Small Business Optimism Index at Near Record Level

Small Business Optimism Index continued record streak in May

Small Business Optimism Continues Remarkable Surge

Small business confidence shot up to near record levels last November and is still flying high, according to the latest National Federation of Independent Business (NFIB) Index of Small Business Optimism.

“The remarkable surge in optimism that began last year right after the election shows no signs of slowing down” said NFIB President and CEO Juanita Duggan. “Small business owners are highly encouraged by the President’s regulatory reform agenda, and they remain optimistic there will be tax reform and health-care reform. This is a policy-driven phenomenon.”

The Index for May matched its strong performance in April of 104.5. That means the Index has been at a historically high level for six straight months. Five of the Index components posted a gain, four declined, and one remained unchanged.

NFIB Small Business Economic Trends Report, May 2017

NFIB Small Business Economic Trends Page

May Employment Report: +138,000 Nonfarm Jobs, 4.3% Unemployment Rate

THE EMPLOYMENT SITUATION -- MAY 2017

Total nonfarm payroll employment increased by 138,000 in May, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and mining.

Household Survey Data

The unemployment rate, at 4.3 percent, and the number of unemployed persons, at 6.9 million, changed little in May. Since January, the unemployment rate has declined by 0.5 percentage point, and the number of unemployed has decreased by 774,000

Establishment Survey Data

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months. In May, job gains occurred in health care and mining.

BLS Employment Situation Summary

Peter Schiff: Fed Has No Exit Strategy!

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Peter Schiff

Bernanke Almost Comes Clean On "Exit" Strategy

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The Real Fiscal Cliff: How to Spot the Ledge

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Peter Schiff

The Real Fiscal Cliff: How to Spot the Ledge | Peter Schiff

Archived from the live Mises.tv broadcast, this lecture by Peter Schiff was presented at the Mises Circle in Manhattan: "Central Banking, Deposit Insurance, and Economic Decline." Includes an introduction by Llewellyn H. Rockwell, Jr. Music by Kevin MacLeod.

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Peter Schiff: Fed Chair Bernanke Throws US Dollar Over the Currency Cliff!

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Peter Schiff

Ben Bernanke Throws the Dollar Over the Currency Cliff

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USA Small Business Outlook Retreats As Election Looms

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U.S. Small Business Outlook Retreats As Election Looms

PNC Survey Findings Show Decline in Hiring, Expectations; Majority Say They Are Not 'Better Off'

PITTSBURGH, Oct. 4, 2012 /PRNewswire/ -- A soft outlook on sales has only one in four small business owners planning to hire in the next six months as business optimism retreats ahead of next month's presidential election, according to the latest findings of the PNC Economic Outlook.

The fall findings of PNC's biannual survey, which began in 2003, show a decline in owners' expectations for sales and profits as the lackluster economic recovery struggles to gain steam. Business owners have less optimism about their local economies and are significantly more negative on the national level compared to last spring. Despite this dip in sentiment, owners remain more upbeat than this time last year, when optimism hit near-historic lows.

"The pace of the U.S. economic and jobs recovery remains disappointing," said Stuart Hoffman, chief economist at PNC. "Despite significant headwinds like the deepening recession in Europe and impending 'fiscal cliff,' the hiring plans and business outlook reflected in this survey are just enough to keep the modest recovery persistent into 2013."

Are You Better Off?
One out of two (48 percent) owners say they are currently "worse off" compared to 2007, when the recession officially began, while only 26 percent claim they are "better off." When asked how they have adapted to survive in the new economic environment, more than two-fifths (42 percent) said they seek greater productivity or efficiency from their employees, and one-third (33 percent) have reduced or consolidated their operations since 2007.

Highlights: Sales, Profits and Hiring Take a Hit
 The survey, which gauges the mood and sentiment of small and medium sized business owners, found that only 46 percent expect their sales to increase in the next six months, significantly lower than last spring (58 percent). Profits are also expected to be lower, as only 38 percent expect an increase compared to 43 percent in the spring. Only 23 percent expect to add new employees, lower than in spring (28 percent) but still higher than a year ago (20%).

Other findings about the next six months include:

* Optimism is Fading: Six in 10 (57 percent) are now pessimistic about the national economy over the next six months, up from just 43 percent in the spring. Seven out of 10 (69 percent) are pessimistic about the global economy over the same period.

* Capital Spending Declines: Only 58 percent plan to spend on capital investments in the next six months, down significantly from 70 percent last spring. Spending on technology equipment remains the top priority.

