prices for intermediate processed energy goods fell 3.2%, and even core intermediate producer prices were 0.2% lower….in addition, the price index for intermediate unprocessed goods fell 2.4% after rising 0.6% in September and is now 1.9% below the level of a year ago, on a 5.5% drop in the index for raw energy materials and a 2.9% drop in prices for unprocessed nonfood materials less energy, while producer prices for for unprocessed foods and feeds rose 1.0%……finally, the price index for services for intermediate demand rose 0.1% in October, as a 0.8% increase in the index for intermediate trade services and offset a 0.1% decrease in prices for intermediate services less trade, transportation, and warehousing, while prices for transportation and warehousing services for intermediate demand were unchanged…over the 12 months ended in October, the price index for services for intermediate demand rose 1.6%…

Industrial Production Falls 0.1% in October on Pullback in Gas and Oil, Utilities

the Fed’s G17 release on Industrial production and Capacity Utilization for October indicated that industrial production fell 0.1% from a September reading which was revised down from an increase of 1.0% to a increase of 0.8% …the industrial production index, which is benchmarked to 2007 production being equal to 100.0, fell to 104.9 from the previously issued reading of 105.1 for September, which was revised to 104.0, while the industrial production index for August was revised from 104.0 to 104.1 as the July index was revised from 104.2 to 104.3…the manufacturing index, which accounts for roughly 70% of the industrial composite, rose 0.2% in October to 100.6, while the manufacturing index for September was revised down from 100.5 to 100.4 after the July and August manufacturing indices were both revised up 0.2, to 100.7 and 100.2 respectively; as a result, the October manufacturing index is now 3.4% higher than the level of October 2013….. meanwhile the seasonally adjusted utility index, seeing 3.4% lower natural gas usage because of above normal October temperatures, fell 0.7% to 100.5, a reading which is now 1.3% below the level of last October… in addition, the mining index, which includes oil & gas production, fell 0.9% to 132.1 in October, after increasing by 1.6% in September, showing that the lower oil prices is finally having an impact of higher cost extraction processes, even as the index remains 9.9% higher than a year ago…

in addition to the breakdown of industrial production into the three major industry groups, this release also reports indexes for industrial production by market group…for output of final products and nonindustrial supplies, which was unchanged in October, seasonally adjusted production of consumer goods fell 0.2% after increasing a revised 0.4% in September…production of durable goods fell by 0.8% as the heavily weighted automotive products sector fell 1.7% and  production of consumer electronics fell 1.3%…meanwhile, production of non-durable goods was unchanged as output of consumer energy products fell 0.5% while output of non-energy non-durables rose 0.2%, as a 1.0% increase in the output of chemical products and a 0.5% increase in clothing production was offset by a 1.3% decrease in paper products production and unchanged food and tobacco output…over the preceding year, production of durable goods increased by 3.5%, led by 7.0% growth in output of appliances, furniture, and carpeting, and 6.9% increased output of consumer electronics, while annual production of non-durable goods grew by 0.8% as a 2.2% decrease in output of consumer energy products and a 4.4% decrease in production of paper products offset 5.1% growth of chemical products output and modest increases in output of other non-durables..

seasonally adjusted production of business equipment rose 0.6% in October after falling by a revised 0.4% in September as production of industrial equipment rose 1.3% and production of information processing equipment rose 0.8%, while production of transit equipment was fell 0.9%…over the past year, output of business equipment rose by 4.6%, as production of industrial  equipment rose by 5.7%, production of transit equipment rose by 4.4%, and output of information processing equipment rose by 1.3% ….meanwhile, production of defense and space equipment fell by 0.5% in October and grew by 0.8% over the year ending October…in addition, production of supplies for use in construction increased by 0.2% for the month and by 3.7% rate for the year, while production of business supplies fell 0.1% in October and grew 2.4% for the year…meanwhile, production of raw and intermediate materials that would input into other production processes fell by 0.2% in October while growing 5.7% over the year, with the output of energy materials up by 8.0% and the output of consumer parts up 7.2%, while raw and intermediate paper production fell 1.9% over the year ending October…

in the associated report on capacity utilization, which is the percentage of our plant and equipment that was in use during the month, the Fed found that the utilization rate for total industry fell 0.3% in October to 78.9%, which was still up from 78.2% in October last year….77.2% of our total manufacturing capacity was in use during October, down from 77.3% in September while up 1.0% from the factory operating rate of 76.2% in October of last year…the operating rate for NAICS classified durable goods manufacturers was at 77.3%, down from 77.4% in September, with capacity utilization ranging from 83.9% for manufacturers of electrical equipment, appliances, and components to a low of 64.4% for manufacturers of non-metallic mineral products, while the October operating rate for NAICS classified manufacturers of non-durables was at 78.9%, up from 78.7% in October, with the oil and coal products industry operating at 84.8% of capacity while textile mills were operating at a 72.9% rate…. meanwhile, capacity utilization by the ‘mining’ industry fell 1.5% from a revised 89.9% to 88.3%, reflecting a pullback in drilling by the oil and gas industry due to lower oil prices, while the operating rate for utilities fell from 79.1% to 78.5%, reflecting below normal consumption due to above normal temperatures….

our FRED graph for this report below shows the percentage of capacity in use for all industries monthly since 2007 in pink, while it shows the the seasonally adjusted industrial production index values for all industry in black, the manufacturing production index in blue, the utility production index in green, and the mining production index in red from the beginning of the index year of 2007, at which time they were all benchmarked to equal 100.0…the October downturn in utility and mining production is fairly evident: 

