It looks like the H-1B visa cap will not be hit this year, due to low demand for new hires.
I would that now is a good time to contact Congressmen, and tell them that there should be more restrictions, such as increased fees, and possibly a reduced quota, along with stricter enforcement.
Obviously, as an engineer, I am a member of a field where the importation of talent lowers the wages for everyone in the field, so I find the program to be less than salutary overall.
Employment Chart H/t Calculated Risk
Home Vacancy, Home Ownership Rates, and Rental Vacancy Rates Also Courtesy of Calculated Risk
Some Improvement on Homeowner Vacancy Rates
Note that the Rental Vacancy Rate is an All Time High
Thursday is the new jobless day, and new unemployment claims were basically flat, falling from 531,000 initial claims to 530,000. The 4 week moving average, a generally better metric, was down to 526,250, from the previous week’s 532,250, and continuing claims fell to 5,797,000 down 148,000 from last week’s 5,945,000.
All in all, generally good news.
Additionally, US GDP increased at a 3.5% annual rate in the 3rd, which is a solid, though not stellar, growth rate.
By way of example, the recovery in the early 1980s was around 7% for a full year.
There is also the question about how much of this was driven by cash for clunkers driven auto sales, and the first time home buyer’s tax credit.
The former has expired, and the is due to expire, though I would only give it a 1:2 chance that Congress won’t renew it.
In any case, the 30-year fixed mortgage was basically flat this week.
The market’s reaction to the GDP news was as expected.
There was movement from safety to higher rates of return, which drove US Treasuries down, and their yields up, and the Dollar fell.
Anticipation of a recovery also drove oil higher, to back above $80/bbl.
People who got laid off from Boeing have better mental health than those who remained:
Would it surprise you to learn that survivors can suffer just as much, if not more, than colleagues who get laid off? It certainly surprised a team of academic researchers who embedded themselves at Boeing (BA) from 1996 to 2006, a tumultuous decade during which the company laid off tens of thousands. The results of the study will appear next year in a Yale University Press book called Turbulence: Boeing and the State of American Workers and Managers. “How much better off the laid-off were was stunning and shocking to us,” says Sarah Moore, a University of Puget Sound industrial psychology professor who is one of the book’s four authors. “So much of the literature talks about how dreadful unemployment is.”
…
In the greatest surprise of all, the researchers discovered that the people who had been laid off often were happier than those left behind. Many had new jobs, even if they didn’t always pay as well. Over and over, Moore says, average depression scores were nearly twice as great for those who stayed with Boeing vs. those who left. The laid-off were less likely to binge drink, often slept better, and had fewer chronic health problems.
(emphasis mine)
Boeing is claiming that morale has improved since they got the new company president it, but I kind of doubt that.
BTW, this kind of morale is one of the reasons that they are having the problems that they are having with the 787: When you outsource basic engineering to another firm, people in your firm, don’t make the extra effort to examine things that look funny to them.
I went to a job fair today down in Rockville, MD.
I have never gotten a lead from going to a job fair, and I don’t expect one now, but I wanted to get some practice in “meet and greet”.
I did get some schwag*, a bottle opener and a 1 liter drinking bottle, but I don’t expect anything else.
45 minutes talking with a dozen or so firms and handing out resumes, and an hour there and back…Time that I will never get back.
*Some people claim that the term is swag, and that schwag is reserved for skanky and low quality weed.
Scary Picture of the Day:
Commercial Mortgage Back Security Amounts by Maturity Date
Or Maybe this is the Scary Picture, H/T Calculated Risk
Philadelphia Fed Index, State by State
Philadelphia Fed Index, Historical
As a Friday bonus, here is Barry Ritholtz, of The Big Picture schooling a blissfully ignorant ‘Phant Congressman on the Consumer Protection Agency:
Good news, everyone Existing home sales hit a two year high…Or maybe not…As Barry Ritholtz notes, there is an increase only when factoring seasonal adjustments, it fell otherwise, and those adjustments are problematic when under such circumstances.
Reinforcing Mr. Ritholtz’, and my, opinion of the state or real estate is the fact that Freddie Mac’s September delinquencies hit an all time high. (top graph)
More generally, we have the Philly Fed State Coincident Index continuing to show widespread weakness. (3rd and 4th graph down)
Also, we have the little employment tidbit that the
average unemployment period has hit 6 months, an all time high.
