American Economy News & Updates

[LeveragedBuyout]

Revised Payroll Data Show Better Mix of Jobs, Nearly Same Total - Real Time Economics - WSJ

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• September 18, 2014, 11:19 AM ET

Revised Payroll Data Show Better Mix of Jobs, Nearly Same Total
ByEric Morath

The Labor Department’s number crunchers pretty much nailed it.

A preliminary annual revision to payroll data, released Thursday, shows an earlier count of how many people were employed in the U.S. in March was off by just 7,000. (Total payrolls equaled 138 million that month.)

The adjustment of less than 0.05% would be the smallest annual revision in at least the past 10 years if the preliminary numbers hold when they’re finalized early next year. Typically annual revisions move the total payroll figure by 0.3%, or by a few hundred thousand jobs.

The new revisions do show somewhat strong job creation in a few sectors. From April 2013 through March 2014, the construction industry added 89,000 jobs more than previously reported and manufacturing added 44,000 more.

The change could be meaningful because those fields provide well-paying, middle-class jobs. Meanwhile, employment in education and health services was revised down by 72,000 and employment in wholesale trade was reduced by 41,000.

“The good news is that the goods producing sector—higher paying and more cyclical—was revised upward,” said Raymond Stone, managing director of Stone & McCarthy Research Associates. “While the offset was in the service-producing sector wherein the wage rate is typically lower.”

The Labor Department surveys a sample of employers to calculate monthly payroll figures. Those numbers are then revised annually with data from state unemployment insurance tax records that covers nearly all employers.

Thursday’s preliminary figure will be followed by a final benchmark revision published in February 2015, with the release of next January’s jobs report.

The small overall revision, of course, does little to reshape the view of the economy. Spread out over 12 months, the recasting changes the average number of jobs created monthly from April 2013 through March 2014 to 191,000 from 190,000.

In the past five months, job creation has accelerated somewhat, growing on average by 231,000, according to monthly figures.

 

[LeveragedBuyout]

How Americans Spend: 1993 vs. 2013 - Real Time Economics - WSJ

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• September 18, 2014, 10:31 AM ET

How Americans Spend: 1993 vs. 2013
ByRani Molla

Labor Department data released last week paints a full picture of how much Americans earned and what they spent their money on in 2013. Compared to the year before, Americans earned and spent less in general, but spent more on health care and housing. What about 20 years ago?

In 1993 on average Americans spent a greater share of our total expenditures on food, entertainment and reading than we did in 2013. We spent less of our total expenditures on health care, housing and property taxes than we do now.

The charts below show how expenditures like reading and housing changed as a percentage of our total spending broken down by age group. You can see that every age group spends a smaller share of their expenditures on reading than their counterparts did 20 years ago, while every group spends more on housing.

For data on more spending categories — such as postage (it went down), property tax and health insurance (both up) — in these same age groups, see the sortable chart below. Note that much of the age group in 1993 that was under 25 now constitutes the age group 35-44 in 2013.

 

[LeveragedBuyout]

http://ftalphaville.ft.com/2014/09/18/1976702/the-return-of-the-american-borrower/

The return of the American borrower
Matthew C Klein | Sep 18 21:59 | Comment | Share

The Federal Reserve’s latest flow of funds data shows that US households have rediscovered their credit cards, and lenders are eager to oblige them. Just look at this:



That 3.6 per cent (annualised) growth rate is quite modest relative to the pre-crisis period but it is nevertheless the fastest pace since the first quarter of 2008. Within the household sector, there is a striking split between the anemic growth rate of mortgage debt (just 0.4 per cent annualised in the quarter ended) and the incredibly rapid increase of consumer credit, which grew at an annualised rate of 8.1 per cent — faster even than during the boom years.

About three-fourths of the growth in consumer debt in the last quarter came from an increase in credit card debt and auto loans.

