April 21, 2017

PMI Composite Flash  (April 2017)

- Composite   52.7.  Previous was 53.2  
- Manufacturing  52.8. Previous was  53.4 
- Services  52.5 Previous was 52.9   

This is a supply side metric showing slowing growth.  This could be in response to weakening demand which will show up next week as weak 1stQ2017 GDP.




Existing Home Sales  (March 2017)

- Existing Home Sales seasonally adjusted, annualized 5.710,000.  Previous was 5,480,000.
- Existing Home Sales month/month   4.4%. Previous was -3.9%
- Existing Home Sales year/year   5.9%. Previous was +5.4%

This is returning to a healthy level. Supply was +5.9% in the month and prices were up 6.8% year-on-year.





April 20, 2017

Initial Jobless Claims (week ended 4/15/2017)

- New Claims seasonally adjusted 244,000. Previous was 234,000
- New Claims unadjusted, totaled 226,679 a decrease of 12,980 from previous
- 4-week Moving Average seasonally adjusted   243,000. Previous was 247,250.

Initial Jobless Claims continue to point to a healthy jobs market but Jobless Claims are less than 20% of the dynamics in and out of the jobs market and thus are are poor forecast of the monthly jobs report.  The jobs market had changed with 94% of jobs added 1995-2005 being something other than full-time W2 jobs many of which are not eligible for unemployment insurance.



Philadelphia Federal Business Outlook Survey  (April 2017)

- General Business Conditions Index  22.0. Previous was 32.8

This report shows economic strength but the metric is lower because delivery times increased.  Details here.    




Leading Indicators  (March 2017)

- Leading Indicators month/month +0.4%. Previous was +0.5% 

LEI is supposed to forecast economic growth six month into the future. It is calculated by weighing 10 economic indicators.


April 19, 2017

MBA Mortgage Applications (week ended 4/14/2017)

- Purchase Index Week/Week -3.0%. Previous weeks were +3.0%, +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, -5.0%, +2.0%, -6.0%, +6.0%, and -5.0%.
- Refinance Index Week/Week +0.2%. Previous weeks were +0.0%,-4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, -3.0%, +2.0%, -1.0%, +0.2%, and +7.0%.
- Composite Index Week/Week -1.8%. Previous weeks were +1.5%, -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, -3.7%, +2.3%, -3.2%, +4.0%, and -0.8%.

Purchase applications were down 1% year-on-year. 


April 18, 2017

Housing Starts  (March 2017)

- Starts seasonally adjusted, annualized 1,215,000. Previous was 1,303,000 
- Permits adjusted, annualized 1,260,000. Previous was 1,216,000

The fact is that Housing Starts have never recovered from the Great Recession.  I believe there are two factors 1) the jobs necessary to qualify for a mortgage simply have not been 
produced. 94% of the jobs created from 2005-2015 were something other than full-time W2 jobs.  They were part time, on-call, self-employed, or temporary. 2) regulations from entities such 
as CFPB have made lending a risky proposition.  The set of borrowers who, in years past would have been able to qualify for mortgage, has been reduced to exclude many of the 94% of people 
holding those new jobs.



Redbook  Chain Store Sales  (week ended 4/15/2017)

- Chain Store Sales year/year  +2.3%. Previous was +1.6% 





Industrial Production  (March 2017)

- Production month/month  +0.5%. Previous was +0.1%
- Manufacturing month/month -0.4%. Previous was +0.3%
- Capacity Utilization Rate  76.1%. Previous was 75.7%.

Industrial Production includes Utility Output which was driven up by useasonably cold weather.







April 17, 2017

Empire State Manufacturing Survey  (April 2017)

- General Business Conditions Index   5.2. Previous was 16.4 



Housing Market Index  (April 2017)

- Housing Market Index   68. Previous was 71.

This index is derived from a survey of home builders and is conducted by the National Association of Home Builders. Any reading over 50 is considered positive.  