* Loan Demand Flattens: Less than one-fifth (19 percent) will probably or definitely take out a new loan or line of credit in the next six months, compared to 23 percent last spring. Nearly one in three (30 percent) have no current need for credit, a major increase from 13 percent last spring.

* House Prices Rebounding: In a dramatic turnaround from the past five years, two-fifths (37 percent) expect home prices in their local market to rise in the coming year, while only 13 percent expect them to drop. A year ago those numbers were almost exactly reversed (14 percent expected a rise, 32 percent expected a drop).

* Healthcare Hurts Hiring...: More than two-fifths (42 percent) believe the Supreme Court ruling to uphold the Affordable Care Act will negatively affect their hiring plans in the coming year.

* ... But More Federal Action Could Help: Nearly two-thirds (63 percent) think Federal action following the election will positively influence their hiring plans, with reduced regulations the top choice and reduced government spending a close second.”

The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Follow @PNCNews on Twitter for breaking news and announcements from PNC.

Methodology
The PNC Economic Outlook survey was conducted between July 23 to September 10, 2012, by telephone within the United States among 1,697 owners or senior decision-makers of small and mid-sized businesses with annual revenues of $100,000 to $250 million. The results given in this release are based on interviews with 506 businesses nationally, while the remaining interviews were conducted among businesses within the states of Florida, Georgia, Illinois, Indiana, Michigan, New Jersey, North Carolina, Ohio and Pennsylvania. Sampling error for the national results is +/- 4.3 percent at the 95 percent confidence level. The survey was conducted by Artemis Strategy Group (www.ArtemisSG.com), a communications strategy research firm specializing in brand positioning and policy issues. The firm, headquartered in Washington D.C., provides communications research and consulting to a range of public and private sector clients.

U.S. Small Business Outlook Retreats As Election Looms

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America: Land of Indefinite Corporate Power, Debt, Detention, Quantitative Easing, Wars

Ah yes, America, the Land of the Fee and  Home of the Grave. Big Brother wages perpetual war to keep the masses rooting for him while the national security and surveillance state ramps up and comes down on you, your family, friends, neighbors, and fellow Americans. Ahead is not only a Fiscal Cliff, but a Day of Reckoning - not more and more exciting TV shows, celebrity news, and 'all is well' corporate mass media coverage. The Matrix has plans for you and your best interests are not in their equation.

You and your descendants will be expected and forced to pay up in taxes, fees, and inflation. Your discretionary income will continue shrinking - but not for the Wall Street Banksters, corporate elite, and politicians wealthy from bribes. They are exempt from paying up by design. You pay, they play. The tab per American citizen (man, woman, child) for the funded USA debt is $51,038 and your share of the FYE 2012 interest expense is $1,191. Both of these per capita amounts, from government data, are grossly understated.

The Supreme Court in January 2010 swept aside the individual citizen with a ruling that corporations are persons with electioneering rights and can attempt to sway elections by authority of the Citizens United case. Even Presidential candidate Mitt Romney said, "corporations are people".

President Obama crushed individual liberties, with the overwhelming support of Congress (from the Tea Party caucus to the Progressive caucus voting 'Yes'), by signing the National Defense Authorization Act late on New Year's Eve (December 31, 2011). This provided for the indefinite detention of America citizens (without legal counsel, a judge, a trial, or a jury of peers) as decided by the Office of the President. This is, of course, the Stalin, Mao, Hitler, Mussolini, Pol Pot totalitarian system of citizen control and ultimately annihilation.

Congress has shown blatant and willful disregard for over a decade of the USA's fiscal future by running up funded debt of over $16 trillion (unfunded is easily in excess of $50 trillion). Next will be Internet censorship. Dissent is the new inconvenient truth. Dissenters will be labeled terrorists for NDAA indefinite detention purposes. The War on Terror is the War on You. The security searches and checkpoints, including groping your genitals to teach you compliance and submission, have already begun.

With all 3 branches of the USA federal government assaulting the American citizen's right to life, liberty, and the pursuit of happiness that leaves the Federal Reserve for the final blow. Now Federal Reserve Board Chairman Ben Bernanke has announced the beginning of the end of the The Great American Empire with indefinite quantitative easing, with indefinite money printing, with indefinite inflation. This is not QE 3, this is QE Infinity. This announces the "U.S. Dollar in not worth the paper it is not printed on" - more and more dollars, less and less value. The final financial and economic assault on the American citizen has begun and will now intensify. You'll be seeing more of this, as you already have, as you shop for food, fuel, and basic living needs.

