Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Market Archive

Market

Home-building Permits Up 6.2% In October For Five-year High

 Permanent link
WASHINGTON (11/27/13)--A report published Tuesday by the Commerce Department suggests that the number of permits issued to construct new homes in the U.S. increased by 6.2% in October, reaching a post-recession high of 1.03 million.

Permits issued in September--a month that saw a 5.2% increase--were upwardly revised to 974,000. The largest number of permits issued since 2008 had previously occurred in April, when the department counted one million new approvals.
 
Most of the gains were in permits concerning buildings of five units or more. This relatively volatile sector of the industry saw permits increase by 17% in October, with most issuance occurring in the South and West (MarketWatch Nov. 26). Applications for single-family homes rose by 0.8% to 620,000.
 
The highest increase in the number of permits overall issued occurred in the South and West. Numbers were relatively stagnant in the Northeast and they declined in the Midwest.

The number of permits increased by an annual basis of 13.9% in October.
 
Moody's analysts said that the report indicates more robust homebuilding in the next few months, and the possibility of builders reversing "aggressive price increases" that characterized the housing market over the past half-year, after building activity slowed significantly in the second quarter (Economy.com Nov. 26).
 
But the firm's analysts also noted that, in October, there were 7,000 fewer single-family home permits issued than there were in August, revealing that this relatively more stable sector of the building industry is experience weak growth. Moody's analysts also said that rising mortgage interest rates, increasing material and land costs, and land and labor shortages could hamper supply growth--problems that could be offset if builders are flexible on prices and help with mortgage financing.
 
Not all permits lead to timely construction, and the Commerce Department said that October's partial government shutdown has delayed collection of September and October ground-breaking data. A report containing that information is expected to be published on Dec. 18 (MarketWatch.com Nov. 26).

More Indexes Confirm Home Prices Accelerating

 Permanent link
WASHINGTON and NEW YORK (11/27/13)--Two prominent indexes confirmed Tuesday that home prices have been accelerating this fall, but the upward trend is showing signs of abatement.
 
The seasonally adjusted Standard &Poor's/Case Shiller 20-city Home Price Index and the Federal Housing Finance Agency Purchase-Only House Price Index increased in September by 1% and 0.3% respectively.
 
The S&P/Case Shiller Index over the entire third quarter grew by 13.3% on an annual basis, with the strongest gains out west--in Las Vegas (29.1%), San Francisco (25.7%), Los Angeles (21.7%) and San Diego (20.9%). Weakest gains were recorded in New York (4.3%), Washington (7%) and Boston (7.5%). The FHFA index also showed annual nationwide growth in September, with its purchase-only index increasing by 8.5% since September 2012 (Economy.com Nov. 26).
 
Both the FHFA and S&P/Case Shiller indicate that housing prices have almost recovered from the recession. The former's purchase-only index last reached its September 2013 level, 206.4, in April 2005 before peaking in 2006. A nationwide measure recorded by the latter showed that housing prices climbed by 11.2% on an annual basis in the third quarter--the highest increase since the first quarter of 2006.
 
Similarly, both the regulator and the research firm showed that prices started to cool as the quarter wore on. Growth in S&P/Case Shiller 10-city and 20-city indexes declined steadily, and almost identically, from 2.2% in June to 0.7% in September. Nationally, the FHFA purchase-only index grew by 0.7% in June and July, before dropping to 0.5% in August and 0.3% in September.
 
Bloomberg said price increases can be attributed to a lackluster supply of homes on the market, with fewer distress sales (Bloomberg.com Nov. 26).
 
Moody's analysts said that the FHFA's numbers--which don't account for cash purchases and agency mortgage-finance purchases--reflect weaker demand from non-investor customers.

Pending Home Sales Continue Five-month Slide

 Permanent link
WASHINGTON (11/26/13)--A key measure of future home sales fell for the fifth month in a row in October, dropping to its lowest level since December 2012.
 
The National Association of Realtors announced Monday that its Pending Home Sales Index fell by 0.6% last month to 102.1. The report also found that purchases fell on an annual basis in October by 2.2%, with the index declining by 1.6% since October 2012.
 
The measure fell by 4.6% in September, despite being revised upward to 102.7 from 101.6.
 
The monthly decline defied many analysts' expectations. Economists polled by Bloomberg predicted a 1% gain in the gauge (Bloomberg.com Nov. 25). Moody's analysts predicted that the NAR index would increase by 1.1% (Economy.com Nov. 25).
 
A number of factors help explain the decline. Higher mortgage rates and price increases driven by a declining supply of homes on the market underpin the decrease in pending purchases. Analysts at Bloomberg also said that a more robust labor market would lead to more home sales, and Moody's analysts said that the federal government shutdown and uncertainty over a lasting congressional agreement on fiscal issues have eroded consumer confidence.
 
