Author Archives: Gregg D. Killoren

U.S. Initial Jobless Claims at 370,000 in Week Ended May 12, 2012

Posted on May 17, 2012 | Leave a comment

The U.S. Department of Labor has announced that initial claims for unemployment insurance were 370,000 in the week ended May 12, 2012.  Using the usual upward revision of the prior week’s figure, the DOL is able to state that claims were unchanged.  However, the previous week was revised higher by 3,000 to 370,000.  The four-week moving average was 375,000, a decrease of 4,750 from the previous week.

The full DOL press release follows:

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending May 12, the advance figure for seasonally adjusted initial claims was 370,000, unchanged from the previous week’s revised figure of 370,000. The 4-week moving average was 375,000, a decrease of 4,750 from the previous week’s revised average of 379,750.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending May 5, unchanged from the prior week’s revised rate.

The advance number for seasonally adjusted insured unemployment during the week ending May 5 was 3,265,000, an increase of 18,000 from the preceding week’s revised level of 3,247,000. The 4-week moving average was 3,282,750, a decrease of 11,750 from the preceding week’s revised average of 3,294,500.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 322,821 in the week ending May 12, a decrease of 18,259 from the previous week. There were 361,573 initial claims in the comparable week in 2011.

The advance unadjusted insured unemployment rate was 2.5 percent during the week ending May 5, unchanged from the prior week’s unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,127,783, a decrease of 83,044 from the preceding week. A year earlier, the rate was 2.9 percent and the volume was 3,586,266.

The total number of people claiming benefits in all programs for the week ending April 28 was 6,273,624, a decrease of 149,759 from the previous week.

Extended benefits were available in Alaska, California, Colorado, Connecticut, the District of Columbia, Florida, Idaho, Illinois, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Texas, and West Virginia during the week ending April 28.

Initial claims for UI benefits by former Federal civilian employees totaled 1,197 in the week ending May 5, a decrease of 7 from the prior week. There were 2,606 initial claims by newly discharged veterans, an increase of 380 from the preceding week.

There were 17,695 former Federal civilian employees claiming UI benefits for the week ending April 28, a decrease of 1,814 from the previous week. Newly discharged veterans claiming benefits totaled 39,689, an increase of 7 from the prior week.

States reported 2,666,007 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending April 28, a decrease of 22,150 from the prior week. There were 3,468,979 claimants in the comparable week in 2011. EUC weekly claims include first, second, third, and fourth tier activity.

The highest insured unemployment rates in the week ending April 28 were in Alaska (5.3), Puerto Rico (3.9), California (3.7), Pennsylvania (3.6), New Jersey (3.5), Oregon (3.5), Connecticut (3.3), Rhode Island (3.2), Illinois (3.1), Nevada (3.1), and Wisconsin (3.1).

The largest increases in initial claims for the week ending May 5 were in Missouri (+2,569), New York (+2,276), Pennsylvania (+1,674), California (+1,613), and Texas (+1,229), while the largest decreases were in Florida (-2,599), Indiana (-1,735), Connecticut (-1,038), New Hampshire (-836), and Massachusetts (-668).

UNEMPLOYMENT INSURANCE DATA FOR REGULAR STATE PROGRAMS

WEEK ENDING Advance May 12 May 5 Change April 28 Prior Year1
Initial Claims (SA) 370,000 370,000 0 368,000 418,000
Initial Claims (NSA) 322,821 341,080 -18,259 333,476 361,573
4-Wk Moving Average (SA) 375,000 379,750 -4,750 384,250 434,500
 
WEEK ENDING Advance May 5 April 28 Change April 21 Prior Year1
Ins. Unemployment (SA) 3,265,000 3,247,000 +18,000 3,290,000 3,747,000
Ins. Unemployment (NSA) 3,127,783 3,210,827 -83,044 3,292,997 3,586,266
4-Wk Moving Average (SA) 3,282,750 3,294,500 -11,750 3,300,500 3,752,500
Ins. Unemployment Rate (SA)2 2.6% 2.6% 0.0 2.6% 3.0%
Ins. Unemployment Rate (NSA)2
 2.5% 2.5% 0.0 2.6% 2.9%

INITIAL CLAIMS FILED IN FEDERAL PROGRAMS (UNADJUSTED)