Egan-Jones rating agency immediately downgraded USA sovereign debt from AA to AA- upon the Federal Reserve's QE Infinity announcement. The SEC most likely will announce a retaliatory investigation of Egan-Jones later in an effort of intimidation and censorship of the truth. The SEC and Federal Reserve are controlled by the Wall Street Banksters and they don't want you to know America has been pillaged by them. The world's worst and most criminal credit rating agencies who also serve the Wall Street Banksters (Standard and Poor's, Moody's, and Fitch) have negative outlooks on the bankrupt American Dream but that is as far as they dare go. Moody's and Fitch continue to think we will believe the USA is AAA while Standard and Poor's rates America at AA+. Among other credit rating agencies a more dismal and accurate story is told:
Dagong Global Credit (China): A, Outlook Negative
Weiss Ratings: C-, equivalent to BBB- or 1 level above junk, Outlook Not Provided

Egan-Jones cited the obvious in their American sovereign debt downgrade: debt greater than GDP, a weaker U.S. Dollar resulting from indefinite quantitative easing, an ongoing zero interest rate environment, unsustainable budget deficits.

With the Federal Reserve's QE Infinity, Congress can continue deficit spending, the oldest sovereign trick in the book. No need to balance the budget until the Day of Reckoning. This props up the financial system, prices will go higher, commodity prices will increase, other hard asset prices will rise, and the markets will continue well aloft. The ridiculous and criminal idea that the Fed is creating  jobs with printing money will ultimately be shown a sham. The global corporations want the cheap labor of Asia and South America, not the higher cost American labor. The USA's future is 'post-industrial' which means most jobs will be low-paying service jobs. A poor nation is easier to control per totalitarian doctrine. A middle class is pesky and has higher expectations such as a future.

Through federal government accounting chicanery, the July 2012 interest expense was a negative -$52 billion and this reduced the annualized interest expense and related annualized effective interest rate paid. No matter, the financial truth and facts will ultimately prevail, they always do, and the FY 2012 interest expense is actually an all-time high no matter what the proven liars in Washington say.



The graphic story of the pillaging of a nation.



The real reason the Federal Reserve's zero interest rate environment is indefinite. America will financially collapse if interest rates spike when the debt is $16+ trillion. That's why the Federal Reserve has to buy a significant portion off the U.S. Treasury debt - to keep rates low and fund the ongoing deficits. There's not enough lenders, buyers of U.S. Treasury bills, notes, and bonds, to keep the Ponzi scheme afloat.



Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 6-30-12), U.S. Treasury (Public Debt at 9-16-12), and U.S. Census Bureau (Population at 9-16-12):
Public Debt $16.05 trillion GDP $15.61 trillion
Population 314.39 million
Annualized Interest Expense $374.29 billion (the books are cooked)
Effective Interest Rate 2.53% (actually higher than 3.0%)

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

$SPY $DIA $QQQ $IWM

USA Banks Loan Charge-Offs Drop to 4-Year Low

Net Charge-Offs Decline Across All Loan Categories

Net charge-offs totaled $20.5 billion in the second quarter, an $8.4 billion (29.1 percent) reduction from second quarter 2011. This is the eighth consecutive quarter that charge-offs have declined from year-earlier levels and represents the lowest quarterly charge-off total since first quarter 2008. The year-over-year improvement was led by a $2.2 billion (24.6 percent) decline in credit card charge-offs, a $1.5 billion (25.2 percent) decline in charge-offs of residential mortgage loans, and a $1.2 billion (51.5 percent) drop in real estate construction loan charge-offs.

All major loan categories posted lower charge-offs compared with a year ago. Half of all insured institutions (50.6 percent) reported year-over-year declines in charge-offs.

USA Banks Net Charge-Off Rate by Quarter

USA Banks Return on Assets Rise to Post-Crisis High

Earnings Improvement Trend Reaches Three-Year Mark

The benefits of reduced expenses for loan losses outweighed the drag from declining net interest margins, as insured institutions posted a 12th consecutive year-over-year increase in quarterly net income. Banks earned $34.5 billion in the quarter, a $5.9 billion (20.7 percent) increase compared with second quarter 2011. Almost two out of every three banks (62.7 percent) reported higher earnings than a year ago. Only 10.9 percent were unprofitable, down from 15.7 percent in second quarter 2011.