Over the past five years, mortgage debt has shrunk by about $1.2 trillion (11 per cent) while consumer borrowing — autos, schooling, credit cards, etc — has increased by a little more than $600 billion (24 per cent). Much of that increase, especially during the early years of the recovery, could be explained by soaring student debt burdens, which have grown by nearly $500 billion.

More recently, the rapid growth of auto debt — $100 billion since the start of 2013, much of it subprime — has also played a major role:



What’s new, and potentially encouraging as a sign of better job prospects and higher confidence in future income, is that credit card borrowing has finally begun to accelerate in a meaningful way after shrinking for years:



Encouragingly, all of this is happening even as the government gradually removes its support from the economy. Sovereign debt growth is anemic, while the Fed has (arguably) started the very beginning of its tightening cycle. In fact, the underlying strength of the credit markets both in the US and globally may justify a relatively more aggressive Fed policy path than simpler considerations of employment and inflation would dictate.

 

[Aepsilons]

Panasonic eyes ¥150 bil. for U.S. plant

Panasonic Corp. plans to invest up to ¥150 billion in a battery factory to be built jointly with U.S. electric automaker Tesla Motors Inc., according to sources.
The two companies are expected to finalize the deal by the end of this month, the sources said.

In fiscal 2011 and 2012, Panasonic posted a net loss of more than ¥750 billion for two consecutive years. However, its structural reforms have produced results, paving the way for the company to resume large investments.
American Economy News & Updates | Page 5
Panasonic will prepare for lithium-ion battery production at a factory in Nevada, which will be one of the world’s largest for such batteries. Construction is scheduled to start by late next year, with the factory due to open in 2017. For the $5 billion (¥530 billion) factory, the Japanese company plans to make its investment in increments of ¥20 billion to ¥30 billion spread out over the period from 2015 to 2020.

By the end of 2020, Panasonic plans to produce lithium-ion batteries for 500,000 electric vehicles, with the aim of cutting production costs by more than 30 percent through mass production. Eventually, the two companies aim to market Tesla’s future models at around half the price of the U.S. automaker’s latest sedan, “Model S,” that is currently priced in Japan from ¥8.23 million, including tax.

In July, Panasonic, which has been the sole battery cell provider for Tesla since 2009, signed a basic agreement to jointly build the factory with the U.S. automaker.

Panasonic’s battery business had been in the red mainly due to sluggish sales of batteries for computers, but a shift in focus to vehicle batteries, for which there is more stable demand, has helped the business turn profitable. The company now aims to boost sales of batteries for vehicles to ¥450 billion in fiscal 2018, more than triple the sales in fiscal 2013


Panasonic eyes ¥150 bil. for U.S. plant - The Japan News

 

[LeveragedBuyout]

U.S. Home Prices Are Now Just 6.4% Below All-Time High - Real Time Economics - WSJ

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• September 23, 2014, 10:02 AM ET

U.S. Home Prices Are Now Just 6.4% Below All-Time High
ByNick Timiraos

The pace at which U.S. home prices are rising has slowed down, but a new report Tuesday shows that home prices have retraced much of the ground they lost after the 2008 crash.

Prices rose 0.1% in July after adjusting for seasonal factors, according to an index maintained by the Federal Housing Finance Agency. The index is calculated using prices on mortgages backed by Fannie Mae and Freddie Mac. That was down from increases of 0.3% in June and 0.2% in May, but it represents the eighth straight monthly gain.

With the latest increase, home prices are now up 4.4% over the past year. What’s more surprising is that the index shows U.S. prices now standing just 6.4% below their previous peak in April 2007.

The S&P/Case-Shiller index is a separate tool used to measure home prices. It showed a bigger home price boom—and a bigger accompanying bust—in part because it included more expensive homes with loans that weren’t eligible for purchase by Fannie and Freddie. It also didn’t include loans financed by subprime mortgage lenders that weren’t selling loans to Fannie and Freddie.

Also, the FHFA index is unit-weighted, meaning all sales count equally. The Case-Shiller index is value-weighted, which means price changes in more expensive properties receive greater emphasis.