On the other side of the pond, UK GDP fell at twice the forecast rate, 0.4%, in the 3rd quarter.
Finally, both the dollar and the Pound Sterling rose against the Euro, and oil fell again, though it is still above $80/bbl.
Unemployment Chart Pr0n Courtesy Calculated Risk
Adjusted vs. Nonadjusted Claims Courtesy of J. Bradford DeLong
10 Year SA vs NSA, H/t The Reconstruction
It’s what Atrios calls “New Jobless Day,” and initial claims rose by 11K to a seasonally adjusted 531,000, but the 4-week moving average, which I consider to be a better metric, was basically flat, falling by 750 to 532,250, and continuing claims fell 98K to 5.92 million.
BTW, look at the graphs of the seasonally adjusted vs the non-seasonally adjusted numbers on the right.
I’m not sure how well the adjustments work in the current crisis, but it does smooth out the numbers somewhat, but you can clearly see some artifacts, January 2009, of the adjustments.
It’s even clearer in the bottom graph which goes back 10 years: Seasonal adjustment generally works, except when it doesn’t.
There is a potential cloud on the horizon from China, where authorities are starting to talk about reducing their economic stimulus package because of inflation concerns.
There is a possibility that a reduction in stimulus may have an oversize effect, particularly since official Chinese economic numbers are pretty Mickey Mouse.
If this is the case, it might put a further crimp in world trade.
In any case, the Conference Board’s Index of Leading Economic Indicators rose for the 6th straight month in September.
Calculated Risk: Apartment Rents “Plunge” in the West: also means that house prices have to fall to get back in line with rent to own ratios
In any case, the unemployment numbers drove oil prices down slightly, to $81.19/bbl, and the dollar strengthened slightly vs the Euro and yen.
Unemployment by State, h/t Calculated Risk
Architectural Billings Index, h/t Calculated Risk
Permanent Layoffs, h/t macroblog, which led Calculated risk to note that that it’s not a jobless recovery, it’s a “job-loss” recovery
The Federal Reserve’s Beige Book, a collection of “anecdotal” data (it’s really more than “anecdotal”, but you know economists) about the economy, was released today, and it shows that the economy is stabilizing, with that data showing either flat, or slight upticks, in economic activity.
We also got the state by state unemployment report for September, and it is ugly. (see bottom pic)
In real estate, mortgage applications fell sharply on higher rates, and the Architectural Billings Index rose, but remained below 50, indicating further contraction in nonresidential construction
The news in the Far East was pretty good though, with the decline in Japanese exports slowing to a 10-month best, and China’s GDP growing by 8.9% year over year, though Chinese statistics are always somewhat suspect.
In energy, oil rose to a 1-year high, $81.37/bbl, and the dollar weakened to a 14 month low, hitting $1.5014:€1.0000, so the buck and a half barrier is broken again.
It’s German, but it has been dubbed into English, but it was clearly inspired by the works of Sam Peckinpah.
Sick, sick, sick.
The growth in people who cannot find a full time job, and who are surviving on part time jobs, is the worst in 40 years.
Remember, however, when you look at U3, what the press normally represents as “unemployment”, these folks are not counted.
Unemployment Numbers, Actual v. Seasonably Adjusted
Philly Fed Graph Pr0n Courtesy Calculated Risk
NY Fed Graph Pr0n Courtesy The Bonddad Blog
So, Seasonally adjusted first time unemployment claims fell to 514,000, the lowest level since January, the 4 week moving average fell by 9K to 531,500, and continuing claims fell 75K to 5.99 million, the first time that the number has been below 6 million in 6 months.
Well, sort of anyway. As Brad Delong notes, the non-seasonally adjusted number actually went up:
Unemployment Insurance claims rose from 452,000 last week to 504,000 this week, but the seasonal adjustment factor fell from +72,000 to +10,000, leaving seasonally-adjusted claims falling from 524,000 to 514,000.
Considering the strangeness of the times that we are currently going through, this does mean that the SA numbers have a bit of flakiness.
Still these numbers, as well as the New York and Philadelphia Federal Reserve activity indices are definitely trending better.