WEEK ENDING

May 5

April 28

Change

Prior Year1
Federal Employees 1,197 1,204 -7 1,449
Newly Discharged Veterans 2,606 2,226 +380 2,470

PERSONS CLAIMING UI BENEFITS IN ALL PROGRAMS (UNADJUSTED)

WEEK ENDING

April 28

April 21

Change

Prior Year1
Regular State 3,201,525 3,283,672 -82,147 3,711,863
Federal Employees (UCFE) 17,695 19,509 -1,814 26,495
Newly Discharged Veterans (UCX) 39,689 39,682 +7 37,186
EUC 2008 3 2,666,007 2,688,157 -22,150 3,468,979
Extended Benefits 4 304,755 350,579 -45,824 640,042
State Additional Benefits 5 7,079 5,745 +1,334 28,542
STC / Workshare 6 36,874 36,039 +835 45,169
TOTAL 6,273,624 6,423,383 -149,759 7,958,276

FOOTNOTES
SA – Seasonally Adjusted Data, NSA – Not Seasonally Adjusted Data
1 – Prior year is comparable to most recent data.
2 – Most recent week used covered employment of 127,048,587 as denominator.
3 – EUC weekly claims include first, second, third, and fourth tier activity. Tier-specific EUC data can be found here: http://ows.doleta.gov/unemploy/docs/persons.xls
4 – Information on the EB program can be found here: http://www.ows.doleta.gov/unemploy/extenben.asp
5 – Some states maintain additional benefit programs for those claimants who exhaust regular, extended and emergency benefits. Information on states that participate,
and the extent of benefits paid, can be found starting on page 4-5 of this link: http://ows.doleta.gov/unemploy/pdf/uilawcompar/2010/special.pdf
6 – Information on STC/Worksharing can be found starting on page 4-9 of the following link: http://ows.doleta.gov/unemploy/pdf/uilawcompar/2010/special.pdf

UNADJUSTED INITIAL CLAIMS FOR WEEK ENDED 05/5/2012

STATES WITH A DECREASE OF MORE THAN 1,000

State Change   State Supplied Comment
FL -2,599   Fewer layoffs in the trade, agriculture, construction, retail, and service industries.
IN -1,735   No comment.
CT -1,038   No comment.

STATES WITH AN INCREASE OF MORE THAN 1,000

State Change   State Supplied Comment
MO +2,569   Layoffs in the manufacturing industry.
NY +2,276   Layoffs in the construction, professional, scientific, technical service, and finance and insurance industries.
PA +1,674   Layoffs in the construction, entertainment, lodging, and food service industries.
CA +1,613   Layoffs in the service industries.
TX +1,229   No comment.

State Detail Prior Week
UI Claims Series 1967 to current

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Posted in Economy, Employment Report, Indicators

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U.S. Federal Open Market Committee Minutes from April 2012 Meeting Released

Posted on May 16, 2012 | Leave a comment

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on April 24-25, 2012. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the April 24-25, 2012 meeting is also included as an addendum to these minutes.

Among the more pertinent discussions for investors, several members indicated more easing “could be necessary if economic recovery lost momentum” or downside risks rise.  The difficulty in gauging whether another round of quantitative easing is coming is in just how bad things would need to get.  For investors, the question is how many points on the Dow or S&P 500 would have to be lost before the Fed acts.

There are clear indications that the FOMC is more concerned with the labor market than inflation. The FOMC members agreed that understanding the reasons behind the decline in the labor force participation rate is “important for understanding unemployment dynamics going forwards.” Recent speeches by certain Fed governors have noted that a big key to helping the housing market recover is improvement in the labor market.  Currently, household remain concerned about future job and income prospects, and therefore are loath to take on any major expenses.

Unfortunately, there is not a whole lot of agreement in the FOMC as to what to do about the labor market. A few of the FOMC members argued that the major reason unemployment is high is that aggregate demand is weak. But a few others argued that current measures of slack in the labor market could be overstated if a lot of today’s high unemployment reflects “structural factors,” such as the skills mismatch.

Coming back to more quantitative easing: if the problem is mainly inadequate aggregate demand, the case for doing more to stimulate the economy is stronger than if the problem is primarily structural.

Here is a link to the FOMC minutes: FOMC Minutes – April 24-25, 2012.

