ADP National Employment Report: August 2012

Today, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in August as private employers added 201,000 jobs in the month bringing the total employment level 1.96% above the level seen in August 2012.

Perusing the rest of the data in the ADP dataset you can see the the economy is currently showing the most growth for small to mid-sized service providing jobs with goods-producing jobs remaining near trough levels.

Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims September 06 2012

Today’s jobless claims report indicated that both initial and continued unemployment claims declined while seasonally adjusted initial claims remained below the closely watched 400K level.

Seasonally adjusted “initial” declined by 12,000 claims to 365,000 claims from a revised 377,000 claims for the prior week while seasonally adjusted “continued” claims declined by 6,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.26 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.11 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.38 million people on state and federal unemployment rolls.

On The Stamp: Food Stamp Participation June 2012

As a logical consequence of the prolonged economic downturn it appears that participation in the federal food stamp program is continuing to rise.

In fact, household participation has been climbing so steadily that it has far surpassed the last peak (which looks like a minor blip by comparison) set as a result of the immediate fallout following hurricane Katrina.

The latest data released by the Department of Agriculture indicated that in June, 173,612 recipients were added to the food stamps program with the current total increasing 3.29% on a year-over-year basis while household participation increased 4.90% over the same period.

Individual participation as a ratio of the overall civilian non-institutional population has increased 1.73% over the same period.

Participation continues to swell with nominal benefit costs climbing 2.75% on a year-over-year basis to $6.20 billion for the month.

Skaneateles Real Estate - The Summer-Ending Update

The past three weeks is the longest time I've been away from this blog ever, in the five or so years I've been writing it.  But business has never been better!  I start the day before dawn when Charlie gets me up if I'm at home, and then fall into my chair at night around 8:00, content to have a Corona Light and talk about the day, or just sit there.  If I'm at the lake I skip dinner altogether and go straight to a movie and falling asleep in my wicker chair.  "Make hay while the sun shines..."  It's been a bit cloudy over the past few years, not in my business, but in the market as a whole.  August.  Who knew?

So to catch up.  In the listings area there really wasn't much action.  Currently there are 109 active single family homes in the Skaneateles area of the multiple listing service.  Of these, 30 are in the Village and 27 are listed as waterfront.  In the past three weeks only 6 homes have come on the market for the first time.  Each and every one is a Village home!  They range in price from the low $200,000 to almost a million.

There is not a great deal of change in the numbers of the "contingent, under contract" homes - still a hefty 31.  However, 11 of these are new to this category.  Six come from the town, two are waterfront, and three are Village properties.  That's remarkable in that the percentages are similar to the active listings.

Let's think....if there hasn't been a sizable increase in the contracted properties, then where did the others go?  To the CLOSED category!

We now have 76 homes sold and closed this year - so far - in the Skaneateles area.  Eleven are new, with four coming from the Village and five from the town, and two waterfront homes rounding it out.  Soon we'll have the Fourth Twenty homes to publish.  Last year at this time only 46 homes had closed.  In all of 2011 there were 70.  Yes, we are on a roll!

More interestingly, all the newly closed homes were listed this year.  So if they went under contract approximately in late June, then none of them were on the market longer than five and a half months at the very most.  Of course some were refreshed, or changed agencies perhaps, but I can only see one that was listed in 2011.

So this means that it is time to buy.  With this much demand the prices will undoubtedly rise soon - just the nature of the business!  Rates are still low, but as I cautioned someone today they have risen just a bit in the past two weeks.  We are doing well, and only now going into the fall season.

I can't wait!

Reading Rates: MBA Application Survey – September 05 2012

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined to 3.66% since last week while the purchase application volume declined 0.8% and the refinance application volume declined 3.0% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

ISM Manufacturing Report on Business: August 2012

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity slowed in August.

At 49.6 the purchasing manager’s composite index (PMI) rose 0.40% since July remaining 5.52% below the level seen a year earlier.

Respondents appear to have completed a significant about-face from the optimistic views expressed earlier in the year as they indicated that "slowing" is now the best description of manufacturing activity:

"Internal indicators and feedback from sales channels are indicating a slowdown in demand for capital equipment." (Machinery)

"Business continues to be very solid, but there is now a slowing of incoming orders." (Fabricated Metal Products)

"Incoming orders have slowed somewhat, but indications are that there will be a stronger fourth quarter." (Plastics & Rubber Products)

"Business is slow right now. Companies seem to be holding onto their money." (Computer & Electronic Products)

"We can sense, feel and see headwinds with customer orders, especially Europe related." (Apparel, Leather & Allied Products)

"New orders and backlog remain flat." (Miscellaneous Manufacturing)

"Auto industry slowing a bit in the second half [of the year]." (Transportation Equipment)

"U.S. drought severely impacting raw materials prices." (Food, Beverage & Tobacco Products)

"Lackluster demand continues in all regions of the world, and is supporting much lower raw materials prices in the second half of 2012." (Chemical Products)

Constuction Spending: July 2012

Today, the U.S. Census Bureau released their latest read of construction spending showing an overall decline from last month with total residential and non-residential construction spending declining as single family spending improved while all measures remained at near-cycle lows. 

On a month-to-month basis, total residential spending declined 1.58% from June but rose 17.47% above the level seen in July 2011 while remaining a whopping 60.88% below the peak level seen in 2006.
Single family construction spending climbed 1.45% since June rising 20.55% since July 2011 but remained a whopping 72.91% below it's peak in 2006.

Non-residential construction spending declined 0.88% since June but climbed 8.65% above the level seen in July 2011 and remained a whopping 31.01% below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.