Here is an interesting resource from Google: a href=”http://www.google.com/finance/domestic_trends”Domestic Trends/a. (ht Brian) Google is tracking search trends for several specific sectors of the economy.br /br /As an example, below is a screen capture of the a href=”http://www.google.com/finance?q=GOOGLEINDEX_US:AUTOBY”Auto Buyers Index/a. br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=1130,height=570,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://2.bp.blogspot.com/_pMscxxELHEg/SqaKim1j_ZI/AAAAAAAAGUA/cZQVPKOE_SI/s1600-h/GoogleAutoBuyers.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Google Auto Buyers Index” src=”http://2.bp.blogspot.com/_pMscxxELHEg/SqaKim1j_ZI/AAAAAAAAGUA/cZQVPKOE_SI/s320/GoogleAutoBuyers.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/ibr /br /This shows the seasonality of car buying, plus the Cash-for-clunkers surge in searches. Click on a href=”http://www.google.com/finance?q=GOOGLEINDEX_US:AUTOBY”link for interactive graph/a - you can also plot the data YoY.br /br /I also recommend a href=”http://www.google.com/finance?q=GOOGLEINDEX_US:RLEST”real estate/a, a href=”http://www.google.com/finance?q=GOOGLEINDEX_US:RENTAL”rental/a (still weak) and a href=”http://www.google.com/finance?q=GOOGLEINDEX_US:UNEMPL”unemployment/a.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-3582201009857891472?l=www.calculatedriskblog.com’//div

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A frequent question is how do the 570,000 initial strongweekly/strong unemployment claims, as a href=”http://www.workforcesecurity.doleta.gov/press/2009/090309.asp”reported/a by the Dept of Labor (DOL), correspond to the 216,000 in strongmonthly/strong job losses as a href=”http://www.bls.gov/news.release/empsit.nr0.htm”reported/a by the Bureau of Labor Statistics (BLS).br /br /If about 2.4 million people filed initial weekly claims in a month (570,000 X 4 weeks), how come the economy only lost 216 thousand net jobs in August?br /br /First, I think it is helpful to look at total hires and separations each month. The BLS has a survey called “a href=”http://www.bls.gov/news.release/jolts.htm”Job Openings and Labor Turnover Survey/a” (JOLTS) that provides this information. The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers.br /br /Note: Remember the CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people. See a href=”http://www.calculatedriskblog.com/2009/08/jobs-and-unemployment-rate.html”Jobs and the Unemployment Rate/a for a comparison of the two surveys.br /br /The following graph shows hires (Green Line), Quits (blue bars) and Layoff, Discharges and other (red bars) from the JOLTS. Red and blue added together equals total separations.br /br /Unfortunately this is a new series and only started in December 2000.br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=1210,height=860,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://2.bp.blogspot.com/_pMscxxELHEg/SqU9topoIbI/AAAAAAAAGT4/JmHMtTVXWT4/s1600-h/JOLTS.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Job Openings and Labor Turnover Survey ” src=”http://2.bp.blogspot.com/_pMscxxELHEg/SqU9topoIbI/AAAAAAAAGT4/JmHMtTVXWT4/s320/JOLTS.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/ibr /br /Notice that hires (green line) and separations (red and blue together) are pretty close each month. When the green line is above total separations, the economy is adding net jobs, when the green line is below total separations, the economy is losing net jobs.br /br /Although initial claims are for people and JOLTS is for positions, this does show why initial claims are so high. In the first six months of 2009, an average of about 2.8 million jobs were lost involuntarily each month. If all of these people applied for unemployment claims, the average initial weekly unemployment claims would have been about 650,000 per week (2.8 million divided by 4.3 weeks per month). In fact weekly claims averaged just over 600,000 per week for the first six months of 2009. Note: “quits” don’t receive unemployment insurance.br /br /So even though there were about 4.2 million new hires each month during the first six months of 2009, people who lose their jobs involuntarily during a recession have a difficult time finding a new job right away, and most apply for unemployment benefits.br /br /In better times, like 2005, about 2.26 million jobs were lost involuntarily each month, but weekly claims only averaged 330,000 per week (2.26 million divided by 4.3 week is 525,000). This shows when the economy is adding net jobs, a larger percentage of people can find new jobs right away and don’t apply for unemployment insurance. But many people still do file for benefits.br /br /Although we don’t have JOLTS data for the ’90s, even in the best of times for employment (like 1997), the U.S. averaged about 230 thousand initial unemployment claims per week - even though the economy added almost 3.4 million net jobs for the year. This just points out there is significant employment turnover in the U.S. economy, and many people lose their jobs involuntarily even in good times. br /br /Final Note: Since weekly initial unemployment claims are related to involuntary separations - and the overall strength of the job market (Can people find a job right away?), there is no magic formula between initial claims and net jobs. It does appear that initial weekly claims will have to fall to about 400,000 per week before the economy starts adding jobs, see from Brad DeLong: a href=”http://delong.typepad.com/sdj/2009/07/payroll-employment-starts-growing-when-seasonally-adjusted-unemployment-claims-fall-below-400k-per-week-or-so.html”Payroll Employment Starts Growing When Seasonally-Adjusted Unemployment Claims Fall Below 400K per Week or so…/adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-3641554132191979691?l=www.calculatedriskblog.com’//div

