January 23, 2020

Initial Jobless Claims  (week ended 1/18/2020)

- Initial Claims seasonally adjusted   211,000. Previous was 205,000
- Initial Claims unadjusted, totaled 267,582 a decrease of 70,968  from previous
- 4-week Moving Average seasonally adjusted 2213,250. Previous was 216,500

Seasonal adjustments remain relatively large post-Christmas and the jobs market remains extremely strong.

Source: Department of Labor Details here: https://www.dol.gov/ui/data.pdf 

Leading Indicators  (December 2019)

- Leading Indicators month/month-0.3%. Previous was +0.1%.

This is supposed to forecast the economy 3-6 months from now.

Source: Conference Board.  Details: https://www.conference-board.org/data/bcicountry.cfm?cid=1




January 22, 2020

MBA Mortgage Applications (week ended 1/17/2020)

- Purchase Index week/week -2.0%. Previous weeks were +16.0%, +5.0%, -5.0%, -2.0%, -0.4%, +1.0%, -1.0%, +7.0%, +5.0%, -3.0%, +2.0%, -4.0%, and -4.0%
- Refinance Index Week/Week -2.0%. Previous weeks were +43.0%, -8.0%, -5.0%, -7.0%, +9.0%, -16.0%, +4.0%, -8.0%, +13.0%, +2.0%, -1.0%, -17.0%, and +4.0%
- Composite Index Week/Week -1.2%. Previous weeks were +30.2%, -1.5%, -5.3%, -5.0%, +3.8%, -9.2%, +1.5%, -2.2%, +9.6%, -0.1%, +0.6%, -11.9%, and +0.5%

Source:  Mortgage Bankers Association

Chicago Federal National Activity Index  (December 2019)

- Level   -0.35. Previous was 0.41
- 3 Month Moving Average -0.23. Previous was -0.31 

This is a weighted average of 85 existing monthly indicators of national economic activity and inflationary pressure. This dip was unexpected.

Source:  Chicago Federal Reserve  Details here:  https://www.chicagofed.org/~/media/publications/cfnai/2020/cfnai-january2020-pdf.pdf?la=en

Redbook Chain Store Sales (week ended 1/18/2019)

- Same Store Sales year/year 5.3%. Previous was +5.0%.
- Same Store Sales month/month 0.0%. Previous was -0.2%

Chain store sales data is difficult to interpret because the data only includes stores currently open which were open a year ago.  The effect of closed chain stores is not accounted for.

The data includes about 9,000 stores.

Source: Redbook Research Inc.

 

FHFA House Price Index  (November 2019)

- month/month 0.2%. Previous was 0.2%
- year/year 4.9%. Previous was 5.0%

Slowing or no increase in home prices will make housing more affordable. Home prices have increased so much because of regulations inhibiting supply.

Source:   Federal Housing Finance Agency (FHFA)

 

Existing Home Sales  (December 2019)

- Existing Home Sales seasonally adjusted, annualized rate 5,540,000. Previous was 5,350,000
- Existing Home Sales month/month 3.6%. Previous was -1.7%
- Existing Home Sales year/year 10.8%. Previous was 2.7%

Source:  National Association of Realtors  https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

 


January 17, 2020

Housing Starts  (December 2019)

- Starts seasonally adjusted, annualized rate 1,608,000. Previous was 1,375,000
- Permits seasonally adjusted, annualized rate 1,416,000. Previous was 1,482,000

While it is good to see starts above the 1,500,000 needed to take care of population growth and units lost or scrapped for the first time since 2006 let's see if this persists.  The drop

in permits is of concern. Also, the entire gain month/month is in the mid-west with the other 3 regions down.  Don't cheer just yet.

I have written articles on why zoning and land use regulation have hurt starts and why rent control will reduce supply.

