http://www.zerohedge.com/news/2013-06-05/worst-month-mortgage-apps-2009-driving-mass-layoffs
Submitted by Tyler Durden on 06/05/2013 09:07 -0400
So much for the thesis of declining labor slack and rising labor leverage. Moments ago the BLS reported its Q1 labor costs which poured cold water over all recent hypotheses that the US worker's plight is improving. It isn't: productivity increased by 0.5% in Q1 in ling with expectations of 0.6% (on what is not exactly clear - everyone on their iPhones?) but it was labor costs which plunged -4.3% on expectations of a +0.5% increase driven by a 3.8% collapse in hourly compensation that was the stunner. This was the biggest labor cost drop in four years and the biggest collapse in hourly compensation in well, ever and confirms our observations from the last NFP report that quantity gains in jobs continue to be offset by quality declines in actual worker pay. As a reminder we were scratching our heads following the soaring Q4 labor cost and declining productivity data which made no sense in the general context of deteriorating labor conditions. Following this print, it all falls back into place and confirms the Q4 data was nothing but an outlier. Also,this may be the end of the core thesis behind David Rosenberg's recently developed reflationary argument.
Worst Month For Mortgage Apps Since 2009 Driving Mass Layoffs
This morning's 11.5% week-over-week plunge in mortgage applications is the fourth week of fading demand in a row as it appears the bloom is very much off the rose of the second-coming of the housing bubble. This makes it the worst plunge in mortgage applications since June 2009 and the lowest level of activity since December 2011. Wondering how this is possible? We explained in detail here but this collapse in mortgage demand fits perfectly with Mark Hanson's insights that a number of "large private mortgage bankers had mass layoffs last Friday to the tune of 25% to 50% of their operations staff." This all feels very deja vu all over again.
Chart: Bloomberg
As Mark Hanson notes,
This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its' way to print multi-year lows in the next month.
The concerning picture is the following:
So if the fast 'dumb-chasing-fast' money is leaving the building (as we explained here), then given this plunge in 'real' mortgage apps, it is not a stretch to expect the new home sales to fill that gap...
Hourly Compensation Crashes Most Ever, Labor Costs Drops By Most In 4 Years, Manufacturing Compensation Plummets By 7%
Submitted by Tyler Durden on 06/05/2013 - 08:51
So much for the thesis of declining labor slack and rising labor leverage. Moments ago the BLS reported its Q1 labor costs which poured cold water over all recent hypotheses that the US worker's plight is improving. It isn't: productivity increased by 0.5% in Q1 in ling with expectations of 0.6% (on what is not exactly clear - everyone on their iPhones?) but it was labor costs which plunged -4.3% on expectations of a +0.5% increase driven by a 3.8% collapse in hourly compensation that was the stunner. This was the biggest labor cost drop in four years and the biggest collapse in hourly compensation in well, ever and confirms our observations from the last NFP report that quantity gains in jobs continue to be offset by quality declines in actual worker pay. As a reminder we were scratching our heads following the soaring Q4 labor cost and declining productivity data which made no sense in the general context of deteriorating labor conditions. Following this print, it all falls back into place and confirms the Q4 data was nothing but an outlier. Also,this may be the end of the core thesis behind David Rosenberg's recently developed reflationary argument.ADP Misses Expectations, Second Worst Print In Last 8 Months; Sequester Blamed
Submitted by Tyler Durden on 06/05/2013 - 08:27
By now it is futile to point out the woeful inability of the ADP report to predict the NFP's ARIMA X 12 output of pure noise so we'll leave it at that. Here is the headline: May private payrolls created 135K with consensus looking for 165K - only two analysts were looking for a weaker number. This was the second lowest print since September excluding only the April 113K print. What's worse is that the prior number which usually is revised to match the NFP was revised lower from 119K to 113K, confirming that the quality of NFP reporting in the past month is suspect to quite suspect. Don't expect the imminent arrival of a manufacturing renaissance: mfg jobs were down 6,000. But fear not - Mark Zandi blames it on the sequester: "Manufacturers are reducing payrolls. The softer job market this spring is largely due to significant fiscal drag from tax increases and government spending cuts." At least it wasn't the May weather or tornadoes...
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