May 17, 2019

Consumer Sentiment  (May 2019)

- Sentiment Index 102.4. Previous was 97.2

This is the survey metric from the University of Michigan.  This is the highest reading in the past 15 years. This survey metric is supposed to forecast Consumer Spending in the next 3-6 months.

 

Leading Indicators  (April 2019)

- Leading Indicators month/month +0.2%. Previous was +0.4%

This is essentially a gauge of the possibility recession.  It is based on 10 indicators which have historically forecast recession.



May 16, 2019

Housing Starts (April 2019)

- Starts seasonally adjusted, annualized rate 1,235,000. Previous was 1,168,000.
- Permits seasonally adjusted, annualized rate 1,296,000. Previous was 1,288,000

Improved but still not enough to make home affordable to more people. Single-family Starts were +6.2%.  This may be to some extent about Starts having been delayed by weather.

 

Initial Jobless Claims  (week ended 5/11/2019)

- New Claims seasonally adjusted  212,000. Previous was 228,000
- New Claims  unadjusted, totaled 187,689  a decrease of 16,344 from the previous week
- 4-week Moving Average seasonally adjusted  225,000. Previous was 220,250


May 15, 2019

MBA Mortgage Applications  (week ended 5/10/2019)

- Purchase Index week/week -1.0%. Previous weeks were +4.0%, -4.0%, -4.0%, +1.0%, +1.0%, +3.0%, +6.0%, +0.3%, +4.0%, -3.0%, +6.0%, +1.7%, and -6.0%
- Refinance Index Week/Week -1.0%. Previous weeks were +1.0%, -5.0%, -11.0%, -8.0%, -11.0%, +39%, +12.0%., +4.0%, -0.2%, -2.0%, +5.0%, +6.4%, and -0.1%
- Composite Index Week/Week -0.6%. Previous weeks were +2.7%, -4.3%, -7.3%, -3.5%, -5.6%, +18.6%, +8.9%, +1.6%, +2.3%, -2.5%, +5.3%, +3.6%, and -3.7%

What is not discussed enough is that the home ownership rate is declining. What is needed is more housing and lower prices.

Retail Sales  (April 2019)

- Retail Sales month/month  -0.2%. Previous was 1.7%
- Retail Sales less autos month/month  0.1%. Previous was 1.3%
- Less Autos & Gas month/month  -0.2%. Previous was 1.1%

Retail Sales is the heart of 2ndQ2019 GDP. This metric has become notoriously unpredictable. A components breakdown show lower spending on new cars and also electronics.  Electronics Sales was -2.8%. Furniture was -1.4%. Sporting goods, hobby, musical instrument, & book stores (don't ask me why they group those together) was -7.3%. Details here https://www.census.gov/retail/marts/www/marts_current.pdf

 

Industrial Production (April 2019)

- Production month/month -0.5%. Previous was +0.2%
- Manufacturing month/month -0.5%. Previous was 0.0%

The weakness evidenced on the demand side is repeated on the supply side. This points to a weaker than expected 2ndQ GDP. If this trend continues it will also pressure the Fed to lower the Overnight Rate sooner.

A revision to the Atlanta Fed's GDPNow is due today.  See https://www.frbatlanta.org/cqer/research/gdpnow.aspx

 

Business Inventories  (March 2019)

- Inventories month/month 0.0%. Previous was +0.3%

This is a component of 1stQ2019 GDP.

 

Housing Market Index (May 2019)

- Housing Market Index 66. Previous was 63

May 14, 2019

Small Business Optimism Index  (April 2019)

- level 103.5. Previous was 101.8

 

Import and Export Prices (April 2019)

- Import Prices month/month 0.2%. Previous was 0.6%
- Export Prices month/month 0.2%. Previous was 0.6%
- Import Prices year/year      -0.2%. Previous was 0.2%
- Export Prices year/year 0.3%. Previous was 0.6%

Flat prices may be a sign of a slowing world economy.

It will be interesting to see what tariffs do to May Import Prices.

 

Redbook Chain Store Sales (week ended 5/11/2019)

- Store Sales year/year 5.4%. Previous was 5.9%.

May 10, 2019

CPI (April 2019)

- CPI month/month 0.3%. Previous was +0.4%
- CPI year/year  2.0%. Previous was +1.9%
- CPI core (less food & energy) month/month 0.1%. Previous was +0.1%
- CPI core (less food & energy) year/year 2.1%. Previous was 2.0%

Inflation remains contained with core at +0.1% month/month. In addition year/year core is +2.1% which is in the Fed's comfort zone of not being less that 2.0%

May 9, 2019

Trade Deficit (March 2019)

- Trade Deficit $50.0 billion.  Previous was $49.3 billion.

 

Initial Jobless Claims  (week ended 5/4/2019)

- New Claims seasonally adjusted 228,000. Previous was 230,000
- New Claims unadjusted, totaled 203,547 a decrease of 1,240 from previous
- 4-week Moving Average seasonally adjusted 220,000. Previous was 212,500

The Jobs market may be declining from the spectacular to the excellent.

 

PPI (Wholesale Inflation)  (April 2019)

- PPI-FD month/month 0.2%. Previous was 0.6%
- PPI-FD year/year 2.2%. Previous was 2.2%
- PPI-FD less food & energy month/month 0.1%. Previous was 0.3%
- PPI-FD less food & energy year/year 2.4%. Previous was 2.4%
- PPI-FD less food, energy & trade services month/month 0.4%. Previous was 0.0%
- PPI-FD less food, energy & trade services year/year 2.2%. Previous was 2.0%

Full report here https://www.bls.gov/news.release/ppi.nr0.htm

 

 

Wholesale Trade  (March 2019)

- Inventories month/month -0.1%. Previous was +0.4%

With February revised from +0.2% to +0.4% there should be little effect on the next release of 1stQ GDP.