The Case-Shiller national index, which is set to report its own measure of July home prices next Tuesday, showed that home prices in June were 9.9% below their 2006 peak.

 

[LeveragedBuyout]

Chart Of The Week: Is US Wage Growth About To Gather Steam? | Alpha Now | Thomson Reuters

CHART OF THE WEEK: IS US WAGE GROWTH ABOUT TO GATHER STEAM?
September 23rd, 2014 by Fathom Consulting

US wage growth remains well contained, which probably explains why most FOMC voting members are content to wait a ‘considerable’ period of time between the end of QE and the first policy rate hike. However, a survey of employers suggests that wage growth may pick up by a percentage point or more through the remainder of this year.



Refresh Chart Edit Chart

The phrase ‘considerable time’, used to describe the duration of the pause between the end of the asset purchase programme and the first increase in interest rates, remained within the lexicon of US forward guidance following last week’s FOMC meeting. This was contrary to the wishes of two members – Philadelphia Fed President Plosser, who became the first voting member to dissent back in July, was joined this month by Dallas Fed President Fisher.

In response, Chair Yellen went to some lengths during the press conference to stress that these words are not ‘calendar based’ and therefore have no ‘mechanical interpretation’. And despite the fact that many labour market indicators seem to be well on the way back to pre-crisis norms, in her latest remarks Ms Yellen again drew attention to the ‘underutilisation of the labour market resources’.

Her cautious stance is presumably related to the lack of any meaningful pick-up in wage growth. Average hourly earnings for all private non-farm employees rose by 2.1% in the twelve months to August. This measure of pay growth has remained at or below 2.5% for more than five years. However, a survey from the National Federation of Independent Business suggests that this may be about to change. The percentage of firms planning to raise worker compensation – usually a good leading indicator of the official data – is close to a six-year high. As such, given the continued strength of the US recovery, our own projections for US interest rates remain much closer to the Fed’s ‘dot’ estimates than the market’s expectation of a relatively more gradual tightening path.

 

[LeveragedBuyout]

This is not a good trend. As Charles Murray has pointed out, marriage is a cornerstone to success, and the difference in marriage rates both reflects and helps explain the differences in economic achievements among the various groups.

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More Americans Forgo Marriage as Economic Difficulties Hit Home - Real Time Economics - WSJ

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• September 24, 2014, 12:01 AM ET

More Americans Forgo Marriage as Economic Difficulties Hit Home
ByNeil Shah
As long-term financial security becomes a pipe dream for more Americans, a growing share is giving up on marriage.

One in five U.S. adults aged 25 or older had never been married in 2012, a record high, according to a new report by the Pew Research Center that analyzed Census data. In 1960, the number was one in ten.

According to an accompanying survey Pew conducted this May and June, only 53% of all never-married adults said they would like to marry eventually, down from 61% in 2010. Around 32% said they were not sure, up from 27% in 2010.

The figures in the Census data are more striking for African-Americans. Some 36% of blacks aged 25 and up had not been married in 2012, compared to 25% in 1990 and 9% in 1960. For whites, the share of never-married was 16% in 2012, up from 11% in 1990 and 8% in 1960.

Americans are putting off tying the knot in greater numbers for a variety of reasons.

The sexual revolution of the 1960s and 1970s along with rising numbers of women attending college and entering the workforce have helped increase the age when Americans get married and soften public attitudes on marriage.

The decline of religious institutions and the growing importance of higher education in an increasingly services-driven economy probably play a role, too.

But a major factor is simply the economy, which has grown slowly–and increasingly unequal–in recent decades, Pew notes in analyzing the survey of 2,000 American adults.

Incomes haven’t risen for most Americans since the 1980s, after adjusting for inflation, even though housing and child-rearing costs have. Young men have been hit particularly hard: For men 25 to 34, median hourly wages have declined 20% since 1980 in real terms.

Despite their growing economic difficulties, many Americans consider financial security (or at least a partner with a job) a prerequisite for marriage.