October 2014 industrial production

New Housing Construction Continues at a Million Units a Year Pace in October

according to the Census report on New Residential Construction for October (pdf) starts on new housing units were estimated to be at a seasonally adjusted annual rate of 1,009,000 in October, which was 2.8 percent (±10.0%)* below the revised estimated pace of 1,038,000 homes hypothetically being started annually in September, and 7.8 percent (±8.7%)* above the annual rate of 936,000 housing starts estimated for October a year ago…the asterisks indicate that the Census, based on their survey of a small percentage of permit offices visited by Census field agents, does not have sufficient data to determine whether housing starts rose or fell for the month or even for the year, while the numbers in parenthesis indicates their 90% confidence range, ie housing units started in October were likely at a seasonally adjusted annual rate ranging between 12.8% less and 7.2% greater than those in September…..the unadjusted estimates from which those annual rates were extrapolated indicated an estimated 84,000 total housing units were started in October, down from 95,500 in September, which was revised up from 93,200, with 57,200 of those single family dwellings, while construction was started on 26,100 apartment units in buildings with 5 or more units…

the monthly data on new building permits have a much narrower margin of error than new housing starts and hence are probably a better monthly indicator of new construction trends than the volatile and often dramatically revised starts data… in October, Census estimated new permits were issued at a seasonally adjusted annual rate of 1,080,000, a six year high which was 4.8 percent (±1.3%) above the revised September annual rate of 1,031,000 and 1.2 percent (±1.2%) above the 1,067,000 annual rate estimated for new permit issuance in October of last year…those estimates were extrapolated from the unadjusted estimate of 95,000 new permits issued in October, which was up from the estimated 90,700 new permits issued in September…of those units permitted in October, 56,100 (±1.3%) were for single family homes, and 35,700 (±3.6%) represented permits for housing units in building with 5 or more units…our FRED graph on this report below, which can also be viewed as an interactive at the FRED site, shows the seasonally adjusted annual rate of housing units started in thousands monthly in blue, and the annual rate of housing units authorized by building permits monthly in red since 2000…note that the number in thousands shown monthly for both metrics is an extrapolated estimate of how many units would be permitted or started over an entire year if that month’s pace were continued over 12 months…  

October 2014 new home construction

Existing Home Sales Increased by 1.5% in October

according to the National Association of Realtors (NAR), seasonally adjusted existing home sales rose 1.5% in October to an annual rate of 5.26 million completed transactions, from a revised annual rate of 5.18 million home sales in September, and were 2.5% above the annual sales rate of 5.13 million units that the NAR reported in October of last year….before the seasonal adjustment and conversion to an annualized figure, an estimated 444,000 homes sold in October, up 4.7% from the 436,000 homes that sold in September, and up 1.8% from the estimated 424,000 homes that sold in October a year ago…seasonally adjusted data (pdf) indicates that homes sales were up in every region of the country except the West, where they were down 5.0%, while the unadjusted data shows that sales rose in every region except the Midwest, where they were down 1.0%….

the preliminary median home selling price for all housing types was $208,300 in October, down a bit from $209,100 in September, but 5.5% higher than the $197,500 median sales price in October of last year, in home price data that is not seasonally adjusted…the average home sales price was $254,800, not much changed from the $255,000 average in September, while it was up 4.0% from the $245,000 average sales price in October a year ago, with regional average home prices ranging from a high of $339,000 in the West to the average of $197,300 for homes sold in the Midwest….foreclosed homes, which sold for an average of 15% below the price of similar homes in their market, accounted for 7% of October’s sales, while short sales, at 2% of all sales, were discounted by an average of 10%…the median time on the market for all homes was 63 days in October, up from 56 days in September, and up from a median of 54 days on the market in October a year ago.…those who bought houses with cash accounted for 27% of transactions in October, up from 24% in September but down from 31% all cash sales a year earlier, while those identified as investors accounted for 15% of all transactions, up from 14% in September but down from the 19% of all home sales to investors in October a year ago….30 year mortgage rates averaged 4.04% in October, down from 4.16% in September, and the lowest 30 year mortgage rate since June 2013; even so, the share of first time home buyers remained unchanged at 29% for the 4th consecutive month, still well below the historical average of 40%….2.22 million existing homes remained available for sale at the end of October, which would be a 5.1 month supply of unsold homes at the October sales pace, down from 5.3 months of unsold housing inventory in September but up 5.2% from the 4.9 month supply of 2.11 million existing homes available for sale a year earlier…

State and Regional Employment for October

this week also saw the release of the Regional and State Employment and Unemployment Summary for October, a report which further expands on the national employment situation summary we covered two weeks ago by breaking down the state and regional details…although we’re told in opening that 34 states and the District of Columbia had their unemployment rate decrease in October while 5 states saw a jobless rate increase and 11 states had no change, we know that the unemployment rate data comes from the household survey with its large margin of error, and they make that point later in the report when they tell us only 17 of those states had statistically significant monthly unemployment rate decreases, led by Kentucky, where the jobless rate fell from 6.7% in September to 6.2% in October, followed by four states that saw employment rates by drop by 0.4%: Colorado to 4.3%, Idaho to 4.1%, Missouri to 5.9%, and North Carolina to 6.3%…meanwhile, Washington, where the unemployment rate rose from 5.7% to 6.0%, was the only state that saw a statistically significant increase in unemployment….the BLS table with the seasonally adjusted count of the unemployed and the unemployment rate for each state is here

as with the national report, the sections of this report that correspond to the establishment survey are more informative, in that they show the number & types of jobs added or lost in each state, ranging from the increase of 41,500 jobs in California, 35,200 jobs in Texas and 34,400 jobs added in Florida, to the net decreases of 7,300 jobs in Nevada, 2,800 in Montana and 2,600 in Rhode Island…for a breakdown of payroll employment by job type for each state over the past 3 months, and the change in employment since last September, see the following two BLS tables accompanying this release: Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted and Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