Why Housing Prices Are Rising
https://www.scotsmanguide.com/Residential/Articles/2018/02/Viewpoint--Why-Housing-Prices-Are-Rising

Don’t Repeal the Law of Supply and Demand
This past fall, California lawmakers passed a statewide rent-control bill.
https://www.scotsmanguide.com/browse/content/dont-repeal-the-law-of-supply-and-demand

Source:  Census Bureau  Details here:  https://www.census.gov/construction/nrc/pdf/newresconst.pdf

 

Industrial Production/Capacity Utilization  (December 2019)

- Production month/month       -0.3%. Previous was +0.8%
- Manufacturing month/month 0.2%. Previous was +1.0%
- Capacity Utilization Rate    77.0%. Previous was 76.6%

Down again after a month of gain.  The  blue collar part of the economy remains soft.

Source:  Federal Reserve

 

Consumer Sentiment  (January 2020)

- Sentiment Index  99.1. Previous was 99.3

This is the survey index from the University of Michigan.

 

JOLTS (November 2019)

- Job Openings 6,800,000. Previous was 7,361,000

December Jobs Reports shows 5,753,000 unemployed.

This represents Job Opening and after increasing for 6 years has more of less flattened since last Spring.

We still have a situation where unemployment is low, Job Openings exceed the U3 level of unemployment but wages remain flat.

Source:  Labor Department

 


January 16, 2020

Initial Jobless Claims (week ended 1/11/2020)

- New Claims seasonally adjusted 204,000. Previous was 214,000
- New Claims unadjusted, totaled 336,892 an increase of 1,412 from previous
- 4-week Moving Average 216,250. . Previous was 224,000 

We are in the post-Christmas part of the year where seasonal adjustments are high and will remain so for two more weeks.

The jobs market remains extremely strong.

Source: Department of Labor    Details: https://www.dol.gov/ui/data.pdf  

 

Philadelphia Fed Business Outlook Survey  (January 2020)

- General Business Conditions Index 17.0. Previous was 0.3  

Source:  Philadelphia Federal Reserve

 

Retail Sales  (December 2019)

- Retail Sales month/month 0.3%. Previous was 0.3%
- Retail Sales less autos month/month 0.7%. Previous was 0.0%
- Less Autos & Gas month/month 0.5%. Previous was -0.2%

While overall sales growth is modest the "less autos" is strong. The auto industry is hurting.  This is the most important component of GDP.

Source:  Census Bureau Details: https://www.census.gov/retail/marts/www/marts_current.pdf

 

Import and Export Prices  (December 2019)

- Import Prices month/month 0.3%. Previous was +0.2%
- Export Prices month/month    -0.2%. Previous was +0.2%
- Import Prices year/year 0.5%. Previous was -1.3%
- Export Prices year/year      -0.7%. Previous was -1.3%

Prices are likely being affected by tariffs and weakening economies in our trading partners. The spike in import prices was led by oil and oil prices have since declined.

Source: Bureau of Labor Statistics  Details: https://www.bls.gov/news.release/ximpim.nr0.htm

 

Business Inventories  (November 2019)

- Inventories month/month -0.2%. Previous was +0.1%

This is a component of 4thQ GDP.

Source:  Census Bureau Details:  https://www.census.gov/mtis/www/data/pdf/mtis_current.pdf

 

Housing Market Index  (January 2020)

- Housing Market Index 75. Previous was 76.

This is a survey index from the National Association of Home Builders.




January 15, 2020

MBA Mortgage Applications (week ended 1/10/2020)

- Purchase Index week/week  +16.0%. Previous weeks were +5.0%, -5.0%, -2.0%, -0.4%, +1.0%, -1.0%, +7.0%, +5.0%, -3.0%, +2.0%, -4.0%, -4.0%, and -1.0%
- Refinance Index Week/Week +43.0%. Previous weeks were -8.0%, -5.0%, -7.0%, +9.0%, -16.0%, +4.0%, -8.0%, +13.0%, +2.0%, -1.0%, -17.0%, +4.0%, and +10.0%
- Composite Index Week/Week +30.2%. Previous weeks were -1.5%, -5.3%, -5.0%, +3.8%, -9.2%, +1.5%, -2.2%, +9.6%, -0.1%, +0.6%, -11.9%, +0.5%, and +5.2%

Distortions caused by the Christmas and New Year's holidays make this data less than useful.  This happens each year.

