On Monday the Empire State Manufacturing Survey was released. Amidst a report that shows continued manufacturing growth in the region came this assessment from the document: "Future indexes conveyed an expectation that activity and employment would improve in the months ahead and that both input and selling prices would increase significantly."
Also on Monday, UPS announced that it will hire up to 50,000 temporary workers this season to handle increased holiday shipping activity. Shipments are up this year over next and temporary hiring levels are back to those of the 2007 holiday needs.
On Thursday the Philadelphia Federal reserve released its business outlook survey. It's report proclaimed that: "the overall level of employment was mostly steady this month, and the average work hours index was positive for the first time in more than two years."
Also the government released its jobless claims report for the Nov 14 week. It showed that the four-week average of initial claims for unemployment fell 6,500 to 514,000, down for the 11th straight week.
These four reports are yet more data to support the claim of jobs growth by Christmas-time.
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GNE,
ReplyDeleteI'd like you thoughts on the dearth of credit for corporate transactions. We see very little easing of credit for leveraged transactions. When do you think the banks will start lending again? Are they more interested in keeping their balance sheets full of the TARP cash?
Bill,
ReplyDeleteI am not sure I completely understand your definition of "corporate transactions." In fact if you are referring to "US Domestic Debt Sold to corporations, the data shows that there is no longer a dearth. See the chart here:
http://www.bloomberg.com/apps/cbuilder?ticker1=USFICORP%3AIND
If you look at the 3 or 5 year view, you can clearly see "the freeze" of transactions from July to mid-November of last year, but quickly thereafter you'll note a return to seasonal levels since then.
Perhaps I am misunderstanding your definition of corporate transaction?
With respect to total credit across all commercial banks, I find that the following the data in this fed chart to be most helpful. You can see the recent dip, but note a small tail UP just recently.
GNE,
ReplyDeleteI meant credit for mergers and acquisitions. If you look at the legal periodicals, you'll see lots of reports of deals that die because companies can't get financing for the transactions. I'm wondering if the flight to T-Bills and hence negative returns is a sign that banks believe they need to keep a large cash balance.
Bill,
ReplyDeleteI think that some banks may continue to hoard cash, but I do think risk appetite is now on the increase. If your particular banks don't start loosening the strings -- the money from the sidelines will come from other quadrants. In particular, IPOs and shelf registrations are on the increase and in terms of the total corportate M&As that are actually closing since the beginning of the year, I believe you should be seeing an uptick.
My best advice for consumers and corporations whose banker is not lending... find another bank... in this climate you *will* find a banker to get the deal done... it just might not be the banker, VC, or mezzanine gal you are use to doing business with... and (un)fortunately that probably is a good thing.