May 24, 2017

MBA Mortgage Applications (week ended 5/19/2017)


- Purchase Index Week/Week -1.0%. Previous weeks were -3.0%, +2.0%, +4.0%, -1.0%, -3.0%, +3.0%, +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, and -3.0%.
- Refinance Index Week/Week +11.0%. Previous weeks were -6.0%, +3.0%, -5.0%, +7.0%, +0.2%, +0.0%,-4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, and -1.0%.
- Composite Index Week/Week +4.4%. Previous weeks were -4.1%, +2.4%, -0.1%, +2.7%, -1.8%, +1.5%, -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, and -2.0%.

Lower rates stimulated refis but not purchases. I believe that in the rate range we have been for several years, interest rates do near zero to stimulate purchases.  I have never had 
anyone says something like "Wow, rates are 4.5%.  I can't afford the home I wanted when rates were 4%."


FHFA House Price Index (March 2017)

- month/month +0.6%. Previous was +0.8% 
- Year/year   +6.2%. Previous was +6.4% 

Different regions have much different changes but, in general, this increase in home prices well above increases in CPI and wages is not a benefit.


Existing Home Sales (April 2017)

- Existing Home Sales seasonally adjusted, annualized rate  5,570,000. Previous was 5,700,000 
- Existing Home Sales month/month  -2.3%. Previous was +4.4%
- Existing Home Sales year/year   +1.6%. Previous was +5.9%

Higher prices, fewer sales. 





May 23, 2017

Johnson Redbook Chain Store Sales (week ended 5/20/2017)

- Store Sales year/year +2.0%. Previous was +2.4% 

This metric will become increasingly less useful as chain store close some outlets.  This metric uses only same stores. These are outlets still open which were existed a year ago. The 
closed stores are not counted. If some of the sales from a closed outlet moved to a still open outlet the data will look better.



PMI Composite Flash (May 2017)

- Composite  53.9. Previous was 52.7  
- Manufacturing   52.5. Previous was 52.8 
- Services  54.0. Previous was 52.5

Services up, manufacturing down.  The healthy gains in manufacturing of a few months ago are not so robust.



New Home Sales (April 2017)

- New Home Sales seasonally adjusted, annualized rate 569,000. Previous was 642,000

February and March were revised upward but this is still a disappointing number.  The only solace is that this metric is notoriously bouncy.  This sizable drop occurs after three months of increase.




Richmond Federal Reserve Manufacturing Index  (May 2017)

- Level 1.  Previous was 20.

Very disappointing and just barely expanding.    





May 22, 2017

Chicago Federal Reserve National Activity Index (April 2017)

- Level  0.49. Previous was +0.07  
- 3 Month Moving Average   0.23. Previous was +0.00 

This is a weighted average of 85 monthly indicators of economic activity at the national level. 

 





May 18, 2017

Initial Jobless Claims (week ended 5/13/2017)

- New Claims seasonally adjusted  232,000. Previous was 236,000
- New Claims unadjusted, totaled 206,458  a decrease of 8,766 from  previous
- 4-week Moving Average seasonally adjusted  240,750. Previous was 243,500

Jobless Claims remain low but even with extremely low Claims and a low unemployment rate we are not seeing any dramatic increase in wages.  The reason may be that we are continuing to add 
low skill, low pay jobs.  The pool of people willing to fill these jobs remains large enough to keep wages flat apart from state mandated increases in minimum wages. 



Philadelphia Federal Reserve Business Outlook Survey  (May 201)

- General Business Conditions Index 38.8. Previous was 22.0  




Leading Indicators (April 2017)

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


May 17, 2017

MBA Mortgage Applications (week ended 5/12/2017)


- Purchase Index Week/Week -3.0%. Previous weeks were +2.0%, +4.0%, -1.0%, -3.0%, +3.0%, +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, and -5.0%.
- Refinance Index Week/Week -6.0%. Previous weeks were +3.0%, -5.0%, +7.0%, +0.2%, +0.0%,-4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, and -3.0%.
- Composite Index Week/Week -4.1%. Previous weeks were +2.4%, -0.1%, +2.7%, -1.8%, +1.5%, -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, and -3.7%.

Year-on-year Purchase Applications were up 9%. The drop in the week/week data is from a level which was an 8 year high.


May 16, 2017

Housing Starts  (April 2017)

- Starts seasonally adjusted annualized rate 1,172,000. Previous was 1,203,000 
- Permits seasonally adjusted annualized rate  1,229,000. Previous was 1,260,000 

Month/month was down 2.6%.  Year/year was up 0.7%.  Single-family Starts was +0.4% month/month.  

In order to keep the same headship ratio (number of people/household) constant we should have 1,500,000 Starts annually. The last time we were at or above that was December 2006.


Redbook Chain Store Sales (week ended 5/13/2017)

- Store Sales year/year  2.4%. Previous was +1.3%.