Activity in the housing market has a ripple effect in the economy, moving the bottom lines of firms making durable consumer goods and housing accessories.
 
The NAR Pending Home Sales index typically predicts changes in home sales one to two months in advance. A score of 100 corresponds to the average level of home sales in 2001.

Home Price Index Inches Up In September

 Permanent link
NEW YORK (11/26/13)--Home prices crept up by 0.2% in September, according to the LPS Home Price Index.
 
The index also increased by 8.2% on an annual basis in September, reflecting a 9% increase in home prices. The average unadjusted home price was $231,720.
 
The monthly change represents a months-long cooling of the housing market that is expected to continue. From the start of the year until August, the seasonally adjusted LPS Home Price Index increased by about 0.8% every month. It grew at 0.5% from August to September.
 
A preliminary incomplete data set shows that home prices will increase on a seasonally adjusted monthly basis by 0.4% in October (Economy.com Nov. 25). A key predictor  of pending home sales--tabulated by the National Association of Retailers--forecast Monday a decrease for the fifth consecutive month (Market News Nov. 26). Higher mortgage rates, weak wage growth and low consumer confidence are all weighing down demand, said analysts.
 
Price fluctuations in different states varied little in September, with the biggest drop, at 0.9%, occurring in Connecticut, and the biggest rise, at 0.8%, occurring in Nevada (TheStreet.com Nov. 25).
 
The annual increase in home value was fairly consistent over a range of home prices, with growth marginally stronger in the middle of the distribution.
 
The LPS index comes out every month. It takes into account home prices based on transactions, and adjusts for prices of homes involved in distress sales.

Consumer Spending Increased in October Despite Shutdown

 Permanent link
WASHINGTON (11/25/13)--Major events in October appear to have had little impact on consumer habits, according to data released Friday by the Commerce Department.
 
A measure of retail sales increased by 0.4% in October after remaining stagnant in September. Both the government shutdown and the introduction of the iPhone 5 appear to have done little to sway consumer behavior.
 
Retail spending increased on an annual basis by 3.9% in October, but Moody's said that it remains relatively weak. The financial analysts also said that volatility has been a theme in retail sales data this year, with different industries leading sales increases almost every month--a sign, Moody's says, of consumers releasing pent-up demand that is being bogged down by slow wage growth (Economy.com Nov. 22).
 
The segments of the index that saw most gains in October were furniture, electronics and appliances, apparel and sporting goods stores and restaurants. Auto sales were also strong last month, but primarily in the used car market.
 
Revisions of previously released Commerce Department data were small. Growth in August is still at 0.2%, and growth in September was revised down to 0% from 0.1%

Jobless Claims Fall By 21,000 For Week Ending Nov. 16

 Permanent link
WASHINGTON (11/22/13)--The Labor Department was the bearer of moderately good news Thursday, one week outside the start of the holiday shopping season.
 
Department officials announced that initial jobless claims fell by 21,000 to 323,000 for the week ending November 16.
 
Five out of the last six weeks of Labor Department data releases have shown drops in initial jobless claims, pushing down the four week moving average down by 6,750 to 338,500 for the week ending Nov. 16.
 
Continuing claims did rise by 66,000 to 2.876 million for the week ending Nov. 9, wiping out gains made the previous week.
 
 Moody's said that the drop in initial claims exceeded its analysts' expectations, although businesses continue to be reluctant to hire, in part because of uncertainty stemming from the next round of budget negotiations in Congress that are set to take place early next year (Economy.com Nov. 21).

Home Prices Rise In October Despite Weak Demand

 Permanent link
WASHINGTON (11/21/13)--Prices are on the rise, but it's not exactly a seller's market.

A diminished market supply pushed home prices up, but home sales continued to decline for the second month running in October, according to the National Association of Realtors.

Total existing home sales--completed transactions of single-family homes, townhomes, condominiums, and co-ops--fell 3.2% last month, to 5.12 million from 5.29 million in September.

The national median home price for all housing types clocked in at $199,500 in October, up 12.8% from October 2012--the 11th consecutive month of double-digit year-to-year increases.

Total sales were also higher on an annual basis by 6%. In October 2012, 4.83 million homes were sold.

Median time on the market was lower in October than it was the year before--down to 54 days from 71 days--but higher than the 50 days measured in September.

A major driving force behind the reduced stock of homes is the drop in distressed sales. Foreclosures and short sales accounted for 14% of all transactions in October--they constituted a quarter of all sales in October 2012. Total housing inventory at the end of October dropped on a monthly basis by 1.8% to 2.13 million.

The NAR said that despite historically low interest rates, credit remains "unnecessarily restrictive," with qualified buyers being denied loans. First-time buyers made up 28% of purchases in October, which is unchanged from September, but down from 31% in October the year before.