The reason that I think that this is a pause, rather than a recovery, is because the underlying problems remain unresolved, with foreclosures hitting an all time high in the 3rd quarter.
About 1 out of 136 homes got a foreclosure notice in the past quarter.
That along with the fact that the CPI numbers are showing that “Owners’ Equivalent Rent” is falling, which implies that home prices have even farther to fall before the rent/own ratio is back to where it should be imply to me that the real estate crash is still on the down slope.
Additionally, it’s clear that consumers are still stretched, with Capital One credit card defaults rising in September.
30 year fixed mortgage rates remain below 5%, though they are up a bit this week.
In energy, oil is now at a 2009 high, and in currency, the
dollar rose against the Yen, but fell against the Pound Sterling and Euro.
Houston, we have a problem.
And job recoveries are progressively slower too
This is kind of a wonky bit about employment statistics in the US, and how a statistical tool, the birth death adjustment, may not be a reasonable way of looking at employment in the United states, and now New York Times columnist Floyd Norris is taking note of the fact that job losses in 2008 are now understood to be far greater than originally reported at the time:
It now appears that during the first half of 2008, when the recession was getting under way, job losses averaged 146,000 per month. That is nearly three times the average of 49,000 jobs shown in the initial estimates.
How did the government get it so wrong?
(emphasis mine)
The answer is very simple, a statistical correction called the “birth-death adjustment”, which is about birth and death of new businesses, rather than the birth and death of people, and it, “factors in jobs assumed to have been created by employers who are too new to have been included in the survey, and subtracts jobs from employers assumed to have failed and therefore not responded to the latest survey”.
You see, under George W. Bush and His Evil Minions™, the birth-death adjustment was massively expanded, just in time to create for the 2004 election. So there are a number of reasons for this:
As the top graph shows, something is truly whack here.
Unfortunately, I don’t see this being fixed in the foreseeable future, becausethere is no advantage for Obama/Geithner/Summers to start using more accurate, and hence scarier, numbers.
H/t Barry Ritholtz.
OK, so I posted my resume on CareerBuilder.com™, and it seems like every 3-4 days, I gett a call from some drone at Aflac™, I got three calls yesterday, trying to get me to sell insurance.
Let’s be clear: I don’t want to sell Insurance, Amway, or Girl Scout Cookies, I want work as a mechanical engineer.
Of course, they are all different franchises, so some new drone keeps calling, and my telling that drone not to call doesn’t stop the other folks.
Unfortunately, CareerBuilder.com™ does not have the capability of blocking specific employers, probably because jerks generate too much revenue, so my options are to make my resume private, which means that no one sees my resume, or for me to start filing FCC complaints.
When the revolution comes, it’s going to be telemarketers up against the wall.
Fall in employment participation at post Great Depression high
U3 to U6
So, we have the numbers for September today, and they really suck.
The non-farm payrolls fell by 263,000 in September, well above the consensus estimate of 175,000, and the unemployment rate (U3) went from 9.7% to 9.8%.
Additionally, the numbers for factory orders fell in August, as did non defense capital goods, durable goods, and manufacturing inventories fell by for the 12th straight month.
Unless you are a banker, or Obama’s economic team, this is not a recovery.
Kevin Drum, citing Brad Delong and Andrew Samwick, note that workforce participation has fallen further than at any time since the Great Depression.
The numbers, peak to trough declines in workforce participation.
This is just really scary stuff, particularly when, like me, you are looking for a job.
Where he will spill his guts on the coercion by Hank Paulson and Ben Bernanke on the Merrill Lynch deal, but for now the news that Ken Lewis is stepping down as CEO of Bank of America is, as the punchline about lawyers* says, “A good start.”
*Q: What do you call 5000 dead lawyers at the bottom of the ocean?
A: A good start!
Unemployment Graph Pr0n Courtesy of Calculated Risk
Exhaustion Rate Graph Pr0n Courtesy of zero hedge
Initial claims for unemployment fell this week again, down 21K to 530K, but that’s because unemployment claims from last week were revised to 551. The first count was 545K, so the apples to apples delta is 15K, not 21K (I love how it always seems to work out this way).
The 4 week moving average fell too, 553.5K, down from 546.5K, and continuing claims fell 123K, to 6.138m from last weeks 6,261m.