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Here is an update. See the a href=”http://www.calculatedriskblog.com/2009/08/housing-starts-and-unemployment-rate.html”post last month/a for much more discussion …br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=1170,height=740,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://3.bp.blogspot.com/_pMscxxELHEg/SqH1xlDlDUI/AAAAAAAAGTg/NswXdGKr_Qc/s1600-h/StartsUnemployment.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Housing Starts and Unemployment Rate” src=”http://3.bp.blogspot.com/_pMscxxELHEg/SqH1xlDlDUI/AAAAAAAAGTg/NswXdGKr_Qc/s320/StartsUnemployment.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/ibr /br /This graph shows housing starts (both total and single unit) and unemployment (stronginverted/strong).br /br /You can see both the correlaton and the lag. The lag is usually about 12 to 18 months, with peak correlation at a lag of 16 months for single unit starts. The 2001 recession was a business investment led recession, and the pattern didn’t hold.br /br /This suggests unemployment might peak in Spring 2010.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-3099388171963380973?l=www.calculatedriskblog.com’//div

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From the Mercury News: a href=”http://www.mercurynews.com/opinion/ci_13264603?nclick_check=1″Editorial: Congress should expand $8,000 home-buyer tax credit/a (ht ShortCourage) blockquote[I]t’s crucial that when Congress returns from recess next week, lawmakers extend the soon-to-expire credit through 2010. And if they want to bolster the fledgling recovery, they’ll expand eligibility. br /br /Though the credit has helped stabilize the housing market nationally, in the pricey Bay Area, it hasn’t been as helpful. … Lifting the income caps and expanding the credit to all buyers of primary residences would nudge existing homeowners to move up. That would open up more houses in the red-hot lower end of the market, where many first-time buyers have been outbid by investors paying cash.br /…br /The National Association of Home Builders estimates that expanding and extending the credit through 2010 would stronggenerate 500,000 additional sales … estimated to cost $30 billion …/strong/blockquote Do the math. $30 billion for an additional 500,000 sales equals $60,000 per house. Ouch.br /br /And forget the 500 thousand additional sales. The evidence suggests that interest is already waning (although there will be a flurry of activity at the end just like Cash-for-clunkers). My estimate is the program will cost taxpayers $100,000 per additional home sold. Not very efficient or effective.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-1260828641370109655?l=www.calculatedriskblog.com’//div