The biggest regional one-month drop in existing sales happened in the West, where the measure fell by 7.1%. In the Northeast, Midwest and South, existing sales dropped from September to October by 2.9%, 1.6% and 1.9% respectively.

FOMC Minutes: QE3 Easing A Possibility

 Permanent link
WASHINGTON (11/21/13)--Members of the Federal Reserve's policymaking body, the Federal Open Market Committee, said they would consider slowing the pace the Fed's bond-buying program "in the next few meetings," according to the FOMC minutes released Wednesday afternoon.
 
In their discussion of monetary policy at the Oct. 29-30 meeting, the committee noted that the economy had changed little since the September meeting, and all members but one judged that it would be wait for more evidence that the economy is improving before adjusting slowing the pace of its $85-billion-a-month program of buying back Treasuries and mortgage-backed securities, a policy known as quantitative easing, or QE3.
 
"They generally expected that the data would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months," the minutes said. "However, participants also considered scenarios under which it might, at some stage, be appropriate to begin to wind down the program before an unambiguous further improvement in the outlook was apparent."
 
In the view of one committee member the improvement in the economy indicated that the continued easing of monetary policy at the current pace was no longer necessary. Two other members commented that it would be important to continue laying the groundwork for a reduction in purchases through public statements and speeches.
 
Committee members generally expressed reservations about the possibility of introducing a rule that would adjust the pace of asset purchases automatically based on a single variable such as the unemployment rate or payroll employment, the minutes said.
 
The committee also considered whether to comment whether the effects of the temporary government shutdown had made economic conditions more difficult to assess, but determined that such comments might overemphasize the role of the shutdown in the committee's policy deliberations.
 

Discover To Provide Cardholders With Free FICO Scores On Bills

 Permanent link
RIVERWOODS, Ill (11/20/13)--Discover announced Tuesday that it will provide credit scores to its cardholders free of charge.
 
Card holders will have access to their FICO scores on their monthly bill, Discover Financial Services said in a statement. The Riverwoods, Ill.-based firm said that the new service starts today for "Discover it" card-holders and will be provided to other customers in the next few months.
 
Discover, which has the second-lowest default rate among big U.S. card-issuers, is the first major credit card provider to offer free FICO scores directly to customers. Barclaycard US and First Bankcard of Omaha announced that they would be offering free FICO scores to their customers earlier this month (News Now Nov. 6).
 
FICO, which was named Fair Issac Corp. when it was founded, tabulates consumer credit scores used widely by lenders to determine potential borrowers' credit worthiness.
 
Previously, consumers who wanted to know their FICO scores had to sign up for a free trial subscription. Applicants who were denied credit or received less than they had asked for would also be informed of their scores.

Builder Confidence Holds Steady in November

 Permanent link
WASHINGTON (11/19/13)--A home builders' trade association released data on Monday that shows industry confidence unchanged in November.
 
The National Association of Home Builders/Wells Fargo Housing Market Index this month held steady at a downwardly revised level of 54.
 
The November survey also showed an index of current sales conditions unwavering at 58, and measures of expectations for future sales and traffic of prospective buyers both dipping slightly by one point--to 60 and 42, respectively.
 
The index, broken down geographically, showed most fluctuation in the Midwest, where it dropped three points to 60. It did not change in the South or West, holding steady at 56 and 60, and increased by one to 39 in the Northeast.
 
NAHB executives said that the U.S. Congress' inability to come up with a lasting budget is undermining confidence in the industry.
 
The trade association has been conducting the survey--measuring builder perceptions of single family home sales and expectations for a half-year--for 25 years.

JP Morgan, Investors Agree On $4.5 Billion MBS Settlement

 Permanent link
NEW YORK (11/19/13)--JP Morgan reached a preliminary agreement on a $4.5 billion settlement with institutional investors who accuse the bank of misrepresenting 330 different mortgage-backed security trusts.

Representatives of the 21 investors said that they will back the deal, and will ask trustees--who can still ask a judge to approve of the settlement--to accept it. The terms of the settlement will be valid until Jan. 15, 2014, JP Morgan said in a Friday release.

The claims revolve around mortgage-backed securities sold by JP Morgan and Bear Stearns between 2005 and 2008. JP Morgan acquired Bear Stears in March 2008, as the firm flirted with bankruptcy.

Claims surrounding mortgage-backed security trusts sold by Washington Mutual--another institution acquired by JP Morgan amid the global financial meltdown, in September 2008--remain unsettled.

JP Morgan's recent spate of legal woes, alleged unethical practices and subsequent public image problems made headlines last week, when the bank launched a social media campaign that was hijacked and roundly mocked by social media users (News Now Nov. 15).

