More Americans Feel Comfortable Quitting Their Jobs, Survey Finds Seeking better prospects elsewhere, a growing number of unemployed Americans voluntarily quit their last jobs, according to a new poll.

A Harris Poll of 1,553 unemployed individuals found that nearly one-fifth decided to quit their jobs, apparently buoyed by the improving economy and reports of a warming labor market. The poll was conducted in April and commissioned by staffing firm Express Employment Professionals.

A similar poll last year found that 15% of respondents had quit their last job. The out-of-work individuals who reported they were laid off dropped to 28% this year from 36% last year.

To be sure, the survey represents a small sample of the total unemployed in the U.S., but  government data also suggests more workers are quitting. The most recent Labor Department job openings and labor turnover survey, released on May 12, found that the number of voluntary quits rose to 2.8 million in March from 2.7 million in February. March’s figures also represent a boost from the 2.4 million quits recorded in March 2014.

Despite reports of a hot labor market in fields like engineering and architecture, people who leave their jobs may be surprised by what they find on the job hunt, said Express chief executive Robert Funk. Demand for workers in highly skilled roles–IT workers, for example, or those in accounting–is high, but the demand for candidates in jobs that require fewer skills remains tepid, he said.

“We’re really in a tale of two economies right now,” Funk said. Overall, demand for workers is “bubbling along,” he added. “It’s not robust, except in these skilled areas.” (…)

Home Building Surges to Best Pace Since 2007

U.S. housing starts rose 20.2% from a month earlier to a seasonally adjusted annual rate of 1.135 million in April, the Commerce Department said Tuesday. That was the highest reading since November 2007, and the biggest percentage increase since February 1991. New applications for building permits, a bellwether for construction in coming months, increased 10.1%.

Tuesday’s report showed new-home construction rose 4.9% in March from the prior month, compared with an initially reported 2% increase.

The increased activity was broad-based. Starts on single-family units, which exclude apartments and represent almost two-thirds of the market, climbed 16.7%, the most since January 2008. Multifamily units, including apartments and condominiums, rose 27.2%.

Housing starts in the Northeast, the region hardest hit by snowstorms this winter, increased 85.9%, after doubling in March. Housing starts in the Midwest climbed 27.8%, and home building in the West increased 39%, the biggest increase since December 2010.

From a year earlier, housing starts were up 9.2% in April while permits rose 6.4%. (Chart from Bespoke Investment)

New Luxury Rental Projects Add to Rent Squeeze

Of 370,000 multifamily rental units completed from 2012 to 2014 in 54 U.S. metropolitan areas, 82% were in the luxury category, according to CoStar Group Inc., a real-estate research firm. The firm defines luxury buildings as those that command rents in the top 20% of the market. In some places, including Denver, Tampa, Baltimore and Phoenix, virtually all new apartment construction has been targeted to high-end renters. In Atlanta, about 95% of new apartments have been in the luxury category.

“I don’t believe there ever has been a time where we have produced so much luxury rental housing,” said Susan Wachter, professor of real estate at The Wharton School of the University of Pennsylvania. While these new buildings are priced for the affluent, many middle-class and young workers are straining to rent the units, in part because they have few others choices.

What’s more, rents in new apartment buildings are commanding a far bigger premium over older buildings than during past construction booms. According to MPF Research, a division of RealPage Inc., apartments completed a decade ago on average commanded rents that were 9% higher than older buildings. But new apartments delivered since 2010 have fetched a 21% premium over existing rental stock. In the Atlanta area, the premium for a new apartment is 39% compared with 2% a decade ago. (…)

Japan GDP Growth Is Fastest in a Year GDP grows annualized 2.4% in first quarter on household, business spending

Real gross domestic product, the broadest measure of economic activity, grew by an annualized 2.4% between January and March, the government said Wednesday, much stronger than a revised 1.1% in the October-December period. It also beat a 1.5% growth forecast by economists surveyed by The Wall Street Journal. (…)

Inventories contributed 0.5% percentage point to overall quarterly growth of 0.6%. Without that, annualized growth for the first quarter would have been just 0.4% rather than 2.4%.