Note, however, that continuing claims do not count folks who are on extended benefits, or who have exhausted benefits, and that the exhaustion rate has hit a new record, with 52.40% of all people filing for unemployment exhausting their benefits before they find another job.
In real estate, existing home sales fell for the first time in 5 months, and we are hearing dire warnings about a shadow inventory of 7 million foreclosures which have yet to hit the market, either because the lenders are hip deep in foreclosures, and the process is proceeding slowly, or because they are holding off to avoid selling into a down market.
The down housing market has been good for treasuries, with prices rising, and yields falling, as people flock to their relative safety.
The quest for safety has investors running back to dollars, driving the greenback up, and pushing oil down below $66/bbl (!).
Someone is not believing in recovery here.
If This Doesn’t Make You Feel Like a Chump, then You are forgetting the “Ownership Economy” HypeWell, it’s Thursday, and that means that it’s new jobless claims day.
We are actually in a place where we can see the seasonally adjusted statistics have meaning, because we are past the auto plant shutdown in the dog days of Summer that actually happened in the spring.
Initial claims were 545,000, down 12,000 from last week’s upwardly revised 557,000, a drop of 12,000, but remember that if we compare initial numbers to initial numbers, we were at 550,000 last week, so the drop is only 5,000, not 12,000…..Anyone see a pattern?
The 4 week moving average, which is a less noisy metric, fell from 8,750 to 563,000, but note that anything at 400K or above is still bad news territory.
Continuing claims rose by 129K to 6.2 million, and that does not account for people who are exhausting their benefits.
As CR notes (link on graph pr0n) the fed has reported that household net worth has fallen $12.2 trillion, or about $40,000.00 for every man woman and child in the United States.
Of course the financial journalist are reporting that household net worth is up for the first time since Q3 of 2007, but this is almost entirely the recent bump in stock prices, which primarily benefits the top decile.
Still, we are seeing good news, with housing starts and the Philadelphia Fed Manufacturing Index both showing improvement.
Of course, part of this has to do with the fact that mortgage rates are way down, because the Federal Reserve is buying mortgage backed securities like they are going out of style, in order to keep those rates low.
I would also note that there just are not that many consumers out there. The UK again being a case in point. Yesterday, I mentioned that their unemployment had spiked, and today we discover that their retail sales fell 0.2%, as opposed to the forecast increase of o.1%.
People without jobs cannot buy stuff.
That’s why the Bank of Japan decided to keep its benchmark rate at essentially 0%, actually 0.1%, but that’s a f%$#ing rounding error.
In energy, oil fell slightly, to 72.47/bbl.
In currency, the dollar took a hit today, falling against both the Euro and yen, and the Canadian dollar rose to an 11 month high.
Home Builder Confidence
Industrial Production Utilization
Well, we got the inflation numbers in, the CPI rose 0.4% in August and fell 1.5% year over year.
I’m not sure whether to call this a sign of recovery (mild inflation) or of further problems (deflation).
I’d be tempted to go with the former, as both builder confidence and industrial production capacity utilization increased this past month (see pics), but that is from horribly low levels, and objectively, the levels are still horrible.
With UK unemployment hitting the highest level since 1996, would appear to cut the on the down side.
Mortgage applications fell last week, though some of that may come from the 4 day week because of labor day, and they are still well above the trough, though one wonders how long that will last once the tax credit for first time home buyers expires. (More on that later)
In energy, oil rose above $72/bbl on falling inventories.
Currency is getting interesting though, with the dollar falling to a 1 year low, largely on increases in optimism on the economy, but gold hit the highest level since March, 2008 $1,017.65/oz (Troy), and gold generally rises in times of pessimism and uncertainty?
Unemployment Chart Pr0n Courtesy Calculated RiskWell, we have the initial unemployment claims out now (government link), and it appears to point to improvement. Initial claims were 550,000, a decrease of 26,000 from the revised figure of 576,000 (but the initial figure was 570,000, so the drop is 20K, not 26K apples to apples), the 4 week moving average was 570,000, down from 572,250, and the continuing claims number(seasonally adjusted) was 6,088,000, down 159,000 from last week’s revised level of 6,247,000 (only continuing claims were revised up from 6.23m, so the apples to apples drop is actually 142K, not 159K).