JP Morgan late Wednesday cancelled a Twitter live Q&A forum it had scheduled for Thursday under its #AskJPM Twitter hashtag when Twitter users began inundating the hashtag with the type of questions many banks--especially one that has been the target of several Justice Department investigations--wouldn't want to answer.

U.S. Industrial Production Unexpectedly Slips 0.1% In October

 Permanent link
WASHINGTON (11/18/13)--A key measure of economic activity fell slightly in October, according to the Federal Reserve.
 
U.S. industrial production fell by 0.1% last month, officials from the central bank said on Friday.
 
The drop defied some experts' expectations. Economists polled by Reuters had expected industrial production to grow by 0.2% (Reuters Nov. 15)
 
Fed officials pointed to declines in output at power plants and mines as the driving factor behind the dip, with Tropical Storm Karen forcing temporary shutdowns of offshore oil and gas extraction in the Gulf of Mexico. Output by mines and utilities fell by 1.1% and 1.6%.
 
The news was slightly better in the manufacturing sector, which saw output rise by 0.3% in October after a 0.1% increase in September. Gains were made despite the automobile industry decreasing its output for the first time since July (Economy.com Nov. 15). The latest data release also showed that manufacturing production was up by 4.4% at an annualized rate over the three months leading up to October.
 
The entire data set is used by Fed officials to set monetary policy, with higher output and capacity utilization indicative of inflationary pressure.
 
Industrial capacity utilization--a measure of firms' full employment of resources--dropped in October by 0.2% to 78.1%. Reuters said that the measure is 2.1% below its long-run average. Manufacturing capacity utilization increased by 0.1% to 76.2%.

JPMorgan Chase Pulls Social Media Q&A, Didn't Like the Questions

 Permanent link
NEW YORK (11/15/13)--While credit unions have seen great success with social media campaigns and Tweet Tuesdays such as Don't Tax My Credit Union,  that's not the case for one huge bank whose attempt to use social media backfired into a public relations nightmare.
 
JP Morgan Chase & Co. late Wednesday cancelled a Twitter live Q&A forum it had scheduled for Thursday under its #AskJPM Twitter hashtag when Twitter users began inundating the hashtag with the type of questions many banks--especially one that has been the target of several Justice Department investigations--wouldn't want to answer.
 
JP Morgan had tweeted at 10:16 a.m. Wednesday: "Tomorrow at 1pm ET $JPM Vice President Jimmy Lee takes over @JPMorgan to answer your questions for 1 hour. Tweet your Q early using #AskJPM" (Marketplace.org Nov. 14). The online forum was intended to give college students the opportunity to communicate director with a JPM senior executive (Bloomberg.com Nov. 14).
 
Instead, the hashtag drew ridicule from thousands of tweeters. It drew more than 6,000 responses from tweeters in the first six hours, according to Topsy, the social media tracking service. As of 10 a.m. ET Thursday, more than 24,000 posts, many with snarky comments.
 
When News Now checked the bank's hashtag just after 8 p.m. ET Thursday, comments were still pouring in. The hashtag had received at least 50 negative comments in the past 30 minutes. Comments included:
  • "I'm fairly certain your PR department failed to realize how much you are HATED";
  • "Are borrowers credit ratings, proof of income and assets used to evaluate loan risk or to determine how much you can steal?" and
  • "Is this the type of brilliant marketing idea that makes JPMorgan Execs so much richer and more highly valued than us commoners?"
 

Decline In Weekly Jobless Claims Signals Progress

 Permanent link
WASHINGTON (11/15/13)--First-time jobless claims in the U.S. continued to edge downward last week, said a report published Thursday by the Labor Department.

Jobless claims for the week ending Nov. 9 fell to 339,000 from a revised 341,000 measured for the week ending Nov. 2. It was the fifth consecutive week that first-time claims have decreased.

In another sign that the economy has gradually improved over the past few weeks, the four-week moving average of first-time jobless claims for the week ending Nov. 9 fell to 344,000 from 349,750. While the total number of people on jobless benefits was unchanged at 2.87 million, the four-week moving average of that measure decreased by 2,000--also to 2.87 million.

But economic woes persist. Layoffs have been at a two-year low recently, but businesses remain reluctant to hire (Economy.com Nov. 14).

Analysts insist that consumer expenditures, which account for about 70% of economic activity, are needed to boost growth and hiring in the fourth quarter (Bloomberg.com Nov. 14). And the four-week moving average of first-time claims in August--prior to the claims processing backlog in California caused by a change in computer systems, and the confidence-corroding partial government shutdown--the four week moving average of first time claims was 328,750.

Economists polled by Bloomberg made predictions about first-time claims that ranged from 325,000 to 350,000.

Weekly Mortgage Applications Retreat 1.89%

 Permanent link
WASHINGTON (11/14/13)--Data published on Wednesday indicate that the mortgage market receded for a second consecutive week as three key interest rates increased in unison for the first time in over two months.