This metric will become increasingly less useful as chain store close some outlets.  This metric uses only same stores. The closed stores are not counted. 





Industrial Production (April 2017)

- Production month/month  +1.0%. Previous was +0.4%
- Manufacturing month/month  +1.0%. Previous was -0.4%
- Capacity Utilization Rate 76.7%. Previous was 76.1%.  


May 15, 2017

Empire State Manufacturing Survey  (May 2017)

- General Business Conditions Index   -1.0. Previous was +5.2  

This is the N.Y. Fed's metric for manufacturing in New York State which is no longer a major component in manufacturing.  This always gets attention largely because in come from the N.Y 

Fed.  This index had been positive for six months.  The report from the N.Y. Fed  paints this as a "don't worry, be happy" reading.



Housing Market Index  (May 2017)

- Housing Market Index  70. Previous was 68.

This data is from a survey of homebuilders taken by The National Association of Home Builders.  The trend has been slow and steady improvement for three years. 


May 12, 2017

Consumer Price Index (April 2017)

- CPI month/month  +0.2%. Previous was -0.3%  
- CPI year/year  +2.2%. Previous was +2.4%
- CPI core (less food & energy) month/month +0.1%. Previous was -0.1%
- CPI core (less food & energy)  +1.9%. Previous was +2.0%

Inflation of the wholesale side (yesterday's PPI) did not show up in the retail side.  This has been a common occurrence in recent years.  Retailers interested in retaining customers do not 
pass along their increased costs.






Retail Sales  (April 2017)

- Retail Sales month/month  +0.4%. Previous was +0.1%
- Retail Sales less autos month/month  +0.3%. Previous was +0.3%
- Less Autos & Gas month/month  +0.3%. Previous was +0.4%

The headline gain would be more encouraging if it were consistent.  This is the heart of GDP.






Business Inventories  (March 2017)

- Inventories  +0.2%. Previous was +0.2%.

This is a GDP component. 





Consumer Sentiment  (May 2017)

- Sentiment Index  97.7. Previous was 97.0  

This is the University of Michigan Index.



May 11, 2017

Initial Jobless Claims (week ended 5/6/2017)


- New Claims seasonally adjusted 236,000. Previous was 238,000
- New Claims unadjusted, totaled 215,041  an increase of 3,732 from previous 
- 4-week Moving Average seasonally adjusted   243,500. Previous was 243,000

The problem with the jobs market has not been about the number of jobs but rather the quality of jobs.  We keep adding low paying jobs.



PPI-FD  (April 2017)

- PPI-FD month/month +0.5%. Previous was +0.2%
- PPI-FD year/year  +2.5%. Previous was +2.3%
- PPI-FD less food & energy month/month  +0.4%. Previous was +0.2%
- PPI-FD less food & energy year/year   +1.9%. Previous was 1.6% 
- PPI-FD less food, energy & trade services month/month  +0.7%. Previous was +0.1%
- PPI-FD less food, energy & trade services year/year    +2.1%. Previous was  1.7%

Inflation at the wholesale level picked up in April.  Whether this is a trend or an offset to low inflation in March will be evidenced in future months.

 





May 10, 2017

MBA Mortgage Applications (week ended 5/5/2017)


- Purchase Index Week/Week +2.0%. Previous weeks were +4.0%, -1.0%, -3.0%, +3.0%, +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, -5.0%, and +2.0%.
- Refinance Index Week/Week +3.0%. Previous weeks were -5.0%, +7.0%, +0.2%, +0.0%,-4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, -3.0%, and +2.0%.
- Composite Index Week/Week +2.4%. Previous weeks were -0.1%, +2.7%, -1.8%, +1.5%, -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, -3.7%, and +2.3%.

Year over year Purchase applications were up 6%.


Import and Export Prices  (April 2017)

- Import Prices month/month  +0.5%. Previous was +0.1% 
- Export Prices month/month  +0.2%. Previous was +0.1%
- Import Prices year/year    +4.1%. Previous was +4.3%
- Export Prices year/year    +3.0%. Previous was +3.4%



Atlanta Federal Business Inflation Expectations  (May 2017)

- Business Inflation Expectations year/year +2.0%. Previous was +1.9%  



May 9, 2017

NFIB Small Business Optimism Index (April 2017)

- level  104.5. Previous was 104.7

Small business has been very optimistic for the past six months. This is important because small businesses are the traditional creators of jobs.  




Redbook Chain Store Sales  (week ended 5/6/2017)

- Store Sales year/year  1.3%. Previous was +2.3% 




JOLTS  (March 2017)

- Job Openings 5,743,000. Previous was 5,682,000.

Job Openings continue to rise but too many businesses cannot find candidates with the required skills.




Wholesale Trade (March 2017)

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

This is a component of 1stQ GDP.