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Nov 22 graphs on October reports

industrial production:

October 2014 industrial production

new housing:

October 2014 new home construction

CPI components:

October 2014 CPI components

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October’s retail sales, September’s inventories and job openings, & the 3rd quarter’s mortgage delinquencies

it was a fairly light week for economic data, with the key release being on retail sales for October from the Census Bureau; in addition, there were also two Census reports on September wholesale and business inventories, which might have an impact on third quarter GDP revisions…we also saw the Job Openings and Labor Turnover Survey (JOLTS) for September from the Bureau of Labor Statistics, and the 3rd quarter National Delinquency Survey from the Mortgage Banker’s Association, a report which covers the same data as the monthly mortgage monitor…

Retail Sales Increase 0.3% in October

the Advance Retail Sales Report for October (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales were at $444.5 billion in October, which was an increase of 0.3% (±0.5%)* from the revised September sales of $443.0 billion, and 4.1% (±0.9%) above sales in October of last year…..recall that the asterisk on September’s sales indicates that from their small sampling of retail outlets, Census cannot yet determine for sure whether sales rose or fell for the month…September’s seasonally adjusted sales were originally reported at $442.7 billion, and although there was a small upward revision, the percentage change from August to September remained unrevised as a drop of 0.3% (±0.2%)…..estimated unadjusted sales in October, extrapolated from surveys of a small sampling of retailers, indicated sales rose to $440,562 million in October from $425,110 million in September, and up from the $421,358 million in October a year ago, so we can see there were small upward seasonal adjustments to sales data for both months…

to break down the details of this October retail sales estimate, we’ll again start by including the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf…..the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from September to October in the first sub-column, and then the year over year percentage change for those businesses since last October in the 2nd column; the second pair of columns gives us the revision of last month’s September advance estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the August to September change under “August 2014 revised” and the revised September 2013 to September 2014 percentage change in the last column shown…for reference, here is what those September percentage changes looked like before this month’s revision….  

October 2014 retail sales table

looking at the details for October sales in the first column above, we see that motor vehicle and parts sales rose by 0.5% to a seasonally adjusted $89,659 million after falling 1.2% in September; however, excluding motor vehicles and parts, retail sales still rose 0.3% in October to $354,832…other than automotive products, October’s retail sales gains were stronger than average for nonstore (online and mail order) retailers, where sales rose 1.9% to $40,839 million; for specialty stores, such as sporting goods, book and music stores, where sales rose 1.2% to $7,479 million; for bars and restaurants, where sales rose 0.9% to $48,645 million; for health and drug stores, where sales rose 0.7% to $25,491 million; for miscellaneous store retailers, where sales rose 0.6% to $10,065 million, and for clothing stores, where sales rose 0.5% to $21,122 million…on the other hand, October sales were weaker at electronics and appliance stores, where sales fell 1.6% from the September high to $9,189 million, at gas stations, where sales fell 1.5% to $43,860 million on lower gas prices, and at department stores, where sales fell 0.3% to $13,785 million, while overall sales at general merchandise stores were flat at $55,760 million..

although the September 0.3% decrease in overall retail sales went essentially unrevised, there were revisions in sales for many of the component business types worth noting…the table of component changes from last month’s advance release is here, while the revised changes for September are shown in the last two columns in the table above…we can first note that September sales at auto dealers, the largest component of retail sales, were revised from the originally reported 0.8% decrease to a drop of 1.3%, although the decrease for the entire automotive sales group was a bit less at 1.2%…what that revision means is that retail sales for September excluding the automotive sales was unchanged, rather than the 0.2% decline reported a month earlier…other retail businesses seeing a sizable negative revision to their September sales included general merchandize stores, which had been reported seeing 0.2% sales growth, and are now seen with a 0.2% decline in sales, miscellaneous stores, whose September sales were revised from a decrease of 0.2% to a 1.7% decrease, and clothing stores, where a 1.2% decrease was revised to 1.5% lower sales…several business types also saw their September sales revised higher; sales at electronics and appliance stores, which had been reported with a 3.4% increase, have been revised to show a 4.7% increase, largely on the strength of iphone6 sales; furniture stores, where sales had been reported down 0.8%, are now seen as unchanged; nonstore or online sales, originally reported down 1.1%, are now seen dropping just 0.3% in September; similarly, sales at  building materials and garden supply stores, which were originally reported as down 1.1%, have been revised to a 0.6% decrease; sales at specialty store sales, as sporting goods, book and music stores, were also revised from a 0.1% decrease to a 0.5% increase, and sales at food and beverage stores, originally reported as unchanged, are now seen as 0.4% higher in September…