But the industry's woes, as measured by the Mortgage Bankers Association, aren't as severe as initially feared. Wednesday's release showed that the MBA composite mortgage applications index decreased by 1.8% in the week ending Nov. 8.

Applications decreased by 2.8% the week ending Nov. 1--a decline that was initially measured at 7% before being revised downward this week (CNBC.com Nov. 13). Data from the week ending Nov. 1 were updated after the MBA found that purchasing and refinance activity, the two inputs of the composite index, fell by 0.7% and 3.9% respectively--the MBA initially said that the two measures had plunged by 5.2% and 7.9%.

For the week ending Nov. 8, purchase and refinancing activity was down by 0.5% and 2.3%, respectively, MBA said.

Contributing to the contraction of demand, 30-year fixed-interest mortgage rates, 30-year jumbo mortgage rates and five-year adjustable mortgage rates all increased by 12, 11 and three basis points, respectively. It was the first time since the week ending Sept. 6 that all three key MBA measures increased--a trend that could continue if markets believe that the Federal Reserve will slow its asset purchase program, said CNBC.com (Nov. 13).

Fed officials' recent remarks and stronger-than-anticipated non-farm payroll data released on Friday fueled fears that the central bank will act in such a manner, increasing the possibility that consumer financial markets will become more bearish over the next few months, CNBC.com said. Those anxieties are compounded by congressional budget negotiations and the threat of another partial government shutdown or debt-ceiling breach at the start of next year, and by weak post-recession wage and job growth (Economy.com Nov. 13),

The most recent data already show that housing market activity is historically lackluster. The four-week moving average of the MBA composite activity index was up by 7% over the past month, but down by 53.8% on an annual basis. Refinancing activity, at a 2.5-low, accounted for 66% of all applications.

National Activity Index For September Increases

 Permanent link
CHICAGO, Ill. (11/13/13)--A prominent measure of economic production increased slightly in September.
 
The Federal Reserve Bank of Chicago released its September National Activity Index data on Tuesday, showing a modest rise in the indicator to 0.14, up from 0.13 in August.
 
Production-related components of the index rose to 0.19 in September, up from 0.17 in August, while a subset measure of sales, orders and inventories was up to 0.05 from 0.04. Rounding out the composite index, a gauge of consumption and housing fell to -0.18 from -0.17, while a measure of employment held steady at 0.08 (4-traders.com Nov. 12).
 
The three-month moving average of the index also increased in September to -0.03 from -0.15, although the index remaining less-than-zero indicates that growth is historically sluggish. This was the seventh straight month that the moving average gave a negative reading, indicating that inflation should be modest over the next year (Moody's Economy.com Nov. 12).
 
The modest September gains, however, don't account for October's partial government shutdown. October's index will be released by the Chicago Fed on Nov. 27, two days behind schedule. September's findings were originally scheduled to be released on Oct. 21.
 
Some measures show that the shutdown had only a temporary effect on key components of the economy, although another round of congressional budget negotiations in early 2014 could hamper the aggregate demand, and labor and financial markets (Economy.com, Nov. 12).

Small Business Optimism Index Down 2.3 Points

 Permanent link
WASHINGTON (11/13/13)--Small business optimism fell to a seven-month low in October, reflecting a general economic malaise in the U.S. resulting from the partial government shutdown.
 
The National Federation of Independent Business said on Tuesday that its Small Business Optimism Index fell last month by 2.3 points to 91.6. The survey, which polls 1,940 business owners, was conducted amid the budget negotiation crisis in Washington that flirted with the sovereign debt default (Reuters via Chicago Tribune Nov. 12).
 
Seven of the confidence index's 10 components fell, while only three had dipped in September (FoxBusiness.com Nov. 12).  Small business owners expressed pessimism about future sales, job creation, capital and inventory expenditure plans, general economic outlook, sales, and credit availability (Moody's Economy.com Nov 12).
 
In addition to the 8% of index survey respondents who said they expected credit conditions to worsen,  6% of respondents said that "credit is harder to get" in a separate NFIB measure, fueling concerns that financial markets are suffering long-term consequences because of congressional dysfunction. With the U.S. Small Business Administration unable to service loans during the shutdown, loan volumes in October dropped 55% compared to what they were in October 2012, although they managed to edge toward 25% below the year-ago number measured at the end of the month (Economy.com Nov 12).
 
The Credit Union National Association has been urging Congress to allow credit unions to play a larger role in helping small businesses through member business loans (MBLs). The statutory cap on MBLs loans, as a proportion of credit union's assets, is currently 12.25%. CUNA says that raising the federal government-mandated ceiling to 25.5% would inject $13 billion into the economy, and help boost employment by 140,000 at no cost to taxpayers.