In its spring survey, Pew found nearly 80% of never-married women said finding someone with a steady job was very important to them in choosing a spouse or partner. Among men and women who had never married but wanted to, nearly a third said they were not financially prepared for marriage.

The problem, Pew explains, is the economic malaise of the last few decades—hidden for a time by a home-price boom—has shrunk the pool of available employed men. At the same time, women’s educational attainment and labor-force participation has generally risen.

Put simply, for today’s never-married women, a “good” man is harder to find.

Among never-married adults aged 25 to 34, the number of employed, available men per 100 women has dropped to 91 in 2012, from 139 in 1960. That means if all of 2012’s never-married young women wanted to find a young, employed man who also hadn’t been married, about 9% of them would automatically fail—due to a man shortage. (Of course, these women could find and marry divorced men, or older men.)

Once again, it’s worse for blacks. Among never-married black adults aged 25 to 34, there were 87 employed men for every 100 women back in 1960. In 2012? Just 51.

The upshot?

For many Americans, staying single, cohabiting or raising children out of marriage increasingly looks like the best available option.

Nearly 25% of young adults 25 to 34 who have never been married were cohabiting last year, up from under 22% in 2007, Pew says. Roughly 7% of adults 30 to 44 were cohabiting in 2010, too, according to a different analysis, up from 3% in 1995.

 

[LeveragedBuyout]

This could also go in the Team USA thread. @Peter C

 

[Audio]

Americans are putting off tying the knot in greater numbers for a variety of reasons.

lmao, i got a very funny, extremely politically incorrect explanation for this chart.

 

[Hamartia Antidote]

I'm sure the trend of companies only looking for college graduates for all of their positions matched with the high cost of a college education is influencing the "good" man percentages.

Something is going to snap sometime.
As I have said before they will take the easy solution of lowering education costs by increasing enrollment and watering down degrees.

This could also go in the Team USA thread. @Peter C

Feel free to add it yourself. I don't want to be seen as the "righteous" owner of that thread. The more help the better!

 

[VCheng]

Feel free to add it yourself. I don't want to be seen as the "righteous" owner of that thread. The more help the better!

USA leads and the world follows, hence the thread is open to all.

 

[F-22Raptor]

http://online.wsj.com/articles/u-s-economy-grew-at-4-6-rate-in-second-quarter-1411734858

Growth has been revised upwards to 4.6% for Q2.

 

[LeveragedBuyout]

Small Business Optimism Stuck in ‘Second Gear,’ NFIB Says - Real Time Economics - WSJ

• 

• October 14, 2014, 7:30 AM ET

Small Business Optimism Stuck in ‘Second Gear,’ NFIB Says
ByKathleen Madigan

Small-business owners remained wary about economic conditions in September, according to a report released Tuesday. The caution has caused a cutback in equipment spending and hiring plans.

The National Federation of Independent Business‘s small-business optimism index fell to 95.3 in September from 96.1 in August. Back in May the index reached a cycle-high of 96.6 but lost momentum over the summer.

“Optimism can’t seem to get out of second gear,” the report said.

Economists surveyed by the Wall Street Journal expected the latest index to slip to 95.9.

The top-line index’s September decline can be traced to steep drops in two components. The subindex covering hard-to-fill job openings fell 5 percentage points last month to 21%, while the capital outlays subindexes tumbled 5 points to 22%.

In addition, small business owners are cautious about their sales activity. The positive earnings trend declined 2 points to -19%, while the sales expectation subindex fell 1 point in September to 5%.

“Overall, these readings are more like a recession period than one of expansion,” the NFIB said.

News on the labor front was more positive. Small firms hired more people in the three months ended in September. On average, NFIB members increased employment by 0.24 worker per firm, the largest net gain so far in 2014.

But the trend may not hold in coming months, the NFIB warned. In addition to the declining share of employers already with at least one open position, the job-creation subindex–which measures plans to add staff in the future–fell 1 percentage point to 9%, “suggesting weaker job creation ahead” the report said.