Anyone else knowing a pattern in revision numbers, or is it just me?
BTW, note that the continuing claims number drops as people lose benefits or move to emergency unemployment claims.
In any case, with foreclosures up 18% year over year, and poverty rate hitting an 11 year high, 13.2%, things really don’t indicate a rapid improvement.
The weekly claims number needs to be below 400K before we will start seeing increases in employment.
Additionally, we have a leading indicator in Japan, machinery (capital) orders are in the toilet, with orders being the lowest since the start of the survey in 1987.
I’d also stay out of the stock market, as insiders selling continuing to go crazy, and when people sell their own stocks it’s because they know something, even if this knowledge is not sufficient to trigger an criminal or civil investigation.
In the world of central banking, the Bank of England is leaving its benchmark unchanged, and continuing with bond purchases (quantitative easing).
Bonds did fairly well today, with the yields on mortgage backed bonds and US treasuries prices rising, which means that the yields are falling………Unless, of course, you are talking about Polish government bonds, which look to be heading into the world of hurt that their Baltic Republic neighbors are feeling.
Meanwhile, a week inventory report has pushed crude oil up, and the US dollar was up marginally, though whether this is a turn, or just a breather, is unclear.
Retail Employment Courtesy of Calculated Risk
Temp hire numbers courtesy Bloomberg
Click for full size pic
So, let’s start with employment today, shall we?
We have Manpower’s latest survey of hiring intentions for US companies, which are best described as “sluggish,” with the seasonally adjusted employment outlook for the US being the weakest since Manpower began its survey, in 1962.
On the other side it appears that retail hiring is showing some signs of picking up, but holiday retail employment was pretty beaten down in 2008 anyway. (See top picture)
Also, it appears that US companies are still cutting temporary employees from their payrolls, (bottom pic) and temps tend to be both the first in the door, and the first out the door.*
On Europe, we are getting conflicting signals, with consumer confidence in the U.K. hitting its highest level since May, 2008, but German industrial output falling in July, production rose 0.8% in June, but fell 0.9% in July, against a consensus estimate of a gain of 1.6%….Ouch.
The intersection of banking and consumers in the US ain’t doing well, with U.S. consumer credit falling at a 10% annual rate, or $21.6 billion, and Standard & Poor’s noting that despite a slight improvement in July, it expects credit card write-offs to continue to increase.
Meanwhile if you follow the stock market, perhaps you should listen to Warren Buffett:
Mr. Buffett declined to predict the short-run course of the stock market. But corporate data from Berkshire shows his company was selling more stocks than it was buying by the end of the second quarter, according to Bloomberg News. Its spending on stocks fell to the lowest level in more than five years, although the company is still deftly picking up shares in some companies and buying corporate and government debt.
(emphasis mine)
So he is moving out of stock, and getting completely out of Moody’s. (more on that in another post.)
Meanwhile, we have some gold bug news, with gold topping $1000.00/oz (troy).
In related news, the value of the dollar and gold tend to be inversely related, the dollar fell to its lowest level vs. the Euro this year, $1.4491:€1.0000.
We also saw this pushing up the price of oil today, up 4.5% to $71.10/bbl.
*Something I am all too familiar with, having done contract technical work for the past 17 years.
Employment-population ratio, part time for economic reasons, and hours worked economic graph pr0n courtesy of Calculated RiskThe employment numbers are out, and you can look at the cup as half empty or half full, with non farm payroll falling by 217K, but unemployment (U3) spiking to 9.7%.
Note that the drop was less than the 276K in July (up from 246K following revisions), U6, the broadest measure of unemployment, and the one closest to the Depression era metric,* spiked to 16.8%.
Other than that, there was not a whole bunch of news, priobably because the upcoming Labor Day holiday, though Treasuries fell, and their yields rose, as a result of the job numbers, which also drove oil and the US dollar up, so the markets considered all this generally good news.
Minor, as I write this though, the FDIC bank closing page does not have any closings yet.
Normally, they like to move on 3 day weekends, it gives them more times to get things done.
*Though still more conservative than the 1930s version, so we are getting very close to the 25% rate at the height of the Depression.