April 14, 2017

Consumer Price Index  (March 2017)


- CPI (overall) month/month -0.3%. Previous was +0.1% 
- CPI (overall) +2.4%. Previous was +2.7%  
- CPI core (less food & energy) month/month -0.1%. Previous was +0.2%
- CPI core (less food & energy) year/year  +2.0%. Previous was +2.2%

This is interesting especially if it continues. The interesti ng question is this:  "is it the case that weak wage growth and the increased cost of housing and medical care coupled with 
the liability of student loan debt is impacting discretionary spending enough to lower demand and thus lower prices.



Retail Sales  (March 2017)

- Retail Sales month/month  -0.2%. Previous was -0.3%
- Retail Sales less autos month/month  +0.0%. Previous was +0.0%
- Less Autos & Gas month/month  +0.1%. Previous was +0.1%

As noted above, demand may be slacking pointing to a weak 1stQ2015 GDP. Atlanta Fed's on-the-fly GDPNow for 1stQ was estimated at +0.6% in its most recent print.




Business Inventories  (February 2017)

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

This is a GDP component. 


April 13, 2017

Initial Jobless Claims  (week ended 4/8/2017)

- Initial Claims seasonally adjusted 234,000. Previous was 235,000 
- Initial Claims not seasonally adjusted  totaled 239,944 an increase of 31,443 from previous
- 4-week Moving Average seasonally adjusted   247,250. Previous was 250,250

Initial Jobless Claims remain low but there are sectors such as chain store retail which will continue to see layoffs.



PPI-FD  (March 2017)

- PPI-FD month/month  -0.1%. Previous was +0.3% 
- PPI-FD year/year  2.3%. Previous was +2.2%
- PPI-FD less food & energy month/month 0.0%. Previous was +0.3%
- PPI-FD less food & energy year/year  +1.6%. Previous was +1.5%
- PPI-FD less food, energy & trade services month/month  +0.1%. Previous was +0.3%
- PPI-FD less food, energy & trade services year/year    +1.7%. Previous was +1.8%

What inflation does more so on the retail level will determine, in large part, where mortgage interest rates go. Despite the Fed's intentions of supporting inflation the fact is that prices are set by the dynamics of supply and demand.  Weak increases in wage growth coupled with high housing costs, high levels of debt from student loans and high health care costs will very likely keep a lid on discretionary spending and, consequently, CPI.





Consumer Sentiment  (April 2017)

- Sentiment Index  98.0. Previous was  96.9

This is the University of Michigan Index.  It is supposed to forecast consumer spending in the next few months but has instead turned into a survey of opinion of the President making it a 
lot less meaningful.



April 12, 2017

MBA Mortgage Applications (week ended 4/7/2017)

- Purchase Index Week/Week +3.0%. Previous weeks were +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, -5.0%, +2.0%, -6.0%, +6.0%, -5.0%, and +6.0%.
- Refinance Index Week/Week +0.0%. Previous weeks were -4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, -3.0%, +2.0%, -1.0%, +0.2%, +7.0%, and +4.0%.
- Composite Index Week/Week +1.5%. Previous weeks were -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, -3.7%, +2.3%, -3.2%, +4.0%, -0.8%, and +5.8%.


Seasonally adjusted purchase loan applications are up 6 of the last 7 weeks.


Import and Export Prices  (March 2017)

- Import Prices month/month  -0.2%. Previous was +0.4% 
- Export Prices month/month  +0.2%. Previous was +0.3%
- Import Prices year/year    +4.2%. Previous was +4.8%
- Export Prices year/year    +3.6%. Previous was +3.2%


The changes are mainly due to commodities.  Agricultural commodity prices were up, oil prices were down. 


Atlanta Federal Reserve Business Inflation Expectations (April 2017)

- Inflation Expectation year/year +1.9%. Previous was +2.1%. 


April 11, 2017

NFIB Small Business Optimism Index (March 2017)

- level 104.7. Previous was 105.3.

While lower this index is still high and appears to represent belief that somehow the new administration will be good for small businesses.  



Redbook Chain Store Sales (week ended 4/8/2017)

- Store Sales year/year +1.6%. Previous was +1.3%.

I have continued concern about the usefulness of this index.  It uses only same store sales not taking account for the chain store closings we are experiencing.



JOLTS

- Job Openings  5,743,000. Previous was 5,625,000.