Pricing power also continues to unravel for the small business sector. Seasonally adjusted, a net 4% of owners have raised selling prices recently. September’s reading was down 2 points from August’s index which posted a large 8-point drop from the July level.

Looking ahead, a net 16% plan to raise prices in the next three months, down 3 points from the share planning price hike in August.

“All is quiet on the inflation landscape,” said the report.

 

[LeveragedBuyout]

Mortgage Rates Fall To Lowest Level Since June 2013 - Real Time Economics - WSJ

• 

• October 15, 2014, 7:46 AM ET

Mortgage Rates Fall To Lowest Level Since June 2013
ByNick Timiraos

Mortgage rates fell to a 16-month low last week, reprising a familiar turn of events in which concerns about the global economy have sent investors seeking the safety of U.S. bonds.

The upshot is that American borrowers could once again benefit from global growth jitters. The Mortgage Bankers Association reported Wednesday that the rate on the average 30-year fixed-rate loan fell to 4.2% last week, from 4.3% the week before. Rates stood as high as 4.72% at the beginning of the year.

Mortgage rates tend to track Treasury yields, which have tumbled over the past two weeks reflecting investors’ unease, first over a possible slowdown in China and more recently in Europe. The yield on the 10-year Treasury fell to 2.2% late Tuesday, near its lowest level since June 2013.

Mortgage rates spiked in June 2013 as investors braced for the Federal Reserve to pull back from its bond-buying program. The so-called “taper tantrum” sent mortgage rates from around 3.6% in early May 2013 to 4.75% by July 2013.

The Federal Reserve did announce plans to taper its purchases of mortgage-backed securities and Treasurys last December, and it is on pace to end those purchases this month. But even as investors have braced for the Fed to raise interest rates next year, Treasurys have fallen.

The jump in rates last year effectively killed the latest in a series of refinance waves that began in earnest in late 2008, when the Fed announced its first round of bond purchases. It also led to a slowdown in home sales as buyers adjusted to paying higher prices on top of increased financing costs.

Over the past week, some mortgage lenders have been advertising rates of less than 4%, though those typically require borrowers to pay fees equal to at least 1% of the loan amount. The MBA’s weekly average rate of 4.2% last week, meanwhile, carried fees equal to around 0.17% of the loan amount.

The MBA reported that its index tracking refinance applications rose 11% last week, though applications were still 27% below last year’s level. Many analysts believe rates would need to fall at least another 0.25 percentage points to generate a serious rebound in refinancing.

Applications for home-purchase loans, meanwhile, were down a seasonally adjusted 0.3% from the previous week, but they were just 3.8% below the level of one year earlier, the smallest such year-over-year decline so far in 2014.

 

[LeveragedBuyout]

U.S. Debt Held by Foreigners Hits Record $6.07 Trillion - Real Time Economics - WSJ

• 

• October 17, 2014, 9:26 AM ET

U.S. Debt Held by Foreigners Hits Record $6.07 Trillion
ByIan Talley
Foreign holdings of U.S. Treasury securities hit a record high $6.07 trillion in August, up nearly $70 billion from July, as the dollar began its climb to five-year highs and the U.S. recovery showed signs of gaining steam.

Japan added more than $11 billion to its stockpile – largely in bonds and notes – while China and Belgium, a proxy trader for Beijing, added a net $12 billion to its holdings. The figures came in a monthly Treasury Department report released Thursday afternoon.

The U.S. Treasury said in its semi-annual currency report published late Wednesday that China bought roughly $135 billion in foreign currencies in the year through August to keep the value of the yuan down as growth in the Asian powerhouse slowed.

There’s a good chance that September and October could continue to set new records for foreign holdings of U.S. debt, as indicated by the steady strengthening of the dollar since August andplummeting bond yields.

Amid increasing worries about slowing emerging-market growth slowing and recession risks in the eurozone rising, investors have plowed their cash into the relative safety of U.S. debt.