Source:  Mortgage Bankers Association

 

PPI  (December 2019)

- PPI-FD month/month 0.1%. Previous was 0.0%
- PPI-FD year/year 1.3%. Previous was 1.1%
- PPI-FD core (less food & energy) month/month 0.1%. Previous was -0.2%
- PPI-FD core (less food & energy) year/year 1.1%. Previous was 1.3%
- PPI-FD less food, energy & trade services month/month 0.1%. Previous was 0.0%
- PPI-FD less food, energy & trade services year/year 1.5%. Previous was 1.3%

Well contained inflation should keep Treasury yields and mortgage rates in check.

Source:  Bureau of Labor Statistics

 

Atlanta Federal Reserve Business Inflation Expectations  (January 2020)

- Business Inflation Expectations  1.9%. Previous was 1.9%.

This is a survey index. 

Source:  Atlanta Federal Reserve  Details:  https://www.frbatlanta.org/research/inflationproject/bie.aspx




January 14, 2020

CPI  (December 2019)

- CPI month/month 0.2%. Previous was 0.3%
- CPI year/year  2.3%. Previous was 2.1%
- CPI core (less food & energy) month/month 0.1%. Previous was 0.2%
- CPI core (less food & energy) year/year 2.3%. Previous was 2.3%

Low unemployment is not translating into inflation.

Source: Bureau of Labor Statistics  Details here: https://www.bls.gov/news.release/cpi.nr0.htm

 

NFIB Small Business Optimism Index (December 2019)

- level  102.7. Previous was 104.7.

This is a survey index which measures 10 answers from small business owners.  This is important because it is generally small business which generate jobs.

Source: National Federation of Independent Business

 

Redbook Chain Store Sales (week ended 1/11/2019)

- Same Store Sales year/year +5.0%. Previous was +6.1%.
- Same Store Sales month/month -0.2%. Previous was -2.6%

Chain store sales data is difficult to interpret because the data only includes stores currently open which were open a year ago.  The effect of closed chain stores is not accounted for. 

The data includes about 9,000 stores.

Source: Redbook Research Inc.




January 10, 2020

BLS Employment Situation Report (December 2019)

- Nonfarm Payrolls month/month seasonally adjusted   145,000. Previous was 256,000
- Nonfarm Payrolls month/month not seasonally adjusted -278,000. Previous was   619,000
- Unemployment Rate - Level 3.5%. Previous was 3.5%
- Private Payrolls month/month 139,000. Previous was 243,000
- Manufacturing Payrolls month/month -12,000. Previous was 58,000
- Participation Rate 63.2%. Previous was 63.2%
- Average Hourly Earnings month/month 0.1%. Previous was +0.3%
- Average Hourly Earnings year/year 2.9%. Previous was 3.1%
- Average Workweek - All Employees 34.3 hours. Previous was 34.4 hours 

Source:  Bureau of Labor Statistics

This is the fundamental which receives the widest amount of media attention and, as such, will be regarded as a bit weak.

The large seasonal adjustments for Christmas make the December and January Jobs reports a bit less useful.  The question always is:  are we measuring the change in jobs or the accuracy or the seasonal adjustment. Also, 14,000 jobs were lost due to corrections for October and November.

Slower wage growth implies less pressure on inflation and yields on fixed-income securities including mortgages.

My newsletter of this weekend will detail the Jobs Report.  If you would like to be added to the weekly distribution email me dicklepte@rpm-mtg.com

 

Wholesale Trade  (November 2019)

- Inventories month/month -0.1%. Previous was +0.1%.

This is a component of 4thQ2019 GDP.

Source:  Census Bureau




January 9, 2020

Initial Jobless Claims (week ended 1/4/2020)

- New Claims seasonally adjusted 214,000. Previous was 223,000
- New Claims unadjusted, totaled 335,210 an increase of 22,686 from previous
- 4-week Moving Average  seasonally adjusted 224,000. Previous was 233,500

We are in the annual period when the seasonal adjustments are large because of the end of Christmas shopping season.