Key Measure Predicts Weak Inflation

 Permanent link
NEW YORK (11/12/13)--A key predictor of future inflation reached a new low this year in October.

The New York-based Economic Cycle Research Institute released data on Friday showing that its U.S. future inflation index fell to 99.5 last month, down from 100 in September. It's the first time in 2013 that the measure has dipped below 100 (Economy.com Nov. 8).
 
The ECRI's Weekly Leading Index, a gauge of future economic growth, fell in the week ending Nov. 1 to a three-week low of 131--down from 131.4 the prior week.
 
The independent research firm's annualized growth rate for the week ending Nov. 1 was 1.8%--up from 1.7% last week when the measure hit a 14-month low.

Average Mortgage Rate Edges Up To 4.16%

 Permanent link
WASHINGTON (11/12/13)--Freddie Mac reported Thursday that the average rate on 30-year fixed-rate mortgages rose to 4.16% for the week ended Nov. 1.
 
The increase was from the previous week rate of 4.10%, the lowest in four months.  For 15-year, fixed-rate mortgages, the average rate rose to 3.27% from 3.20%.  The average doesn't include extra fees, or points, that borrowers pay to get the lowest rates. One point equals 1% of the loan.
 
The average fee for a 30-year, fixed mortgage increased to 0.8 point from 0.7 point, while the fee for a 15-year mortgage stayed steady at 0.7 point.
 
Associated Press reported that rates have fallen since September, when the Federal Open Market Committee, the Federal Reserve's monetary policymaking group, went against expectations and decided not to taper off its quantitative easing policy of buying $85 billion each month in bonds (USA TODAY Nov. 7).  The QE3 policy is intended to keep the long-term rates lower.

Record Fannie Mae Profits Continue Amid GSE Debate(6)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(6)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Consumers Borrowed More And At CUs In September(6)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Record Fannie Mae Profits Continue Amid GSE Debate(5)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(5)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Record Fannie Mae Profits Continue Amid GSE Debate

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Consumers Borrowed More And At CUs In September(4)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Consumers Borrowed More And At CUs In September

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Record Fannie Mae Profits Continue Amid GSE Debate(1)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Consumers Borrowed More And At CUs In September(5)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Record Fannie Mae Profits Continue Amid GSE Debate(3)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(1)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(2)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Record Fannie Mae Profits Continue Amid GSE Debate(2)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Consumers Borrowed More And At CUs In September(2)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Record Fannie Mae Profits Continue Amid GSE Debate(4)

 Permanent link
WASHINGTON (11/8/13)--Fannie Mae reported $8.6 billion in comprehensive income for the third quarter of 2013, the seventh straight quarter in which the government-sponsored enterprise has reported a quarterly profit.

Fannie Mae said it will pay $8.6 billion in dividends to the U.S. Treasury. The GSE will have paid $114 billion in dividends to the Treasury when this latest payment is made. That is compared against a cumulative draw from Treasury of $116.1 billion.

Fannie Mae said it's positive results were due to continued stable revenues and credit-related income, which was supported by a significant increase in home prices in the quarter. The company expects to remain profitable for the foreseeable future.

The GSEs have been under government conservatorship since 2008.

The record Fannie Mae profits and resulting repayments do not appear to be slowing the pace of GSE reform efforts. A range of housing policy changes have been discussed by the U.S. House, Senate, and the Obama administration, including complete market privatization, limiting government market intervention, and several stops in-between.

One piece of House legislation, the Protecting American Taxpayers and Homeowners Act (H.R. 2767), would phase out Fannie Mae and Freddie Mac within five years and make other mortgage finance market changes. That bill may be considered by the full House.

The Senate Banking Committee is holding its own weekly housing hearings, and developing plans for a future housing finance market. The ranking committee Republican, Rep. Mike Crapo (Idaho), this week said a bill could be marked up soon.

One Senate bill, the Housing Finance Reform and Taxpayer Protection Act (S. 1217), was discussed by the committee in a hearing held this week. That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down Fannie and Freddie and replace them with a new mortgage guarantor.

In a discussion of the bill with Warner at the hearing, Credit Union National Association Chief Economist Bill Hampel, a witness, noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.

Credit unions do need access to the secondary market, and that access needs to be done right, Hampel added.

Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(4)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Consumers Borrowed More And At CUs In September(1)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Consumers Borrowed More And At CUs In September(3)

 Permanent link
WASHINGTON (11/8/13)--Consumers borrowed $13.74 billion more during September, and members also increased their borrowing at credit unions, according to the consumer credit report released Thursday by the Federal Reserve.  However, credit card use fell for a fourth consecutive month.
 
A Reuters poll of economists had expected overall borrowing to increase $12 billion after a revision of August's revised gain of $14.15 billion from the previously reported $13.63 billion increase (Reuters Nov. 7).
 
