February job openings, consumer credit, wholesale sales & inventories, and Mortgage Monitor

  there were just a few minor government economic releases this week; the Wholesale Trade Sales and Inventories report for February from the Census, and the import and export price index for March and the February Job Openings and Labor Turnover Survey, both from the BLS, and the G-19 on consumer credit from the Fed…in addition, the Institute for Supply Management (ISM) released it’s March Non-Manufacturing Report On Business, wherein their NMI (non-manufacturing index) printed at 56.5 percent in March, down from the February reading of 56.9 percent, still indicating that a plurality of the managers surveyed saw expansion in the various facets of their business…and the week also saw the release of the February Mortgage Monitor from Black Knight Financial Services, formerly LPS, which gave us a few new graphics to look at…

February Job Openings at 14 Year High

the February Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 168,000 to 5,133,000 at the end of February, the most openings in any month since January 2001…job openings as a percentage of the employed labor force rose to 3.5% from 3.4% in January, and up from 2.9% in February a year ago…the increase in openings was widespread among industries, with the 37,000 new jobs in accommodation and food services topping the list…like most BLS releases, the press release for report is very readable and also refers us to the associated table for the data cited, linked at the end of the release…thus in Table 1. Job openings levels and rates by industry and region, where we also see that the entire increase in job openings was in the Midwest and West, while job openings in the South declined…

this 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 includes retirements and deaths….in February, seasonally adjusted new hires totaled 4,916,000, down 78,000 from the 4,994,000 hired or rehired in January, as the hiring rate as a percentage of all employed remained unchanged at 3.5%, but was up from the 3.4% hiring rate in February a year earlier…..total separations also fell, from 4,834,000 in January to 4,650,000 in February, as the separations rate as a percentage of the employed fell from 3.4% to 3.3%, but was unchanged from a year ago…subtracting the 4,650,000 total separations from the total hires of 4,916,000 would imply an increase of 266,000 jobs in February, virtually equal to the revised payroll job increase of 264,000 for February reported by the BLS establishment survey last week

breaking down the seasonally adjusted job separations, the BLS finds that 2,687,000 quit their jobs in February, down from the revised 2,779,000 who quit their jobs in January, while the quits rate, widely watched as an indicator of worker confidence, fell from 2.0% to 1.9% of total employment…..in addition to those who quit, another 1,591,000 were either laid off, fired or otherwise discharged in February, down from the 1,722,000 discharges in January, which also lowered the discharges rate from 1.2% to 1.1% of all those who were employed during the month….meanwhile, other separations, which includes retirement and death, were at 373,000 in February, up from 333,000 in January, for an ‘other separations’ rate of 0.3%, which was unchanged…both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release

February Credit Card Balances Decline on Lower Gas Prices

the Fed’s G.19 Release on Consumer Credit for September indicated that total seasonally adjusted consumer credit outstanding increased by $15.52 billion to $3,343.4 billion, or at a 5.6% annual rate… the revolving credit portion of the aggregate, which would mostly be credit card debt, fell by $3.7 billion, or at a 5.0% annual rate, to $884.8 billion, the greatest drop in four years, while non-revolving credit, which includes loans for cars and college tuition but not borrowing for real estate, rose at by $19.2 billion to $2,458.6 billion, an annual growth rate of 9.4%….the increase in credit outstanding for January was revised lower, from the initially estimated $11.56  billion increase to an increase of $10.8 billion, with revolving credit falling at a 1.4% rate in that month too…although the financial press reports this as a pull back on credit card debt, it more than likely simply reflects lower prices for gasoline and hence smaller monthly balances for the majority of consumers who buy gas with credit cards…

February Wholesale Sales Down 0.2%, Wholesale Inventories Up 0.3%

for the third month in a row, the Wholesale Trade, Sales and Inventories Report (pdf) from the Census Bureau indicated that wholesales sales fell in February from the prior month, but unlike December and January, when falling prices for oil related products were the major factor, February saw wholesale price increases for refined products, while the largest decreases in wholesale sales were in the durable goods categories…seasonally adjusted sales of wholesale merchants were estimated at $444.2 billion in February, down 0.2 percent (+/-0.5%) from the revised January level and down 1.5 percent (+/-1.2%) from the wholesale sales of February last year….moreover, the January preliminary estimate was revised downward $1.6 billion or 0.3 percent, and sales are now indicated as a seasonally adjusted 3.6% lower than December, with January’s wholesale sales of durable goods down 2.1% and wholesale sales of nondurable goods excluding petroleum products down 2.2%…for February, wholesale sales of durable goods fell by 2.4 percent (+/-0.7%) from January, but were up 3.5 percent (+/-1.2%) from a year ago, with sales of electrical and electronic goods down 5.0% and only hardware, plumbing and heating equipment seeing an increase in February…meanwhile, wholesale sales of nondurable goods were up 1.9 percent (+/-0.7%) from January, but were down 5.8 percent (+/-1.6%) from last February, as petroleum and petroleum products were up 5.5%, largely on higher prices and sales of drugs and druggists’ sundries were up 4.0% despite fairly stable wholesale prices

this release also reported that seasonally adjusted wholesale inventories were valued at $574.0 billion at the end of February, 0.3% (+/-0.4%)* higher than the revised January level and 6.1% (+/-1.2%) above last February’s level, while January’s preliminary inventory estimate was upward by $1.0 billion or 0.2% and thus 0.4% higher than December…wholesale durable goods inventories were up 0.3 percent (+/-0.5%)  from January and up 7.6 percent (+/-1.6%) from a year earlier, as wholesale automotive inventories rose 2.4% and are now 12.6% above a year ago….inventories of nondurable goods were up 0.2% (+/-0.4%)* from January and were 3.8 percent (+/-1.6%) higher than last February, as wholesale inventories of petroleum and petroleum products were up 2.4% while inventories of chemicals and allied products were down 2.9%…the closely watched inventory to sales ratio of merchant wholesalers was unchanged at 1.29, and although it was up from the inventory to sales ratio of 1.20 in February of last year, that was a time when the higher sales of petroleum products vis a vis inventories counted as a much larger percentage of the overall ratio..  