This is the Job Openings and Labor Turnover Survey from the Labor Department. It shows that there are a lot of unfilled job openings. 


April 10, 2017

Labor Market Conditions Index (March 2017)

- LMCI +0.4. Previous revised from +0.6 to +1.4.

LMCI is calculated by the Fed and takes into account 19 seasonally-adjusted labor market indicators.  A look at an historical graph shows this on a slow decline since April 2014.  Media stories the past few years have painted the labor market as great but it is not.  We added jobs but only 5% of the jobs added from 2005-2015 were full-time W2 jobs. Those are not jobs which qualify workers for home ownership.

 



April 7, 2017


BLS Employment Situation Report (March 2017)

- Nonfarm Payrolls month/month   98,000. Previous was 219,000  
- Unemployment Rate 4.5%. Previous was 4.7%
- Private Payrolls month/month   89,000. Previous was 221,000  
- Participation Rate     63.0%. Previous was 63.0%  
- Average Hourly Earnings month/month  0.2%. Previous was +0.3%
- Average Hourly Earnings year/year   +2.7%  
- Average Workweek   34.3 hours. Previous was 34.3 hours 

I will have a detailed analysis of this in my newsletter next Monday.


Wholesale Trade  (February 2017)

- Inventories month/month  +0.4%. Previous was -0.2%.

This is a component of GDP. 




April 6, 2017

Challenger Job-Cut Report  (March 2017)

- Announced Layoffs  43,310. Previous was 36,957  



Initial Jobless Claims (week ended 4/1/2017)

- New Claims seasonally adjusted 234,000. Previous was 259,000 
- New Claims unadjusted, totaled 207,565 a decrease of 20,979  from  previous
- 4-week Moving Average    250,000. Previous was 254,500





April 5, 2017

MBA Mortgage Applications (week ended 3/24/2017)

- Purchase Index Week/Week +1.0%. Previous weeks were +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, -5.0%, +2.0%, -6.0%, +6.0%, -5.0%, +6.0%, and -2.0%.
- Refinance Index Week/Week -4.0%. Previous weeks were -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, -3.0%, +2.0%, -1.0%, +0.2%, +7.0%, +4.0%, and -22.0%.
- Composite Index Week/Week -1.6%. Previous weeks were -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, -3.7%, +2.3%, -3.2%, +4.0%, -0.8%, +5.8%, and -12.0%.



ADP Private Jobs (March 2017)

- Private Jobs +263,000. Previous was +245,000.

What is important in this report as well as last month's BLS is that we are now seeing jobs gains in construction and manufacturing. These are jobs which pay well and enable one to buy a 
home. For too long jobs gains had been concentrated in waiters/waitresses, bartenders, and low-paying health care jobs.




PMI Services Index  (March 2017)

- Level   52.8. Previous was 53.8.

Growth but at the lowest pace in 6 months.  





ISM Non-Manufacturing Index (March 2017)

- Composite Index   55.2. Previous was 57.6.

Non-manufacturing is seeing a slowing in employment growth.  This could be related to the large hit that big retail stores are taking.  This will be a year of reckoning for bit retail chains. 


April 4, 2017

Trade Deficit (February 2017)

- Deficit  $43.6 billion. Previous was $48.2 billion.

The smaller deficit improves the outlook for 1stQ GDP. 






Redbook (Chain Store Sales (week ended 4/1/2017)

- Chain Store Sales year/year +1.3%. Previous was +0.6%



Factory Orders (February 2017)

- Factory Orders month/month +1.0%.  Previous was +0.3%

Details at https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf


April 3, 2017

PMI Manufacturing Index  (March 2017)

- Level 53.3. Previous was 54.2

Growing but at a slower pace.




ISM Manufacturing Index  (March 2017)

- ISM Manufacturing 57.2. Previous was 57.7.

Growing but at a slightly slower pace.



Construction Spending  (February 2017)

- Construction Spending month/month  +0.8%. Previous was -0.4% 
- Construction Spending year/year   +3.0%. Previous was +3.1%

Single-family home construction was +1.2%. 

 






  Archive of commentary from previous months is here.