September Wholesale Inventories and Overall Business Inventories Both Rise 0.3%

the first release covering inventories we saw this week was on Wholesale Trade, Sales and Inventories for September from the Census Bureau, which reported that seasonally adjusted sales of wholesale merchants rose 0.2 percent (+/-0.9)* to $454.3 billion from the revised August estimate of $455.2 billion, and were up 5.2% (+/-1.6%) from September a year earlier…the August preliminary sales estimate was revised upward $0.4 billion or 0.1%, and hence was down 0.8% from July…September wholesale sales of durable goods were up 0.5 percent (+/-0.9%)* over August and were up 5.4 percent (+/-1.6%) from September a year ago, as wholesale hardware, plumbing & heating equipment sales rose 4.8% while miscellaneous wholesale sales fell 1.5%…seasonally adjusted sales of nondurable goods were down 0.1% (+/-1.4%)* from August but were up 5.1 percent (+/-3.0%) from last September as wholesale sales of apparel and piece goods rose 4.0% while sales of paper products fell 2.6%…note that the asterisks indicate that Census does not have sufficient statistical evidence to determine whether sales actually rose of fell for the periods indicated….in addition, this release reported that seasonally adjusted wholesale inventories were valued at $538.8 billion at the end of September, 0.3% (+/-0.4%)* higher than the revised August  level and  7.4% (+/-0.9%) above last September’s level, while August’s preliminary inventory estimate was revised downward $0.6 billion or 0.1%…wholesale durable goods inventories were up 0.8 percent (+/-0.4%) from August and up 9.0 percent (+/-1.4%) from a year ago, with wholesale inventories of computers and peripherals up 3.4% while inventories of electrical equipment were down 0.7%…inventories of nondurable goods were down 0.6%(+/-0.4%) from August while they were up 4.9% (+/-0.7%) from last September, as inventories of wholesale chemicals were up by 2.4% while wholesale inventories of petroleum and petroleum products were down 5.3%… finally, the closely watched inventory to sales ratio of merchant wholesalers was at 1.19, unchanged from August but up from the inventory to sales ratio of 1.16 in September of last year…

on Friday, the Census Bureau released the Manufacturing and Trade Inventories and Sales report for September, covered in the media as the business inventories report, which estimated the combined value of seasonally adjusted distributive trade sales and manufacturers’ shipments was at $1,352.5 billion in September, virtually unchanged (±0.3%)* from August, while 4.1% (±0.6%) above the total monthly sales level of September of last year…manufacturers sales were estimated at $503,424 million, retailer’s sales were estimated at $394,793 million, while merchant wholesalers accounted for $454,298 million of the overall total….meanwhile, total manufacturer’s and trade inventories were estimated to have increased 0.3 percent (±0.1%) from August to a seasonally adjusted $1,756.1 billion at the end of September, which was up 5.3 percent (±0.5%) from September a year earlier…seasonally adjusted inventories of manufacturers were estimated to be valued at $655,190 million, inventories of retailers were estimated to be valued at $562,078 million, and inventories of wholesalers were estimated to be valued at $538,832 million at the end of September…the month end total business inventories to total sales ratio, the metric which is watched to determine if inventories are becoming excessive, was at 1.30, unchanged from August but up from 1.28 September a year ago…

Job Openings Slip In September as Job Quits Hit Post Recession High

the September Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics estimated that seasonally adjusted job openings fell by 118,000 to 4,735,000 at the end of September, while the estimate for jobs open at the end of August was revised up by 18,000 from the originally reported 4,835,000 openings to 4,853,000….job openings in restaurants and hotels fell 24,000 to 605,000 and openings in construction fell 23,000 to 98,000, while openings in professional and business services rose by 36,000 to 964,000…..job openings as a percentage of the employed labor force fell to 3.3% from 3.4% in August, but it was still up from 2.8% in September a year ago and up from a low of 2.7% in January…based on 9,262,000 officially unemployed in September, there would be two unemployed who were actually looking for work during September for every job opening; that, of course, does not count those who might have wanted a job but didn’t look for work during the month…

the JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which include retirements and deaths…. in September, seasonally adjusted new hires totaled 5,026,000, up 284,000 from the 4,742,000 hired or rehired in August, as the hiring rate as a percentage of all employed rose from 3.4% to 3.6%, the same level as July and also up from the 3.4% hiring rate in September a year earlier…while hiring fell in construction by 54,000 to 276,000, it rose by 111,000 to 548,000 in health care services and rose by 48,000 to 280,000 in manufacturing….total separations also rose, from 4,531,000 in August to 4,788,000 in September, as the separations rate as a percentage of the employed rose from 3.3% to 3.4%, and up from 3.3% a year ago…subtracting the 4,788,000 total separations from the total hires of 5,026,000 would imply an increase of 238,000 jobs in September, 18,000 less than the revised payroll job increase of 256,000 for September reported by the BLS establishment survey last week, a difference not unexpected between these two surveys that both have wide confidence intervals…

further breaking down the seasonally adjusted job separations, we find that a post recession high of 2,753,000 quit their jobs in September, 243,000 more than the revised 2,510,000 who quit their jobs in August, while the quits rate, an indicator of worker confidence which is being watched by the Fed, rose from 1.8% to 2.0% of total employment…..in addition to those who quit, another 1,647,000 were either laid off, fired or otherwise discharged in September, up 28,000 from the 1,619,000 discharges in August, which left the discharges rate unchanged at 1.2% of all those who were employed during the month….meanwhile, other separations, which includes retirement and death, were at 388,000 in September, down from 402,000 in August, for an ‘other separations’ rate of 0.3%, which was unchanged….our FRED graph for this report below shows job openings in blue in thousands monthly since January 2005, and monthly hires in orange and monthly separations in violet over the same span…note that months when separations in purple were above hires in orange, we were losing jobs…the two major components of separations are also included below, the count of layoffs and firings is tracked in red, while the number of those quitting their jobs monthly is shown in green, clearly visible as a post recession high….    