May 8, 2019

MBA Mortgage Applications  (week ended 5/3/2019)

- Purchase Index week/week +4.0%. Previous weeks were -4.0%, -4.0%,+1.0%, +1.0%, +3.0%, +6.0%, +0.3%, +4.0%, -3.0%, +6.0%, +1.7%, -6.0%, and -5.0%
- Refinance Index Week/Week +1.0%. Previous weeks were -5.0%, -11.0%, -8.0%, -11.0%, +39%, +12.0%., +4.0%, -0.2%, -2.0%, +5.0%, +6.4%, -0.1%, and +0.3%
- Composite Index Week/Week +2.7%. Previous weeks were -4.3%, -7.3%, -3.5%, -5.6%, +18.6%, +8.9%, +1.6%, +2.3%, -2.5%, +5.3%, +3.6%, -3.7%, and -2.5%

Year/year purchase applications were +5.0%.

May 7, 2019


Redbook Chain Store Sales (week ended 5/4/2019)

- Store Sales year/year change 5.9%. Previous was 5.5%

 

JOLTS (Job Openings) March 2019

- Job Openings  7,488,000. Previous 7,142,000.

Last Friday's BLS Employment Sutuation Report showed the number of

people unemployed at 5,824,000.  There are 1,318,000 more Job

Openings than unemployed.

May 3, 2019

BLS Employment Situation Report  (April 2019)

- Nonfarm Payrolls seasonally adjusted month/month 263,000. Previous was 189,000
- Nonfarm Payrolls not seasonally adjusted month/month +1,126,000. Previous was 714,000
- Unemployment Rate 3.6%. Previous was 3.8%
- Private Payrolls month/month 236,000. Previous was 179,000 
- Manufacturing Payrolls month/month  4,000. Previous was  -6,000
- Labor Participation Rate  62.8%. Previous was 63.0%
- Average Hourly Earnings month/month  0.2%. Previous was 0.2%
- Average Hourly Earnings year/year  3.2%. Previous was 3.2%
- Average Workweek   34.4 hours. Previous was 34.6 hours

The jobs market remains very strong.  A complete analysis of the report will be in my RateWatch newsletter of Monday.

 

Goods Trade Deficit  (March 2019)

- Balance $71.4 billion. Previous was $70.9 billion

This is a component of 1stQ2019 GDP.

Retail Inventories - first look (March 2019)

- month/month -0.3 %. Previous was -0.2%

 

Wholesale Inventories - first look (March 2019)

- month/month  0.0%. Previous was +0.1%

 

PMI Services Index  (April 2019)

- Level    53.0. Previous was 55.3
- PMI Composite Index 53.0. Previous was 54.6

 

ISM Non-Manufacturing Index (April 2019)

- Composite Index  55.5. Previous was 56.3

 


May 2, 2019

Challenger Job-Cut Report (April 2019)

- Announced Layoffs 40,023. Previous was 60,587

 

Initial Jobless Claims (week ended 4/27/2019)

- New Claims seasonally adjusted 230,000. Previous was 230,000
- New Claims  unadjusted, totaled 204,035  a decrease of 7,759 from previous
- 4-week Moving Average seasonally adjusted 212,500. Previous was 206,000.

Claims have increased from 50-year lows to merely excellent. The BLS Employment Situation Report is tomorrow.

 

Productivity and Costs  (1stQ1019)

- Nonfarm productivity quarter/quarter seasonally adjusted, annualized rate 3.6%. Previous was +1.3%
- Unit labor costs quarter/quarter seasonally adjusted, annualized rate    -0.9%. Previous was +2.5%

This report is important but has, for several years, been a head-scratcher. Productivity is GDP/hours worked and Productivity growth has been disappointing for years.  The thinking is that technology would enable more to be produced/hour. My view is that the problem the last several years is that we added a lot of low productivity jobs. Adding bartenders and waitstaff does

not increase Productivity.

The decrease in Unit Labor Cost runs against the notion that low unemployment will increase labor cost. In fact much of what was held as axiomatic has been proved wrong in period of low unemployment.  This should serve as a reminder of how little we really understand the economy.

Factory Orders (March 2019)

- Factory Orders month/month 1.9%. Previous was -0.5%

Don't cheer yet.  This had showed decreases or miniscule gains for the five previous quarters.

May 1, 2019

MBA Mortgage Applications  (week ended 4/25/2019)

- Purchase Index week/week -4.0%. Previous weeks were -4.0%,+1.0%, +1.0%, +3.0%, +6.0%, +0.3%, +4.0%, -3.0%, +6.0%, +1.7%, -6.0%, -5.0%, and -2.0%
- Refinance Index Week/Week -5.0%. Previous weeks were -11.0%, -8.0%, -11.0%, +39%, +12.0%., +4.0%, -0.2%, -2.0%, +5.0%, +6.4%, -0.1%, +0.3%, and -6.0%
- Composite Index Week/Week -4.3%. Previous weeks were -7.3%, -3.5%, -5.6%, +18.6%, +8.9%, +1.6%, +2.3%, -2.5%, +5.3%, +3.6%, -3.7%, -2.5%, and -3.0%

This serves as a reminder that housing is becoming affordable to fewer people.  Unless we build more housing - actually unless we build a lot more housing - we will see lower rates of homeownership.

 

ADP Private Jobs  (April 2019)

- Private Jobs +275,000. Previous was +151,000.

Recovery perhaps from an unexpectedly weak March.

 

PMI Manufacturing Index (April 2019)

- Level 52.6. Previous was 52.4

 

ISM Manufacturing Index  (April 2019)

- Index 52.8. Previous was 55.3


  Archive of commentary from previous months is here.