The average return on assets (ROA) rose to 0.99 percent from 0.85 percent a year earlier. This is the third-highest quarterly ROA for the industry since second quarter 2007.

USA Banks Return on Assets by Year

FDIC Problem Bank List Decreases to 10-Quarter Low

More Than a Year Since Last New Charter

During the second quarter, the number of insured institutions reporting financial results declined from 7,308 to 7,246. Forty-five institutions were merged into other institutions, and 15 institutions failed. No new charters were added during the quarter. This is the fourth quarter in a row in which no new charters have been added. It has been more than six quarters since the last time a new charter was created other than to absorb a failing bank.

The number of full-time equivalent employees at FDIC-insured institutions increased from 2,102,280 to 2,108,200.

The number of institutions on the FDIC’s “Problem List” fell for a fifth consecutive quarter, from 772 to 732. Total assets of “problem” institutions declined from $291 billion to $282 billion.

FDIC Problem Banks by Quarter

Federal Reserve Releases GDP, Unemployment, Inflation Projections

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Federal Open Market Committee GDP Projections

Federal Open Market Committee Unemployment Rate Projections

Federal Open Market Committee PCE Inflation Projections

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Federal Reserve: "Economic activity has continued to expand at a moderate pace"

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Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve

Federal Reserve Issues FOMC statement

Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.

Fed Takes Aggressive Stimulus Action to Move Economy Forward

Federal Reserve chairman Ben Bernanke announced the Fed's third attempt to stimulate the economy by buying up mortgage-backed securities and bonds and keep borrowing rates low. Judy Woodruff talks to David Wessel, economics editor for The Wall Street Journal, to understand why the Fed chose this course of action.

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Peter Schiff: Fed Readies QE3, Gold Standard, Fiat US Dollar

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Peter Schiff

The Fed Readies QE3, Republicans Re-Consider the Gold Standard

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Capital One Small Business Survey: Confidence Holding Steady

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Capital One Small Business Survey

Small businesses continue to show improvements, remain steady, but express concerns for remainder of the year, according to second quarter 2012 survey data.

MCLEAN, Va. - (BUSINESS WIRE) - August 21, 2012 - Small businesses across the country are reporting generally modest but steady improvement in their finances, according to Capital One’s second quarter 2012 Small Business Barometer, a quarterly survey of small businesses across the nation examining general economic indicators and small business perceptions of the economic environment, gauging current financial conditions and business projections for the next six months. Looking back over the past year, the survey results indicate that small businesses continue to show signs of improvement. Small businesses started the year off on more solid footing in the first quarter of 2012 and the initial gains over 2011 have remained consistent, even showing some improvement in the second quarter of the year. On the hiring front, the survey found a two-year high in the percentage of small businesses planning to add jobs over the next six month, with 37 percent reporting plans to hire.

The majority of small businesses report that their business financials have remained stable or improved, with 44 percent reporting improved financial position compared to one year ago. However, small business perceptions regarding local economic conditions remain relatively unchanged and, despite the improvement in company financials, the data shows small business owners are less optimistic about business prospects in the months ahead. The national business outlook indicates that concerns over sales and price margins, have diminished small business confidence in their prospects for the remainder of 2012.

“This quarter’s survey results suggest that business is generally holding steady for small businesses; the current economic environment and overall business performance continue to hold their own or improve, and while hiring is far short of pre-recession levels, we’re seeing small businesses making plans to hire new employees in numbers that are among the highest we’ve seen in the past two years,” said Jon Witter, President, Retail and Direct Banking at Capital One. “Though these are promising signs, as we look forward, we’re also seeing some hesitancy and concern about prospects for the remainder of the year, as well as a limited line of sight to growth – demonstrating small business owners are moving forward with continued caution and pragmatism as they consider their plans and projections for the coming months.”

Capital One Bank Quarterly Small Business Barometer Survey Finds Small Business Confidence Holding Steady

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Max Keiser: World in Financial Holocaust!

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Wall Street Bankster, Con Artist, and Financial Terrorist: JPMorgan CEO Jamie Dimon

Max Keiser: We're in A Financial Holocaust!

On the Sunday, August 12 edition of Infowars Live, Alex hosts Max Keiser discussing the ravaged state of the U.S. economy and fragility of markets as published in a recent Fox News article The Coming Economic Collapse.

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Federal Reserve: "Economic activity decelerated somewhat over the first half of this year"

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Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve

Federal Reserve Issues FOMC statement

Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate.