September 2014 JOLTS

3rd Quarter Mortgage Delinquency and Foreclosure Rates Lowest Since 2007

this week also saw the release of the Mortgage Bankers Association’s (MBA) National Delinquency Survey for the 3rd Quarter, which, like the September Mortgage Monitor we reviewed last week, gives us a snapshot of mortgages that are in trouble as of the end of September, except that the MBA seasonally adjusts mortgage delinquencies and foreclosures, and since historically the 3rd quarter has been a bit higher for mortgage delinquencies & foreclosures, MBA’s 3rd quarter numbers have been adjusted downward a bit…in addition, the MBA has historically reported a higher rate of delinquencies and foreclosures, presumably from the same mortgage data…with those caveats, the MBA reported that 2.39% of all mortgages were in the foreclosure process at the end of the quarter, down from 2.49% at the end of the 2nd quarter and down from 3.08% that were in foreclosure a year earlier; the MBA also reported an additional 5.85% of home owners with a mortgage were at least one month overdue on their payments but not in foreclosure at the end of the quarter, down from a delinquency rate of 6.04% at the end of the 2nd quarter and down from 6.41% who were delinquent on their mortgages at the end of the 3rd quarter last year…the seriously delinquent rate, which is the percentage of mortgages that are more than 90 days overdue or in the process of foreclosure, was at 4.65%, down from 4.80% last quarter and down from 5.65% who were seriously delinquent a year ago…in contrast to this MBA report, last week the BKFS Mortgage Monitor reported an unadjusted foreclosure inventory rate of 1.76% of all mortgages, a delinquency rate of 5.90%, and a serious delinquency rate of 3.97%…the MBA also reports that foreclosures were started on 0.40% of mortgages in the 3rd quarter, which would not be directly comparable to the 91,038 new foreclosures the Mortgage Monitor indicated for the single month of September. but the three month total of foreclosure starts would be roughly 0.51% of the active loan count at the end of Septemberthe bar graph below, taken from Bill McBride’s coverage of this MBA report, is a color coded representation of the percentage of mortgages in foreclosure and delinquent since the 1st quarter of 2005….each bar shows the portion of 30 day delinquencies reported by the MBA for each quarter in violet, the percentage of 60 to 90 day delinquent mortgages for each quarter in the blue portion of each bar, the percentage of mortgages more than 90 days late in yellow, and the percentage of homes in foreclosure in each quarter in red…we can see that the percentage of mortgages in trouble peaked at 14.7% in the first quarter of 2010 and has been trending downward since, although it’s still well above the levels of the pre-crisis year of 2005, especially with regards to 90 day delinquencies and homes stuck in foreclosure…

3rd qtr 2014 MBA delinquency survey via McBride

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

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September 15 screenshots

retail sales table:

October 2014 retail sales table

JOLTS:

September 2014 JOLTS

3rd quarter MBA delinquency survey:

3rd qtr 2014 MBA delinquency survey via McBride

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October jobs report, September’s trade, construction spending, factory orders, consumer credit and Mortgage Monitor, et al

  as is typical, there were several economic releases in this, the first week of the month, including the employment summary for October on Friday…the week also saw the release of trade data for September from the Commerce Dept, and the September Census reports on construction spending and factory orders, and the Fed report on September consumer credit…we also saw the Mortgage Monitor for September from Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division), the large graphic monthly report which we’ll again review this week…in addition, this week also saw the two widely watched diffusion indexes from the Institute for Supply Management (ISM), the October Manufacturing Report On Business, which saw its broad composite Purchasing Manager’s Index (PMI) rise to 59.0% from September’s reading of 56.6%, on a 5.8% increase in the new orders index to 65.8%, indicating a larger plurality of manufacturing purchasing managers saw growth in October than did in September, and the October Non-Manufacturing Report On Business, which saw its composite Non-manufacturing Index slip to 57.1% from 58.6% in September, indicating that slightly fewer service industry purchasing managers reported growth in their business in October than did in September…

Employers Add 214,000 Payroll Jobs in October; August and September Revised Up

the October survey of establishments conducted by the Bureau of Labor Statistics indicated that nonfarm payroll employment increased by a seasonally adjusted 214,000 jobs to 139,680,000 jobs, slightly less than was expected, while August’s payroll jobs count was revised up from 180,000 to 203,000, and September’s count was revised up from 248,000 to 256,000, hence resulting in a reported net addition of 245,000 seasonally adjusted jobs with this release, and the highest year to date job creation count since 1999….the unadjusted establishment data indicates that there were actually 1,064,000 non-farm payroll jobs added in October, as seasonal retail hiring began and more jobs were regained in local and state education before the seasonal adjustment, so the seasonal adjustment was a major factor this month…the FRED bar graph below incorporates the seasonal adjustments and the revisions to the August & September reports and shows the reported payroll job change monthly since the beginning of 2008, with job gains above the zero line and job losses below it…  