Average Delinquency in Foreclosure Slips to 1,002 Days; 52% Have Been Delinquent More Than 2 Years

according to the Mortgage Monitor for February (pdf) from Black Knight Financial Services (BKFS, formerly LPS Data & Analytics), there were 799,956 home mortgages, or 1.58% of all mortgages outstanding, remaining in the foreclosure process at the end of February, which was down from  814,513, or 1.61% of all active loans that were in foreclosure at the end of January, and down from 2.22% of all mortgages that were in foreclosure in February of last year…these are homeowners who had a foreclosure notice served but whose homes had not yet been seized, and February saw this so-called “foreclosure inventory” drop below 800,000 in February for the first time since late 2007…new foreclosure starts also fell in February to 79,740, from 94,347 in January, the lowest since 78,796 foreclosures were started in April a year ago and below the 99,193 foreclosures that were started in February of last year…

in addition to homes in foreclosure, February BKFS data showed that 5.36% of all mortgages, or 2,712,538 mortgage loans, were at least one mortgage payment overdue but not in foreclosure, down from 5.56% of homeowners with a mortgage who were more than 30 days behind in January, and down from the mortgage delinquency rate of 5.97% a year earlier…of those who were delinquent in February, 1,067,411 home owners, or 2.11% of those with a mortgage, 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 6.94% of homeowners with a mortgage were either late in paying or in foreclosure at the end of January, and 3.79% of them were in serious trouble, ie, either “seriously delinquent” or already in foreclosure at month end…

the first graph below, from page 5 of the Mortgage Monitor, shows the history of the mortgage crisis, including the aforementioned foreclosure inventory and percentage of delinquent mortgages, since the beginning of 2003…the percentage of mortgages that were in the foreclosure process monthly over that period is shown in green, the percentage of active home loans that were delinquent but not in foreclosure over the same period is shown in red, and the total of both, representing total percentage of mortgages that were in some kind of mortgage trouble each month, is shown in blue over the same period…we can see that the percentage of homes in foreclosure in green has been falling fairly steadily over the past three years and at 1.58% in February is now well below the October 2011 peak of 4.30% of mortgages in the foreclosure process…but notice that’s still more than 175% over the pre-crisis foreclosure inventory as noted in the callout on the graph, so the percentage of homes in foreclosure is still a long way from normal …similarly, with delinquent mortgages shown in red at 5.36% of all mortgage outstanding in February is down to nearly half of the 10.57% of all mortgages that were delinquent but not in foreclosure at the peak of the mortgage crisis in January of 2010, but still 17% above the pre-crisis mortgage delinquency percentage as noted on the graph..thus the total percentage of all non-current mortgages as shown at 6.94% in blue is well below the peak of 14.36% percent that were non-current logged in January of 2010, when more than 1 out of 7 mortgages were in trouble, but it’s still well above the 4.71% average who were in some mortgage trouble in December 2005, well before the crisis took hold…

February 2015 LPS delinquent and foreclosure history

while the total count of mortgages that are in trouble has been declining, the average length of time that those who are in trouble have been there remains elevated…the next graph below, from page 6 of the mortgage monitor, shows for each month since 2005 the average number of days that new foreclosure starts have been delinquent in green, the average number of days that seriously delinquent mortgages (90+) have been  delinquent in violet, and the average number of days those homes in the foreclosure inventory have been delinquent in red…while the average number of days delinquent for a loan in the foreclosure process has declined to 1,004 from a high of 1,024 in October, the average number of days delinquent for loans 90 or more days delinquent has risen to 531 days, after declining to 490 in October…BKFS suggests this may be due to homes previously in foreclosure shifting back to a seriously delinquent status, possibly after a mortgage modification….they also note that as of the end of February, over 52% of homes in foreclosure had been delinquent for more that 2 years…

February 2015 LPS days as delinquent and in foreclosure inventory

the last graph we’ll look at from this month’s report, from page 12 of the pdf, shows the 15 states with the highest percentage of distressed sales in 2014…generally, these include short sales by a delinquent homeowner that are agreed to by mortgage holder as a resolution in lieu of foreclosure, or the sale of a previously foreclosed home from the bank’s inventory of same (NB: this is not a “foreclosure sale”, which is the confusing mortgage industry term for the auction that completes the foreclosure and transfers the title to the bank’s REO (real estate owned) portfolio)…while 12.7% of home sales in 2014 were distressed, down from 17% of all sales in 2013, the lion’s share of them were concentrated in just a handful of states, with Florida, California, Illinois and Michigan accounting for over half of all such transactions in 2014…the bar graph below shows that distressed sales accounted for 24.7% of real estate transactions in Florida, 20.3% of sales in Illinois, 19.0% of sales in Nevada, 16.5% of sales in Maryland, 14.4% of sales in Connecticut, 13.9% in Michigan, 13.8% in Georgia, and 13.5% of home sales in Kentucky…by itself, Florida accounted for 26 percent of all distressed sales in the U.S.

February 2015 LPS states with highest distressed sales

(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, most from the aforementioned GGO posts, contact me…)

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