Source:  Department of Labor




January 8, 2020

MBA Mortgage Applications (week ended 1/3/2019)

- Purchase Index week/week  +5.0%. Previous weeks were -5.0%, -2.0%, -0.4%, +1.0%, -1.0%, +7.0%, +5.0%, -3.0%, +2.0%, -4.0%, -4.0%, -1.0%, and +1.0%
- Refinance Index Week/Week -8.0%. Previous weeks were -5.0%, -7.0%, +9.0%, -16.0%, +4.0%, -8.0%, +13.0%, +2.0%, -1.0%, -17.0%, +4.0%, +10.0%, and +14.0%
- Composite Index Week/Week -1.5%. Previous weeks were -5.3%, -5.0%, +3.8%, -9.2%, +1.5%, -2.2%, +9.6%, -0.1%, +0.6%, -11.9%, +0.5%, +5.2%, and +8.1%

No data was released last week because of the New Year holiday.

Source:  Mortgage Bankers Association

 

ADP Private Jobs  (December 2019)

- Private Jobs 200,000. Previous was revised up to 124,000.

The jobs market remains strong. Notable is the upward revision of November data from 67,000 to 124,000. It appears that both BLS and ADP have trouble getting the initial estimate correct. 

Source:  ADP

 

January 7, 2010

Trade Deficit (November 2019)

- Deficit $43.1 billion.  Previous was $46.9 billion

This is a component of 4thQ GDP. It is difficult to assess this data because tariffs seems to come and go with one effect being that trade is displaced in time to avoid tariffs.

Source:  Census Bureau

 

Redbook Chain Store Sales (week ended 1/4/2019)

- Same Store Sales year/year +6.1%. Previous was +7.8%.
- Same Store Sales month/month -2.6%. Previous was -2.8%

Chain store sales data is difficult to interpret because the data only includes stores currently open which were open a year ago.  The effect of closed chain stores is not accounted for.

Source: Redbook Research Inc.

 

Factory Orders (November 2019)

- Factory Orders month/month -0.7%. Previous was +0.2%

Machinery and transportation took the largest hits.

Source:  Census Bureau

 

ISM Non-Manufacturing Index  (December 2019)

- Composite Index 55.0. Previous was  53.9

This is a soft data (survey) metric.

Source:  Institute For Supply Management





January 6, 2020

PMI Services Index (December 2019)

- Level 52.8. Previous was 51.6
- PMI Composite Index 52.7. Previous was 52.0

This is a soft data (survey) metric. It is based on questionnaires sent to 400 companies. Print was above both previous and consensus range.

Source:  Markit Economics




January 3, 2020

ISM Manufacturing Index (December 2019)

- ISM Manufacturing Index  47.2. Previous was 48.8.

This is a survey based diffusion index. It looks at 5 components of the answers to questioneers sent to 300 manufacturing firms. The reading shows continued weakness in the manufacturing sector.

Source: Institute For Supply Management

 

Construction Spending  (November 2019)

- Construction Spending month/month 0.6%.  Previous was -0.8%
- Construction Spending year/year +4.1%

- Residential Construction Spending month/month +1.8%.

Source:  Census Bureau. Details here: https://www.census.gov/construction/c30/pdf/totsa.pdf




January 2, 2020

Challenger Job-Cut Report  (December 2019)

- Announced Layoffs   32,843. Previous was 44,569

Source:  Source: Challenger Gray & Christmas

Initial Jobless Claims  (week ended 12/28/2019)

- New Claims seasonally adjusted 222,000. Previous was 224,000
- New Claims  unadjusted, totaled 312,097 an increase of 24,772 from previous
- 4-week Moving Average seasonally adjusted 233,250. Previous was 228,500

We are in the post-Christmas period where are very large adjustments to jobs and jobless claims due to the layoff of people hired for the Christmas season.  In January we typically see about 2.9 million fewer jobs (not seasonally adjusted) in the BLS Employment Situation Report issued in the first week of February.

Source:  Department of Labor

PMI Manufacturing Index  (December 2019)

- Level  52.4. Previous was 52.6

An indication of the health of the manufacturing sector.

 Archive of commentary from previous months is here.