October 2014 payroll jobs

seasonally adjusted payroll jobs increased in most major sectors in October, led by an increase of 52,000 additional jobs in the leisure and hospitality sector, with 41,800 of those working in bars and restaurants….an additional 37,000 slots were added in the broad professional and business services category, with 24,000 of those in employment services and another 6,800 in computer systems design and related services….there were also 27,100 more jobs added in retail, with 11,900 of those working in general merchandise stores…employment also increased with the addition of 27,200 jobs in health care and social assistance, with the addition of 18,500 in ambulatory health care services, 7.400 of which were in home health care services…there were also 15,000 more jobs in manufacturing, with 14,000 of those added by durable goods manufacturers; in addtion, 13,700 were added in educational services, there were 13,300 more jobs in transportation and warehousing, and 12,000 added in construction, 10,300 of which were working for specialty trade contractors….job additions by other sectors included 8,500 in the wholesale trades, 5,000 in government, 4,000 in financial services and 1,000 in resource extraction…the information sector, with 4,000 less payroll jobs than in September, was the only sector to show a decrease in seasonally adjusted employment…

the average workweek for all payroll employees rose to 34.6 hours in October after 6 months at 34.5 hours, with longer workweeks in construction, resource extraction and utilities and generally stable workweeks in the services sector…the manufacturing workweek unchanged at 40.8 hours and factory overtime fell by 0.1 hour to 3.4 hours….the average workweek for production and nonsupervisory employees, also rose by 0.1 hour to 33.8 hours, as the largest nonsupervisory workweek increases of 0.3 hours were again seen in construction and resource extraction…the average hourly pay for all workers rose by 3 cents an hour to $24.57 an hour, with their year over year increase at 48 cents, or less than 2%, while the average pay for nonsupervisory workers rose by 4 cents to $20.70, while their year over year average hourly pay rose 45 cents, a 2.2% average increase in hourly pay over the past year…

Households Estimate 5.8% Unemployment; Labor Force Participation and Employment Rate Rises In October

the personal employment data extrapolated from the October survey of 60,000 households reversed the record weakness reported in September, with the wide swing likely reflecting the small sampling and the resultant +/- 300,000 margin of error in the number unemployed herein…the October household summary indicated that the seasonally adjusted count of the employed rose by 683,000 to 147,283,000, a number not directly comparable to the establishment data, since it also includes farm workers and the self-employed… meanwhile, the count of the unemployed fell by 267,000 to 8,995,000, which together with the employed means the number of us who were counted in the labor force rose by 416,000 to 156,278,000, leaving the unemployment rate, or those counted as unemployed as a percentage of the total, at 5.8%, down from 5.9% in September…so, with an increase of 211,000 in the working age population, the count of those not in the labor force fell 206,000 from its September record to 92,378,000, and as a result the labor force participation rate rose by 0.1% from its 36 year low of 62.7% in September to 62.8% in October…with the large increase in the count of the employed, the employed to population ratio rose by 0.2%, from 59.0% in September to 59.2% in October….our FRED graph below shows the employment to population ratio, which we could think of as the employment rate, in blue, and the labor force participation rate in red, back to the turn of the century…

October 2014 household survey metrics

of the seasonally adjusted total of 147,283,000 of us counted as being employed in October, 119,632,000 reported they were working full time, 345,000 more than in September, while 27,693,000 reported they were working part time, or less than 34 hours in the reference week, an increase of 334,000 part time workers over the September part time count…of those, the count of those working part time who would rather work full time fell by 76,000 to 7,027,000; as a result of that the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, fell by 0.3% to 11.5%…meanwhile, the number of us unemployed for more than 27 weeks who were still looking for work fell by 38,000 in October to 2,916,000, while the median duration of unemployment rose nonetheless, from 13.3 weeks to 13.7 weeks…among the 92,584,000 of us not officially in the labor force and hence not counted as unemployed, 6,122,000 reported that they still wanted a job, up from 6,007,000 in September, and up from 5,683,000 in last October; of those, 2,192,000 were categorized as “marginally attached to the labor force” because they had looked for work sometime during the last year, but not during the 30 day period covered by the October survey…770,000 of those were further characterized as “discouraged workers”, because they reported that they haven’t looked for work because they believe there are no jobs available to them…  

September Trade Deficit Jumps $3.0 Billion on Record Goods Deficit with China

the September report on our International Trade in Goods and Services from the Commerce Department indicated that our seasonally adjusted trade deficit in goods and services was at $43.0 billion for the month, up from the revised trade deficit of $40.0 billion in August, as our exports fell $3.0 billion to $195.6 billion on a $2.6 billion decrease to $136.1 billion in our goods exports and a $0.4 billion decrease to $59.5 billion in our exports of services, while our imports rose $0.1 billion to $238.6 billion on a $0.1 billion decrease to $198.7 billion in our imports of goods, while our imports of services rose $0.2 billion to $39.9 billion….the August trade deficit was revised down from the previously reported $40.1 billion, giving us a third quarter trade deficit of $123.3 billion, down from the 2nd quarter deficit of $130.2 billion…when computing GDP for the 3rd quarter, the BEA assumed that exports would increase and imports would decrease in September, so they were wrong on both counts, leading economists to mark down their estimates on third quarter growth by as much as 0.7%…since last September, our overall trade deficit has increased by $0.8 billion, on an $5.3 billion increase in exports and a $6.1 billion increase in imports…