May 8, 2017

Labor Market Conditions Index    (April 2017)

- Level 3.5. Previous was revised from +0.4 to +3.6.


May 5, 2017

BLS Employment Situation Report  (April 2017)

- Nonfarm Payrolls month/month   211,000. Previous was 79,000  
- Unemployment Rate 4.4%. Previous was +4.5% 
- Private Payrolls month/month  194,000. Previous was 77,000  
- Participation Rate    62.9%. Previous was  63.0%
- Average Hourly Earnings month/month  0.3%. Previous was +0.1%
- Average Hourly Earnings year/year 2.5%. Previous was +2.6%
- Average Workweek - All Employees  34.4 hours Previous was 34.3 hours 

Gains in manufacturing were negligible. Largest gaining sectors were leisure and hospitality and health care.  

 





May 4, 2017

Challenger Job-Cut Report (April 2017)

- Announced Layoffs - 36,602 43,310 




Trade Deficit (March 2017)

- Trade Deficit  $43.7 billion. Previous was   $43.8 billion.




Initial Jobless Claims (week ended 4/29.2017)

- New Claims seasonally adjusted 238,000. Previous was 257,000
- New Claims  unadjusted, totaled 211,287 a decrease of 30,493 from  previous 
- 4-week Moving Average 243,000. Previous was 242,250





Productivity and Costs  (1stQ2017)

- Nonfarm productivity quarter/quarter seasonally adjusted, annualized rate  -0.6%. Previous was +1.8%
- Unit labor costs  quarter/quarter seasonally adjusted, annualized rate   +3.0%. Previous was  +1.3%.

The increase in unit labor cost is likely due to the fact that 21 states increased the minimum wage at the start of the year.  Lagging productivity (GDP/hours worked) continues to be a concern. This likely has at least two causes:  1) we are not adding enough high productivity (manufacturing) jobs while adding low productivity jobs. 2) we need more capital investments from business to create higher productivity jobs.





Factory Orders  (March 2017)

- Factory Orders month/month +0.2%. Previous was +1.2% 

Another sign of weak economic growth.


May 3, 2017

MBA Mortgage Applications (week ended 4/28/2017)


- Purchase Index Week/Week +4.0%. Previous weeks were -1.0%, -3.0%, +3.0%, +1.0%, +1.0%, -2.0%, +2.0%, +2.0%, +7.0%, -3.0%, -5.0%, +2.0%, and -6.0%.
- Refinance Index Week/Week -5.0%. Previous weeks were +7.0%, +0.2%, +0.0%,-4.0%, -3.0%, -3.0%, +4.0%, +5.0%, +5.0%, -1.0%, -3.0%, +2.0%, and -1.0%.
- Composite Index Week/Week -0.1%. Previous weeks were +2.7%, -1.8%, +1.5%, -1.6%, -0.8%, -2.7%, +3.1%, +3.3%, +5.8%, -2.0%, -3.7%, +2.3%, and -3.2%.







ADP Private Jobs (April 2017)

- Private Jobs  177,000. Previous was 255,000.

Couple of points here:  1) the correlation between ADP and BLS has been spotty and 2) the correlation between jobs and the economy have been even poor. We cannot grow the economy by adding low-paying jobs.





PMI Services Index  (April 2017)

- Level   53.1 52.8

 




ISM Non-Manufacturing Index (April 2017)

- Composite Index 57.5. Previous was 55.2  

Recently better readings on the supply side have been rare. Having two supply side metrics improve is a big plus.



May 2, 2017

Redbook Chain Store Sales (week ended 4/29/2017)

- Store Sales year/year  +2.3%. Previous was +1.7% 

May 1, 2017

Personal Income and Outlays  (March 2017)

- Personal Income month/month  +0.2%. Previous was +0.3% 
- Consumer Spending month/month   0.0%. Previous was +0.0% 
- PCE Price Index month/month -0.2%. Previous was +0.1%
- Core PCE price index month/month -0.1%. Previous was +0.2%
- PCE Price Index year/year  +1.8%. Previous was +2.1%
- Core PCE price index year/year  +1.6%. Previous was +1.8%

Last Friday's GDP report was dismal and the only positive was an increase in Real Final Sales of Domestic Goods.  Flat Consumer Spending indicates a possible downward revision in the next 
GDP report and does not support another Fed hike in the near future.



PMI Manufacturing Index  (April 2017)

- Level   52.8. Previous was 53.3  




ISM Manufacturing Index  (April 2017)

- Level    54.8. Previous was 57.2 

This and most all of the other supply side indicators are still showing growth but at a slower pace.  




Construction Spending  (March 2017)

- Construction Spending month/month -0.2%. Previous was +1.8%
- Construction Spending year/year +3.6%. Previous was +3.0%

With the previous month revised from +0.8% to +1.8% this is weak but not as bad as first blush.


 






  Archive of commentary from previous months is here.