Job Openings Rise Near 14-Year High In November Job openings rose to their highest level in nearly 14 years at the end of November, the Labor Department said on Tuesday.
Openings rose to a seasonally adjusted level of 4.97 million in November, their highest level since January 2001, according to the Labor Department’s monthly Job Openings and Labor Turnover Survey, known as Jolts.
The number of openings rose 27% from a year earlier and stood 15% above the level from December 2007, when the last recession officially began.
The uptick in workplace openings meant that there were around 1.8 unemployed workers in November for every opening, the lowest ratio in almost seven years. At the worst point in the recession, there were nearly seven unemployed workers for every available job opening.
The number of workers who voluntarily left their jobs also edged down after hitting a six-year high in September. The number of workers who have quit their jobs, which economists view as a sign that workers are more confident in the health of the economy, rose 8% over the year ended November.
Aetna to Boost Incomes of Lowest-Paid Workers Big health insurer to increase pay of lowest-paid employees to draw top prospects, highlighting debates over compensation at bottom of wage scale.
Around 12% of Aetna’s domestic work force will see a raise to a floor of $16 an hour, primarily employees in customer service and billing-related jobs. Aetna, which also said it will cut health-care costs for many of the same employees next year, follows Gap Inc.,Starbucks Corp. and others in raising the lower limit on workers’ wages. (…)
Aetna said it appeared that none of the approximately 5,700 workers set to benefit, who include part-timers, are currently making the minimum wage in their localities. Starting this April, their hourly wage will be raised to $16, an 11% increase on average but an increase of as much as 33% for some workers.
Next year, the company will also let workers with household income below a certain threshold choose health coverage with lower out-of-pocket charges without paying more in monthly premiums, a shift it said could save a worker with a family as much as $4,000 a year. The company said that as many as 7,000 employees may be eligible. Like a growing number of its employer clients, Aetna offers only high-deductible plans to employees. (…)
Starbucks, which has for years boasted of better-than-average wages and benefits, said this past fall it would roll out pay increases for its 135,000 U.S. baristas and shift supervisors. About half saw the raise in the paychecks they received Friday, and the rest will see it this week.
Early last year, Gap said it would raise the minimum wage it pays U.S. store employees after six months of work to $9 by midyear and to $10 this coming June. The move was expected to raise pay for about 65,000 of the company’s 135,000 U.S. employees.
And this chart from NBF:
RAIL FREIGHT BOOMING
From the AAR:
- Seasonally adjusted U.S. rail carloads were up 3.8% MoM in December 2014.
- Carloads rose 8.9% YoY in December 2014, the biggest YoY monthly percentage increase in four years.
- Weekly average carloads in December 2014 were the highest for any December since 2007.
- Excluding coal and grain, U.S. rail carloads were up 8.6% YoY in December 2014. Carloads of industrial products, an aggregate of a variety of industrial commodities, were up 11.7% YoY in December 2014.
- Motor vehicles and parts jumped 12.8% and petroleum and petroleum products up 10.3%. (BTW, Canadian carloads of petroleum and petroleum products were up
12.2% YoY in December 2014). - Intermodal traffic rose 3.7% YoY in December 2014 but declined 2.3% s.a. MoM. Average weekly intermodal volume of 237,673 in December 2014 was the second highest for December on record (slightly behind December 2013).
Mortgage Applications Increase by 49 Percent, Largest Weekly Gain Since November 2008
Mortgage applications increased 49.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 9, 2015….
The Refinance Index increased 66 percent from the previous week to the highest level since July 2013. The seasonally adjusted Purchase Index increased 24 percent from one week earlier to the highest level since September 2013.
OIL
US oil production to rise
The US Energy Department said output would rise by 600,000 barrels a day this year to 9.3m b/d and by 200,000 b/d to 9.5m b/d in 2016.
The projected increase for this year is slightly lower than a previous a forecast in December, reflecting the pressure of lower crude prices on the US oil industry.
Suncor Energy Cuts Capital Spending Suncor Energy is reducing its 2015 capital-spending program in response to lower crude-oil prices, but it is moving forward with major oil-sands and other expansion projects currently under construction.
The Calgary-based company now plans to spend up to C$6.8 billion on capital projects this year—the same amount as in 2014—not up to the C$7.8 billion it had announced in November. Suncor also plans to cut operating expenses by C$600 million to C$800 million over the next two years.
It said projects under way such as the C$13.5 billion Fort Hills oil-sands mine in Alberta and the Hebron oil field off Canada’s east coast, will move forward as planned and take full advantage of the current economic environment. These long-term growth projects are expected to come online in late 2017.
Suncor’s guidance for production this year of 540,000 to 585,000 barrels of oil equivalent a day remains unchanged. That is above the 525,000 to 570,000 barrels of oil equivalent it planned to produce in 2014.
The company has said its average production costs are just $30 per barrel from its existing operations.
While the international game of chickens rages on, things are not so smooth in OPEC’s own poultry yard:
(…) In addition to Iranian and Venezuelan mumblings, an internal price war appears to be in full swing as members seek to undercut one another. Last week The United Arab Emirates followed both Kuwait and Iraq in lowering prices in the Asian market to below those offered by Saudi Arabia. While UAE’s Murban OSP has traditionally been priced on average 15 cents higher per barrel than its Saudi Arabian counterpart Extra Light OSP, the trend has been reversed over the last twelve months as OPEC’s fifth-largest producer expands output year-on-year, targeting 3.5 million barrels per day by 2017. Whether the cartel can survive the current storm intact is anyone’s guess, but news such as this will be welcomed by struggling producer nations the world over, not least of which is Russia. (Oilprice.com)
China’s imports of oil hit record
China imported 7.15m bpd in December, bringing its full-year crude imports to a record 308m tonnes up nearly 10 per cent on the year. Some of that additional demand reflects economic growth and new refineries coming on line but most is probably going into tank farms, according to market watchers.