the end use categories of exports that fell in September included industrial supplies and materials, exports of which fell by a seasonally adjusted $2,045 million to $42,187 million, as we exported $216 million less crude oil, $651 million less fuel oil, $960 million less of other petroleum products and $253 million less finished metal shapes…..exports of capital goods fell by $1,167 million to $45,945 million on $360 million less civilian aircraft exports, $240 million less exports of civilian aircraft parts, a $216 million drop in exports of computer accessories, $188 million less exports of industrial engines, and $182 million less exports of telecommunications equipment…in addition, our September exports of consumer goods fell by $687 million to $16,586 million on $429 million less exports of jewelry and $360 million less exports of pharmaceuticals, our exports of automotive vehicles, parts, and engines fell by $104 million to $13,488 million, and our exports of goods not categorized by end use fell by $131 million to $5,351 million…meanwhile, our exports of foods, feeds and beverages rose $1295 million to $11,812 million on a $1,746 million increase in soybean exports, which were partially offset by $123 million less exports of wheat, $99 million less exports of corn, and $98 million less exports of dairy products and eggs…

the August to September decrease in imports of goods included a $1,104 million drop to $54,530 in our imports of industrial supplies and materials, on decreases of $462 million in imports of non-monetary gold, $429 million less imports of crude oil, $321 million less imports of fuel oil, and $279 million less imports of organic chemicals and fertilizers…our $49,941 million in imports of capital goods was $940 million less than in August, as we imported $785 million less worth of civilian aircraft while we imported $238 million more in civilian aircraft engines; our imports of automotive vehicles, parts, and engines also fell by $515 million to $27,013 million…meanwhile, we imported $47,698 million in consumer goods, $1,910 million more than in August, as we imported $1,919 million more in cell-phones with the release of the iphone6; in addition, our imports of foods, feeds & beverages increased by $98 million to $10,639 million with $114 million more imports of fish and shellfish and $112 million more imports of meat products, and our imports of our imports of goods not categorized by end use rose by $304 million to $6,727 million…

included below is Bill McBride’s graph of our trade deficit from his coverage of this report, which shows the relationship of our net petroleum trade deficit to our deficit overall….reading from the top $0 line down, the black graph line tracks our deficit in petroleum trade as a negative in billions of dollars since 1998; over the same span, the red graph shows our trade deficit for everything else except oil, also as a negative from the $0 line; combined together, those two sum to our total trade deficit, which Bill has graphed in blue…it’s pretty clear that even though our oil deficit in black has generally been falling (ie, going up towards zero on this chart) over the past few years, our trade deficit in everything else in red has continued to grow…in September, 80% of that deficit in “everything else” was with China, as our imports from China alone rose to a record $44.9 billion on the surge in buying of cell phones with the release of the iphone6…

September 2014 trade deficit via McBride

Construction Spending Falls 0.4% in September; Unfilled Factory Orders Rise 0.3%

the Census report on Construction Spending for September (pdf) estimated that our seasonally adjusted construction spending for the month would work out to an annual rate of $950.9 billion of spending overall, 0.4 percent (±2.0%)* below the revised August estimate of spending at a $955.2 billion annual rate but 2.9 percent (±2.1%) above last September’s adjusted and annualized level of construction spending….construction spending for August was revised from the originally reported $961.0 billion to $955.2 billion and construction spending for July was revised down from $968.8 billion to $960.0 billion, so construction spending for the entire third quarter is considerably lower than previous estimates, and will likely result in downward revisions of GDP components for residential construction, private structures, and public investment…..private construction spending was at a seasonally adjusted annual rate of $680.0 billion in September, 0.1 percent (±1.0%)*  lower than the revised August estimate, with residential spending rising 0.4 percent (±1.3%)* above the revised August estimate of $347.7 billion and non-residential construction falling 0.6 percent (±1.0%)*, while public construction spending was estimated at $275.9 billion, 30.9 percent (±2.8%)* below the revised July estimate…

the Census Bureau also released the Full Report on Manufacturers’ Shipments, Inventories, & Orders for September (pdf), which showed new orders for manufactured goods fell by $2.8 billion or 0.6% to $502.0 billion, after falling a record $56.0.billion or 10.0% in August, as new orders for commercial aircraft weakened further…this report also showed factory shipments increased by $0.7 billion or 0.1% to $503.4 billion, after falling 1.0% in August, and that September factory inventories rose by $1.5 billion or 0.2% to a record high $655.2%, and unfilled factory orders rose by $3.7 billion or 0.3% to $1,168.7, which was also the highest level value of unfilled orders on record….    

September Consumer Credit Rises at 5.9% Rate; October Vehicle Sales Flat

the Fed’s G.19 Release on Consumer Credit for September indicated that total seasonally adjusted consumer credit outstanding increased by $15.9 billion to $3,267.0 billion, or at a 5.9% annual rate… the revolving credit portion of the aggregate, which would mostly be credit card debt, increased by $1.5 billion, or at a 2.0% annual rate, to $881.8 billion, while non-revolving credit, which includes loans for cars and college tuition but not borrowing for real estate, rose at by $14.5 billion to $2,385.2 billion, an annual growth rate of 7.3%….for the third quarter, consumer credit outstanding rose at a 6.6 annual rate, with revolving credit increasing at a 3.0% rate and non-revolving credit rising at 7.9% rate…looking ahead at a market where credit is often used, the report on October light vehicle sales from Ward’s Automotive estimated vehicle sales were occurring at a 16.35 million annual rate during the month, up a hair from the annual rate of 16.34 million reported for September and 6% higher than last October, with year to date sales now running 5.4% ahead of 2013…