Overall U.S. consumer credit rose 5.25%, seasonally adjusted, during third quarter, with a 5.50% increase for the month of September. Outstanding credit totaled $3.051.7 trillion, compared with $3.038 trillion in August, said the Fed's report. 
 
At credit unions, members borrowed $262.5 billion overall, an increase from August's $259.9 billion and from third quarter 2012's total of $236.7 billion.
 
Revolving credit, which reflects use of credit cards, decreased at an annual 2.25% rate to $846.9 billion in September from $848.9 billion in August. That compares with $845.1 billion in third quarter 2012. The $2.06 billion drop is the fourth consecutive monthly decline, which could help explain the reduced consumer spending during third quarter, said Reuters (Nov. 7).
 
Bloomberg.com noted a pickup in household wealth from increased property values and stock market gains are contributing to the purchases of big-ticket items such as new cars. However,  limited job and income growth are prompting consumers to whittle away at credit card debt (Bloomberg.com Nov. 7).
 
At credit unions, members stayed steady in their credit card use. Revolving credit in September at credit unions totaled $41.1 billion, the same as in August, but those amounts are higher than the $38.1 billion borrowed in third quarter of 2012, according to the Fed's report.
 
Nonrevolving credit, which includes auto loans and student loans, rose at an annual rate of 8%,  or nearly $16 billion, to $2.205 trillion borrowed in September. That's up from $2.189 trillion in August and from $2.033 trillion in third quarter 2012.
 
At credit unions, nonrevolving credit rose to $221.4 billion in September, compared with $218.8 billion in August and $198.5 billion in third quarter of last year.

For the full report, use the link.

Job Cuts Slightly Up, But Unemployment Benefits Claims Down(3)

 Permanent link
CHICAGO (11/8/13)--Research about U.S. labor market activity reveals that data from October--a month marred by a partial government shutdown--contains a few silver linings as the holiday shopping season approaches.

A Chicago-based research firm found that the total number of job cuts increased slightly throughout the month. The survey, conducted by Challenger, Gray & Christmas, showed that the country's employers cut 45,730 jobs from the nation's payrolls--up from the 40,289 jobs cut in September.
 
But Labor Department data found that seasonally adjusted first-time unemployment insurance claims decreased by 9,000 for the week ending Nov. 2, down to 336,000 from an upwardly revised 345,000 the week before.
 
The four-week moving average of first time claims also dipped by 9,250 to 348,250.
 
Signs of long-term weakness in the labor market persist, however. Initial claims remained higher than they were at the end of the summer. Before the shutdown and a backlog of unprocessed claims that mounted in California after the state switched computer systems, weekly first-time claims hovered around 325,000 (MarketWatch Nov. 7).
 
Continuing claims also rose by 4,000 to a seasonally adjusted 2.87 million in the week ending Oct. 26.

Weekly Mortgage Applications Fall 7%

 Permanent link
WASHINGTON (11/7/13)--A prominent mortgage trade association's survey showed that mortgage market activity declined significantly last week.
 
The Mortgage Banker Association said that its Market Composite Index--a seasonally adjusted index of mortgage application activity--fell by 7% for the week ended Nov. 1.
 
The measure's two components, the refinance index and the purchase index, decreased by 8% and 5% respectively.
 
Mortgage refinancing constituted 66% of market activity for the week ending Nov. 1, down from 67% the week before (HousingWire Nov. 6).
 
The decline comes as the Federal Reserve indicates it might cut back this year on the $85 billion in treasury bonds and mortgage-backed securities that it's currently buying every month--a change that would occur sooner than previously anticipated (Reuters Nov. 6).
 
The index's Nov. 1 decline is the first one-week drop greater than 1% in months. Refinancing activity had driven growth in the measure throughout the partial government shutdown, anticipation of the gridlock and during market aftershocks in the wake of Congress' Oct. 16 agreement.

A four-week moving average gauge of refinance activity was up by 9.3% over the past month, but down by 56% on an annual basis. Purchase applications fell by 6.2% during the same time--down by 3.8% on an annual basis. A four-week moving average measure of purchase applications fell by about 18% over the past six months (Moody's Economy.com Nov. 6).

FICO: Lenders Can Share Free Credit Scores On Account Statements

 Permanent link
SAN JOSE, Calif. (11/6/13)--A major consumer credit rating agency announced Monday that it's partnering with lenders to make its credit scores available for free.

FICO, an analytic and decision management company, said that it will work with Barclaycard US and First National Bank of Omaha to publish credit card customers' scores in their digital and paper account statements.

The revelations will also offer context, with the banking partners providing cardholders with the top two components of the rating influencing their overall scores.

The initiative, called FICO Score Open Access, comes as regulators press lenders to be more forthright with customers.