Over the course 2014 Chinese crude imports averaged 6.2m b/d, up 530,000 b/d or 9.6 per cent on 2013, when the growth rate was 5 per cent. (…)
New commercial storage facilities plus an estimated 101m barrels of new strategic petroleum reserves (SPR) operated by the country’s three state oil companies will lift China’s crude demand by about 150,000 b/d in 2015, according to estimates by Argus Media. In 2014, China is reckoned to have added 100m barrels to its stockpiles.
Copper Sinks on Selloff in Asia Copper prices collapsed to a 5½-year low as investors in Asia sold heavily.
The heavy selling in the East seems to have been largely driven by investors that opted to unwind bets in the copper market to prevent further losses. Once copper fell below the level of $6,000 per tonne on Tuesday, it sparked a wave of selling as investors scrambled to close out those positions. (…)
The World Bank compounded all these fears by cutting its global growth forecast to 3% for 2015, down from an earlier estimate of 3.4%. The bank specifically cited concerns over a “disorderly slowdown” in China. (…) China is undergoing a “carefully managed slowdown” with growth slowing to 7.1% this year, from 7.4% in 2014. It said the slowdown in Chinese property and land sales will prevent the national and local governments in China from boosting growth by investing in infrastructure. (…)
Base metals across the board were heavily down. Aluminum was down 0.8% at $1,777.00 a ton, zinc was down 2.6% at $2,027.00 a ton, nickel was down 3.2% at $14,185.00 a ton, lead was down 3.0% at $1,774.50 a ton, and tin was down 1.3% at $19,275.00 a ton.
CHINA HOUSING
China housing sector is the source of many bearish scenarios. This reassuring report is from CEBM Research December survey:
Nationwide new house turnover held its strong momentum in December. Although overall inventory level was still high, transaction turnover continued to rise given improving buyer sentiment. The trend was most evident in first tier cities: absorption rates for newly launched residential projects in Beijing, Shanghai and Shenzhen was above 90%. For lower tier cities, although sales improvement was not as strong as that in first tier cities, performance kept its momentum in November and was in line with developers’ expectations. Boosted by the favorable macro policy environment and developers’ high motivation to drive up sales in December, property sales are likely to keep strong recovery momentum in January.
Housing prices in first tier cities are firming. Bolstered by rising transaction and warming sentiment, new housing sales in first tier cities were pushing on smoothly and housing prices in the largest four cities continued to rise slightly in December. For lower tier cities, prices kept at their current levels, with inventory reduction remaining developers’ top priority.
Sales of existing homes have been improving significantly and upgrade demand is rising. Sales of existing homes continued to improve in December and grew by 15% M/M. Sales momentum of existing homes is especially strong in first tier cities such as Beijing, Shanghai and Guangzhou. In terms of demand structure, the percentage of home buyers who are looking to upgrade is rising. Thanks to the new mortgage easing policy issued on September 30th, pent-up upgrading demand is being gradually released and is expected to drive sales further.
Asking prices for existing homes are firming but are unlikely to surge. On the supply side, listing volume for second-hand homes is decreasing while listing prices are increasing. Since the market is showing signs of improvement on the back of several favorable policies, home owners are adopting a “wait-and-see” attitude and are expecting higher prices after the implementation of these policies. However, prices are not likely to experience a major surge in the short term given that it’s still a buyer’s market.
Banks’ mortgage policies are further easing. Qualifying for a mortgage rate discount is becoming easier and discount rates are turning more favorable for home buyers. In Beijing, Shanghai, Guangzhou and Shenzhen, banks that have not eased mortgage rates and policy for some time have now started to ease more aggressively. For example, among the eight banks that adjusted mortgage rates in Shanghai, three lowered their rates for first home buyers and one resumed its home mortgage business after having stopped issuing mortgages for some time.
Eurozone Industrial Output Rises
The European Union’s statistics agency said on Wednesday that production by factories, mines and utilities during November was up 0.2% from October, although down 0.4% from the same month in 2013. Eurostat also raised its estimate for the increase in production during October to 0.3% from 0.1%.
The rise in output occurred despite a second straight month of substantial declines in energy output, which fell 0.9% from October, having dropped 0.8% in that month.
That decline was more than offset by a 1.9% rise in the manufacture of durable consumer goods, and a 0.5% rise in the manufacture of nondurable consumer goods. It was the second straight month in which consumer goods production rose significantly, and likely reflects the increased capacity of households to spend on other goods and services as oil prices, and energy costs more generally, decline.
Three consecutive positive months! Consumer goods production seemingly booming!
ECJ Adviser: ECB Can Buy Eurozone Government Debt An adviser to the European Court of Justice said the European Central Bank can legally buy eurozone government debt, a key endorsement for the ECB as it prepares another round of stimulus measures.
The opinion from the European Court of Justice’s advocate general, Cruz Villalon, comes in response to a lawsuit brought by German opponents of loose monetary policy claiming that the ECB’s Outright Monetary Transactions program, announced in August 2012, violates the European Union treaty. While the opinion isn’t binding on the court, the judges usually follow the advocate general’s reasoning. A ruling is expected in four to six months.
Draghi Says ECB Determined to Fulfill Mandate, Zeit Reports Mario Draghi signaled that the European Central Bank is ready to buy government bonds to revive euro- area inflation, according to German newspaper Die Zeit.
“All members of the Governing Council of the ECB are determined to fulfill our mandate,” the ECB president said in an interview published today. “Naturally, there are of course differences over how that should be done, but there aren’t endless possibilities.”
Hmmm…Chart:
Watch The Watch
Make your bet (chart from U.S. Funds):