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Posted in Banking, Central Banks, Federal Reserve Board, Monetary Policy

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U.S. Industrial Production +1.1% in April 2012, March Revised Lower

Posted on May 16, 2012 | Leave a comment

The U.S. Federal Reserve has reported that industrial production increased 1.1 percent in April. Output is now reported to have fallen 0.6 percent in March and to have moved up 0.4 percent in February; previously, industrial production was estimated to have been unchanged in both months. Manufacturing output increased 0.6 percent in April after having decreased 0.5 percent in March. Excluding motor vehicles and parts, which increased nearly 4 percent, manufacturing output moved up 0.3 percent, and output for all but a few major industries increased. Production at mines rose 1.6 percent, and the output of utilities gained 4.5 percent after unseasonably warm weather in the first quarter held down demand for heating. At 97.4 percent of its 2007 average, total industrial production for April was 5.2 percent above its year-earlier level. The rate of capacity utilization for total industry moved up to 79.2 percent, a rate 3.1 percentage points above its level from a year earlier but 1.1 percentage points below its long-run (1972–2011) average.

For more information, please click on the Economic Growth Statistics page, then scroll down to the Industrial Production section.

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Purchase Mortgage Applications Down 2.4% in Week Ended May 11, 2012: MBA

Posted on May 16, 2012 | Leave a comment

The Mortgage Bankers Association has reported that applications for mortgages to purchase a home declined 2.4 percent in the week ended May 11, 2012.  Nonetheless, a recent series of weekly increases has the four-week moving average up 1.57 percent.

Thirty-year fixed rate mortgages hit a new all-time low at 3.96 percent, down from 4.01 percent the previous week.

The full MBA press release follows:

WASHINGTON, D.C. (May 16, 2012) — Mortgage applications increased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 11, 2012.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 8.7 percent compared with the previous week.  The Refinance Index increased 13.0 percent from the previous week.  The seasonally adjusted Purchase Index decreased 2.4 percent from one week earlier. The unadjusted Purchase Index decreased 2.4 percent compared with the previous week and was 1.0 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 1.77 percent.  The four week moving average is up 1.57 percent for the seasonally adjusted Purchase Index, while this average is up 1.88 percent for the Refinance Index.

The refinance share of mortgage activity increased to 74.9 percent of total applications from 72.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent from 5.7 percent of total applications from the previous week.

“A flare up of the sovereign debt troubles in Europe once again led investors to flee to the safety of US Treasury securities last week.  As a result, mortgage rates have reached new lows in our survey, and refinancing application volumes picked up substantially as a result,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.    “Survey participants indicated that this was not due primarily to HARP volume – the HARP share of refinances fell to 28 percent of refinance applications, down relative to last week and last month, when the share was just above 30 percent in April.  The increase in refinance activity last week was concentrated in the conventional sector, which was up around 14 percent for the week, while government refinance applications were up only 4 percent.”

During the month of April, the investor share of applications for home purchase was at 5.7 percent, unchanged from March.  The Pacific region has the largest investor share of applications for home purchase at 9.5 percent. In addition, the share of purchase mortgages for second homes decreased to 5.7 percent in April from 5.8 percent in March.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.96 percent, the lowest rate in the history of the survey, from 4.01 percent, with points decreasing to 0.37 from  0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.20 percent, the lowest rate in the history of the survey, from 4.29 percent, with points remaining unchanged at 0.36 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.75 percent, the lowest rate in the history of the survey, from 3.81 percent, with points increasing to 0.66 from 0.45 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.26 percent, the lowest rate in the history of the survey, from 3.29 percent, with points increasing to 0.41 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.80 percent from 2.83 percent, with points increasing to 0.37 from 0.36 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact mbaresearch@mortgagebankers.org or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.

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Posted in Economy, Housing

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U.S. Building Permits Plunge 7.0%, Housing Starts +2.6% in April 2012

Posted on May 16, 2012 | Leave a comment

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced that building permits in April 2012 were at a seasonally adjusted annual rate of 715,000, down 7.0 percent from the revised March rate but up 23.7 percent from April 2011. Housing starts in April 2012 were at a seasonally adjusted annual rate of 717,000, up 2.6 percent from March’s revised estimate and up 29.9 percent from April 2011.

Here is a link to the full report: New Residential Construction – April 2012.

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