Household spending rose 0.4% from the previous quarter, higher than the 0.2% increase forecast by economists. Residential housing investments grew 1.8%, the first increase in four quarters.

Helped by the yen’s weakness—a result of the Bank of Japan’s aggressive easing policies—exports continued to rebound, expanding 2.4% from the previous quarter —contributing 1.8 percentage points to the 2.4% seasonally adjusted annualized growth rate.  As corporate profits swelled, capital spending rose 0.4%, marking the first increase in four quarters.

Eurozone Construction Rose in First Quarter

The European Union’s statistics agency said last week that the eurozone economy grew at a quarter-to-quarter pace of 0.4% in the first three months of the year, a slight acceleration from the final three months of 2014.

Figures released by Eurostat on Wednesday suggest construction helped boost growth during that period, recording a 0.8% rise in March from February, and a 0.3% increase between the fourth quarter of last year and the first of this.

In reality, construction activity remains very spotty. It is up only 0.9% since November 2014 (+2.2% annualized) essentially due to buoyant activity in Germany. Last 3 months at annual rates: Germany +9.1%, Spain –10.0%, France –5.3%, Italy –2.4%.

ZEW Makes Sharp Backtrack As German Job Growth Slows

The German ZEW index for May shows a step back in the current index and a sharp drop in expectations. The expectations reading fell by 11.4 points in May, marking it as a drop that has been larger only 13.5% of the time. The current index fell by a more modest 4.5 points. The drops leave the current ZEW index in about the top 10% of its queue of data historically; still an exceptionally strong reading despite the month’s set back. However, the expectations index has fallen to a position where it has been higher 42% of the time. This is still above its median value and is still a `constructive’ level. However, the new level marks a much less robust standing for expectations than before.

Blowing the Froth Off Tech Earnings The widening gap between reported and pro-forma earnings at companies like Facebook, Twitter and LinkedIn adds weight to fears of a new tech bubble.

(…) All public U.S. companies must report earnings based on generally accepted accounting principles. Many tech companies also present a second set that exclude certain charges, most significantly stock-based compensation. Such pro forma earnings were the targets of regulatory reform in the early 2000s after companies focused too heavily on them, obscuring actual results.

Tech companies today appear to be following revamped rules. But many are again trying to get investors to see the world through rose-colored glasses—and in some cases adding new pro forma wrinkles. Analysts, meanwhile, are dutifully playing along, typically basing estimates on these figures.

At many companies, the difference between pro forma and reported earnings has been considerable of late. Over the past four quarters, Facebook’s reported net income was equal to 56% of its pro forma measure. At Twitter, pro forma earnings over that period were 22 cents a share versus a reported loss of 98 cents. LinkedIn was similar: Its reported loss of 36 cents shifted to earnings of $2.21 on a pro forma basis. In each case, stock-based compensation accounts for most of the difference.

Now, though, many tech companies are pushing the pro forma envelope even further. Facebook, for example, doesn’t just exclude its stock-options expense from its pro forma earnings; it also keeps out payroll-tax expenses related to such compensation.

But these payroll taxes are only a loosely related cost and are incurred over a different time period than share-based compensation expense. The latter is a noncash expense arising from the granting of stock-based awards to employees during the financial reporting period. Payroll taxes are a cash expense based on the taxable income of the employee, typically withheld at the time options are exercised.

The expense is relatively small, amounting to 2.7% of Facebook’s operating income in the first quarter. But it points to the lengths tech companies are going to gild the pro forma lily.

Some in the tech world try to justify all this with timeworn arguments that doling out stock options is an equity event, not an operating expense, and so should be excluded from earnings. Yet that flies in the face of Silicon Valley reality: Awarding shares as compensation is a regular cost of doing business and attracting talent. (…)

S&P provides both “operating” and “as reported” EPS. On a trailing 12-month basis, Tech company “operating” EPS are 3.4% higher than “as reported” EPS in Q1’15, up from 2.5% and 2.3% in Q4’14 and Q3’14 but down from 4.2% in the previous 2 quarters. Granted, for Q1’15 alone, the ratio is 8.7%, up from 5.7% in Q4’14.