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Just another mention: the Atlanta Fed puts out an a href=”http://www.frbatlanta.org/invoke.cfm?objectid=6534288F-5056-9F12-12305C6C9A07BDC8method=display”Economic Highlights/a and a href=”http://www.frbatlanta.org/invoke.cfm?objectid=6536B228-5056-9F12-1273E49C2857CE4Cmethod=display”Financial Highlights/a every week. They highlight different data each week …br /br /The Federal Reserve a href=”http://www.federalreserve.gov/releases/h41/Current/”released/a the Factors Affecting Reserve Balances today. Total assets increased slightly to $2.119 trillion. This graph from the Atlanta Fed shows the breakdown in the assets (as of yesterday):br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=950,height=655,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://2.bp.blogspot.com/_pMscxxELHEg/SqArWZUi5eI/AAAAAAAAGSA/BbnOub6fGXg/s1600-h/FedAssetsSept09.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Federal Reserve Assets” src=”http://2.bp.blogspot.com/_pMscxxELHEg/SqArWZUi5eI/AAAAAAAAGSA/BbnOub6fGXg/s320/FedAssetsSept09.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/ibr /br /From the Atlanta Fed: blockquoteThe size of the Fed’s balance sheet has largely been flat since March, remaining within a range of $2 trillion to $2.2 trillion.br /br /li The overall size of the Fed’s balance sheet has been flat during the past few months, and the broad trends remain little changed. That is, the sizeable declines in short-term lending to financials and nonbank credit markets have largely been offset by increases in holdings of Treasury securities, mortgage-backed securities (MBS), and agency debt.br /br /li On Friday, the Federal Reserve Board announced a reduction for the two September TAF auctions, lowering both from $100 billion to $75 billion. The Board has cut the amounts available in the TAF auctions three times in $25 billion increments (from the program’s maximum of $150 billion, last available in June)./blockquotea onclick=”window.open(this.href, ‘_blank’, ‘width=955,height=705,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://3.bp.blogspot.com/_pMscxxELHEg/SqArWqKG9dI/AAAAAAAAGSI/p2qTSnk9MMQ/s1600-h/FedTreasuryPurchases.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Federal Reserve Treasury Purchases” src=”http://3.bp.blogspot.com/_pMscxxELHEg/SqArWqKG9dI/AAAAAAAAGSI/p2qTSnk9MMQ/s320/FedTreasuryPurchases.jpg” border=”0″ //aThe second graph shows a breakdown of Fed Treasury purchases by maturity. From the Atlanta Fed: blockquoteDecomposing the Fed’s purchases of Treasury securities by maturity shows a heavy focus in the four-to-seven-year and seven-to-10-year sectors, together making up half of all purchases so far.br /br /But the last four Treasury purchases have been focused elsewhere, with the biggest purchases in the shorter end of the yield curve.br /br /li The Fed has purchased a total of $276.4 billion of Treasury securities through September 2. Of the $271.8 billion in non-TIPS securities, the Fed has focused on the four-to-seven-year and seven-to-10-year sectors the most, purchasing approximately $65 billion in each (totaling about half of all purchases). br /br /li The two-to-three-year and three-to-four-year sectors have also received a fair amount of attention, especially following two large purchases in the last week and a half in each sector. Recently, the Fed purchased $6.1 billion in the two-to-three-year sector on August 24, $2.3 billion in the 17-to-30-year sector on August 26, and $5.6 billion in the three-to-four-year sector on September 1.br /br /li The FOMC statement released on Wednesday, August 12, said the Fed is “in the process of buying $300 billion of Treasury securities” by the end of October. This statement was an adjustment from previous statements that stated “up to” $300 billion in purchases would be made “by autumn.” /blockquoteThere is much more in the highlights. Enjoy.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-5106390279120182771?l=www.calculatedriskblog.com’//div

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The August 2009 Manufacturing ISM a href=”http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942″report/a showed expansion, but the non-manufacturing sector was still contracting in August. br /br /From the Institute for Supply Management: a href=”http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943″August 2009 Non-Manufacturing ISM Report On Business®/a blockquotestrongEconomic activity in the non-manufacturing sector contracted in August/strong, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.br /br /… “The NMI (Non-Manufacturing Index) registered 48.4 percent in August, 2 percentage points higher than the 46.4 percent registered in July, indicating strongcontraction in the non-manufacturing sector for the 11th consecutive month but at a slower rate/strong. The Non-Manufacturing Business Activity Index increased 5.2 percentage points to 51.3 percent. This is the first time this index has reflected growth since September 2008. The New Orders Index increased 1.8 percentage points to 49.9 percent, and the Employment Index increased 2 percentage points to 43.5 percent. The Prices Index increased 21.8 percentage points to 63.1 percent in August, indicating a substantial increase in prices paid from July. According to the NMI, six non-manufacturing industries reported growth in August. Respondents’ comments are mixed about business conditions and the overall economy; however, strongthere is an increase in comments indicating that there are signs of improvement going forward/strong.”br /span style=”font-size:78%;”emphasis added/span/blockquoteThe service sector was still contracting in August, although contracting at a slightly slower pace than in July.br /br /No recovery yet in the service sector …div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-1578281345703396556?l=www.calculatedriskblog.com’//div