Fed Pledges Help But Waits to Act on Economic Vulnerability

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Fed Beige Book: USA economy continued to expand at modest to moderate pace

Summary The Federal Reserve Board on July 18, 2012 issued the Beige Book commentary on current economic conditions for the approximately six weeks ending July 9, 2012. In general, across the 12 Federal Reserve Districts, "overall economic activity continued to expand at a modest to moderate pace in June and early July". The prior 4 Beige Books were phrased similarly. Richmond reported mixed economic activity. New York and Chicago reported growth but slower. The other 10 district reports were indicated economic growth. All 12 districts reported moderate growth in the prior report.

USA Financial System About the same: "Overall loan demand grew modestly in most Districts". The prior report: "Lenders in most Districts noted an improvement in loan demand and credit conditions".

USA Jobs Nationwide Slightly more negative: "Employment levels improved at a tepid pace for most Districts.". The prior report: "Hiring was steady or increased slightly".

Economic Conditions and Activity Nationwide by Category
Manufacturing: "continued to expand slowly in most Districts"
NonFinancial Services: "generally stable to slightly stronger"
Consumer Spending: "modest increases in retail spending on a year-over-year basis"
Automobile Sales: "Most Districts reported that vehicle sales remained robust"
Travel and Tourism: "strong across several Districts"
Residential Real Estate: "remained largely positive"
NonResidential Real Estate: "Recent activity in commercial real estate markets has been mixed"
Agriculture: "mixed since the previous report"
Natural Resources: "energy exploration activity had increased"
Wages: "Wage pressures remained modest"
Prices: "Price inflation was modest across most areas of the country"

Economic Conditions and Activity by Federal Reserve District
Boston: continues to expand at a moderate pace
New York: slowed since the last report
Philadelphia: continued to improve
Cleveland: continued to expand since our last report, but at a slower pace
Richmond: mixed reports on economic activity
Atlanta: expanded at a modest pace
Chicago: continued to expand at a moderate pace, although once again the pace of growth slowed from the previous reporting period
St. Louis: continued to expand at a modest pace
Minneapolis: grew moderately
Kansas City: expanded moderately
Dallas: grew at a moderate pace
San Francisco: expanded at a modest pace

Bank Loan Underwriting Standards Largely Unchanged

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Office  of the Comptroller of the Currency

OCC News Release: OCC Survey Showed Banks' Underwriting Standards Largely Unchanged

WASHINGTON — The Office of the Comptroller of the Currency’s 18th Annual Survey of Credit Underwriting Practices, released today, shows that underwriting standards remained largely unchanged from last year, although some easing was noted in select commercial and retail products.

Banks continued to react to changing economic conditions, competition, and ongoing portfolio risk. Examiners reported banks that eased standards generally did so in response to changes in economic outlook, competitive environment, and the bank’s risk appetite including a desire for growth. Large banks, as a group, reported the highest share of eased underwriting standards. Loan portfolios that experienced the most underwriting easing included indirect consumer, credit cards, large corporate, asset-based lending, and leveraged loans. Loan portfolios that experienced the most underwriting tightening included high loan-to-value home equity, international, construction, and residential real estate loans.

“This year’s survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes,” said John Lyons, Senior Deputy Comptroller and Chief National Bank Examiner. He went on to indicate “examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans.”

Banks should ensure appropriate attention to underwriting, loan structures, and loan administration as competition and the anxiety for earnings can lead to heightened risk. This is especially notable for loan products that have already seen easing such as leveraged lending, asset-based lending, indirect consumer lending, and credit cards.

The survey is a compilation of examiner observations and assessments of credit underwriting standards. The 2012 survey included 87 of the largest national banks and federal savings associations and covers the 12-month period ending February 29, 2012. The aggregate total of loans was $4.6 trillion as of December 31, 2011, which represents approximately 91 percent of total loans in the national bank and federal savings association system.

Survey of Credit Underwriting Practices

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Federal Reserve: "Economy has been expanding moderately"

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Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve

Federal Reserve Issues FOMC statement

Information received since the Federal Open Market Committee met in April suggests that the economy has been expanding moderately this year. However, growth in employment has slowed in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending appears to be rising at a somewhat slower pace than earlier in the year. Despite some signs of improvement, the housing sector remains depressed. Inflation has declined, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed continuation of the maturity extension program.

Press Conference with Chairman of the FOMC, Ben S. Bernanke

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Federal Reserve Lowers USA GDP Projections

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