September Foreclosure Starts Rise 11.55% as Average Time In Foreclosure Rises to Record 1014 Days

according to the Mortgage Monitor for September (pdf) from Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division), there were 892,796 home mortgages, or 1.76% of all mortgages outstanding, remaining in the foreclosure process at the end of September, which was down from 935,460, or 1.80% of all active loans that were in foreclosure at the end of August, and down from 2.63% of all mortgages that were in foreclosure in September of last year…these are homeowners who had a foreclosure notice served but whose homes had not yet been seized, and September’s so-called “foreclosure inventory” was the lowest percentage of homes in foreclosure since early 2008… new foreclosure starts, however, rose in to 91,038 in September from 81,612 in August and have now risen four out of the last five months, while they still remain well below the 108,953 foreclosures started in September of last year…

in addition to homes in foreclosure, September data showed that 2,877,977 mortgage loans, or 5.67% of all mortgages, were at least one mortgage payment overdue but not in foreclosure, down from 5.90% of homeowners with a mortgage who were more than 30 days behind in August, and down from the delinquency rate of 6.46% a year earlier…of those who were delinquent in August, 1,117,525 home owners were considered seriously delinquent, which means they were more than 90 days behind on mortgage payments, but still not in foreclosure at the end of the month…thus, a total of 7.43% of homeowners with a mortgage were either late in paying or in foreclosure at the end of August, and 3.97% of them were in serious trouble, ie, either “seriously delinquent” or already in foreclosure at month end… 

the graph below, from page 6 of the Mortgage Monitor pdf, is a graphic representation of the number of mortgages that were in trouble in each month since the beginning of 2005; the height of each bar corresponds with the total delinquent and in foreclosure mortgage loans for that given month, and within each of those bars the purple color indicates the number of homes in foreclosure, the green indicates the number of mortgages that were more than 90 days delinquent but not yet in foreclosure, the red indicates the number of mortgages that were between 60 and 90 days past due, and the blue indicates the number of mortgages that had just missed one monthly payment…

September 2014 LPS loan count buckets bar graph

the next graph below, taken from page 5 of the Mortgage Monitor, is a graphic representation of the prior status of the new foreclosure starts as they occurred in each month since the beginning of 2008; each bar represents a month and within each bar we have foreclosure starts on mortgages that have never been in trouble previously in blue, and foreclosure starts on mortgages that had been in foreclosure at least once before, presumably cured their previous foreclosure by either catching up on payments or through a modification of their loan, only to fall behind on payments again and end up in foreclosure another time…the green line then shows these repeat foreclosures as a percentage of total foreclosure starts for the month, and as they note, for the past 6 months more than half of new foreclosures are such repeaters…(they also try to suggest that the 11.55% increase in September foreclosure starts was a result of an abnormally low number of foreclosure starts in August, but since April foreclosures were almost 5% lower than August, that seems like spin from here)

September 2014 LPS new and repeat foreclosures

a major focus of this month’s report was to spotlight the large percentage of outstanding second lien home equity lines of credit (HELOCs) that originated between originated between 2005 and 2007, most of which have draw periods of ten years, and hence will either owe a balloon payment or begin amortizing over the next three years…the bar graph below, from page 19 of the pdf, shows in each bar the percentage of such HELOCs that end their draw period in each of the years from 2005 to 2024, with the percentage of them that have negative equity in green, barely positive (0-10%) equity in red, and more than 10% equity in blue shown within each bar…as the callouts within the graphic note, less than 8% of HELOCs have reached the end of their draw to date, and it’s clear the majority of them will be coming due over the next three years, incurring an average $262 per month increase in monthly payments each…BKFS also notes that of those that end their draw over the next five years, 17% have negative equity, and 12% have less than 10% equity…this is a concern because previous studies have indicated that those with little or negative equity are more likely to default on their mortgages and hence end up in foreclosure than those with a large equity stake…

September 2014 LPS HELOCs amortization dates

once again, we’ll include the Mortgage Monitor table showing the monthly count of active home mortgage loans and their delinquency status, which comes from page 28 of the pdf….the columns here show the total active mortgage loan count nationally for each month given, number of mortgages that were delinquent by more than 90 days but not yet in foreclosure, the monthly count of those mortgages that are in the foreclosure process (FC), the total non-current mortgages, including those that just missed one or two payments, and then the number of foreclosure starts for each month shown going back to January 2008….in the last two columns, we see the average length of time that those who have been more than 90 days delinquent have remained in their homes without foreclosure, and then the average number of days those in foreclosure have been stuck in that process because of the lengthy foreclosure pipelines…notice that although the average length of delinquency for those who have been more than 90 days delinquent without foreclosure has remained nearly steady and is now at 492 days, the average time for those who’ve been in foreclosure without a resolution has lengthened to a record average 1014 days… 

September 2014 LPS FC & delinquent loan count table 2

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

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November 8 graphics

nonfarm payrolls:

October 2014 payroll jobs

household survey metrics:

October 2014 household survey metrics

trade deficit via McBride:

September 2014 trade deficit via McBride

mortgage monitor data summary:

September 2014 LPS data summary

new & repeat foreclosures:

September 2014 LPS new and repeat foreclosures

loan count buckets:

September 2014 LPS loan count buckets bar graph

% home equity:

September 2014 LPS home equity bar graph

HELOC’s amortization dates:

September 2014 LPS HELOCs amortization dates

non-current by state table:

September 2014 LPS non current state table

foreclosure & delinquent buckets:

September 2014 LPS FC & delinquent loan count table 2

foreclosure & delinquent buckets table excerpt:

September 2014 LPS FC & delinquent loan count table 2

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