Previously, consumers could pay to receive scores on MyFICO.com. Individuals whose applications for credit are rejected also receive their FICO scores.

But not all lenders use FICO scores when rating customers' creditworthiness. A 2012 Consumer Financial Protection Bureau study found that 25% of educational credit scores sold to customers were "meaningfully different" from credit scores used by financial institutions (American Banker Nov. 4).

FICO, a unit of Fair Isaac Corp., calculates consumers' credit scores using payment history, outstanding debts, length of time with credit, new credit applications, and types of credit currently being used, with the first two factors being the most influential.

Google Wallet Seeks To Bypass Mobile Carrier Security

 Permanent link
MOUNTAIN VIEW, Calif. (11/6/13)--Google has found a loophole in telecommunications security that will allow Android users to employ Google Wallet when making electronic payments.
 
 The feature, which will be available on the new Android operating system KitKat 4.4., is called Host Card Emulation. It was announced this week in a company blog post detailing the operating system.

"With HCE, any app on an Android device can emulate an NFC [Near Field Communication] smart card, letting users tap to initiate transactions with an app of their choice--no provisioned secure element in the device is needed," the tech giant said.

Google said the transactions are secure, describing the new feature as giving the user a choice at cash registers by connecting to a chosen application through unique identifiers.
 
"The app reads the transaction data and can use any local or network-based services to verify and then complete the transaction," the post claims.

Most cell phone carriers have refused to allow Google Wallet onto its devices in the past (American Banker Nov. 4).

Poll: Most Consumers To Cut Back On Holiday Purchases

 Permanent link
WASHINGTON (11/5/13)--The vast majority of consumers surveyed still plan on spending either less than they did last year or nothing at all this holiday season, according to a poll from the National Foundation for Credit Counseling.

Of the 1,400 people polled, 86% said they intend to either spend less or nothing. That compared with 87% of respondents in 2012, and with 91% of those queried in 2010 and 2011.

Eleven percent said they intend to spend the same amount as last year, and 3% said that they plan on spending more.

The NRCC launched the survey in 2010, about a year after the recession officially ended.

On Nov. 27, the Credit Union National Association and the Consumer Federation of America will release their 14th annual joint survey on consumer holiday spending expectations.

Last year, the CUNA/CFA survey showed that the percentage of consumers who said they would spend more than last year rose from 8% to 12%. The proportion of those who said they would spend less declined from 41% to 38%. The groups' survey was cited in news media around the world (News Now Nov. 26, 2012).

Measure Of Future U.S. Economic Growth At 14-month Low

 Permanent link
NEW YORK (11/4/13)--A prominent measure of future economic growth in the U.S. was at a 14-month low at the end of October.

The New York-based Economic Cycle Research Institute said on Friday that its weekly leading index grew by only 1.7% for the week ending Oct. 5--a downturn of 2% from the prior week, and the measure's smallest increase since August 2012 (4-traders.com Nov. 1).

The index's smoothed annual growth rate dropped below 1.7% for the first time in 2013. It peaked at 8.8% earlier this year.

The last week before the partial government shutdown--the week ending Sept. 27--ECRI reported that the annualized index was at 4.6%. During the impasse, it declined by about a percentage point a week, and has continued to slide at a slower pace since.

Over the entire month of October, the weekly leading index grew by 1.6%, down from 4.5% in September.

Weekly Jobless Claims Drop By 10,000

 Permanent link
WASHINGTON (11/1/13)--Jobless claims fell by 10,000 to 340,000 for the week ending Oct. 26, according to the Labor Department.

The claims numbers are only slightly higher than what economists predicted, with the key labor market measurement settling after turbulence caused by the federal shutdown and administrative changes in California.
 
A median of 49 economists surveyed by Bloomberg predicted that jobless claims last week would be 2,000 lower than the Labor Department's figures. Economists polled by Reuters forecast that first-time applications would be 1,000 lower (Bloomberg.com and Reuters Oct. 31).
 
Continuing claims for the week ending Oct 19--the most recent Labor Department data available--rose 31,000 to 2.88 million, an increase of about 60,000 since the week ending Sept. 14.

The four-week moving average of continuing claims, a more stable measurement of joblessness, has only increased by 40,000 in that time (Economy.com Oct. 31). Last week, the four-week moving average of first-time claims rose by 8,000.

Federal furloughs are accounted for outside the Labor Department's unemployment insurance claims figures, but the department estimates that the federal shutdown added to around 15,000 private sector claims applications during the first week of the shutdown (Economy.com Oct. 31). The extent to which that is the case will be more apparent after the Bureau of Labor Statistics releases its October jobs numbers on Nov. 8.

A Labor Department spokesperson also pointed out that no claims from California last week came from the backlog caused by a change in the state's computer systems.