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Remember all the half off sales? It is getting worse …br /br /From the WSJ: a href=”http://online.wsj.com/article/SB125185523668478151.html”Hotel, 68% Off /a (ht James) blockquoteFirst Banks Inc. … recently hired Atlas Hospitality Group to find buyers for the 179-room Lexington Plaza Waterfront Hotel. The asking price is nearly $19 million, just a third of the $58.4 million in debt, contractors’ liens and unpaid taxes on the property.br /…br /The report from the property’s court-appointed receiver in May, the latest available, pegged the hotel’s occupancy at 25%./blockquote Twenty five percent? Can they even afford to pay their utility bills?br /br /And in Hawaii: a href=”http://online.wsj.com/article/SB125184127414577413.html”Maui Prince Hotel Faces Foreclosure/a blockquoteMortgage-holders led by Wells Fargo Bank sued last week to foreclose on the 310-room [Maui Prince Hotel], following the owners’ failure to pay the resort’s $192.5 million mortgage when it came due in July. The foreclosure threatens to wipe out the $227.5 million in mezzanine debt held by a UBS fund and the $250 million in equity that Morgan Stanley and its partners put into the property./blockquote When the occupancy rates fall far enough, forget about paying the debt - worry about meeting payroll. A quote from the article: blockquote”We do not have funding for payroll, but we are getting some funding for our accounts payable and basic operating expenses,” said Donn Takahashi, president of Prince Resorts Hawaii … “We cannot operate a top-notch resort in this fashion.”/blockquote I suspect we will see many more stories like these two.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-324205486160016162?l=www.calculatedriskblog.com’//div

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a onclick=”window.open(this.href, ‘_blank’, ‘width=1200,height=740,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://1.bp.blogspot.com/_pMscxxELHEg/Sp18_2-SANI/AAAAAAAAGRY/doQeefWj0hE/s1600-h/AutoAug2.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Vehicle Sales” src=”http://1.bp.blogspot.com/_pMscxxELHEg/Sp18_2-SANI/AAAAAAAAGRY/doQeefWj0hE/s320/AutoAug2.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/ibr /br /This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for August (red, light vehicle sales of 14.09 million SAAR from AutoData Corp).br /br /This is the highest vehicle sales since May 2008 (14.23 million SAAR).br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=1200,height=760,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://4.bp.blogspot.com/_pMscxxELHEg/Sp18_vKGFcI/AAAAAAAAGRQ/M4vyOV5f_WA/s1600-h/AutoAug1.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: right; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Vehicle Sales” src=”http://4.bp.blogspot.com/_pMscxxELHEg/Sp18_vKGFcI/AAAAAAAAGRQ/M4vyOV5f_WA/s320/AutoAug1.jpg” border=”0″ //a The second graph shows light vehicle sales since the BEA started keeping data in 1967.br /br /Obviously sales were boosted significantly by the “Cash-for-clunkers” program. Although this wasn’t as bad as some of the lower forecasts, it still a disappointing number.br /br /The real question is: What happens in September?div class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-5091869009442511704?l=www.calculatedriskblog.com’//div

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Here is a graph of bankruptcy filings vs. mortgage delinquencies (including homes in foreclosure process) by state for Q2 2009.br /br /a onclick=”window.open(this.href, ‘_blank’, ‘width=1180,height=840,scrollbars=yes,resizable=yes,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0′); return false” href=”http://4.bp.blogspot.com/_pMscxxELHEg/SpqRF1l8joI/AAAAAAAAGQA/hAjQqozd_Bg/s1600-h/BanruptcyDeliquencyStateQ2009.jpg”img style=”BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; FLOAT: left; MARGIN: 10px; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid” alt=”Bankruptcy vs. Mortgage Delinquencies by State” src=”http://4.bp.blogspot.com/_pMscxxELHEg/SpqRF1l8joI/AAAAAAAAGQA/hAjQqozd_Bg/s320/BanruptcyDeliquencyStateQ2009.jpg” border=”0″ //a ibspan style=”font-size:85%;”Click on graph for larger image in new window./span/b/i br /br /The bankruptcy filings data is from the a href=”http://www.abiworld.org/”American Bankruptcy Institute/a. br /br /The mortgage delinquency data is from the a href=”http://www.mbaa.org/”Mortgage Bankers Association/a.br /br /No surprise - there is a clear correlation, although each state has different bankruptcy laws that can impact the relationship (see Florida).br /br /Here is a sortable table to find the data for each state (use scroll bar to see all data).br /br /iframe width=”620″ height=”600″ frameborder=”0″ scrolling=”yes” marginheight=”0″ marginwidth=”0″ src=”http://cr4re.com/BankruptcyDelinquent.html”/iframediv class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/10004977-4662188636017392573?l=www.calculatedriskblog.com’//div

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