by Calculated Risk on 5/10/2019 08:37:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis after rising 0.4 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
...
The index for all items less food and energy increased 0.1 percent for the third consecutive month.
...
The all items index increased 2.0 percent for the 12 months ending April, the largest 12-month increase since the period ending November 2018. The index for all items less food and energy rose 2.1 percent over the last 12 months, and the food index rose 1.8 percent.
emphasis added

I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

by Calculated Risk on 5/09/2019 07:42:00 PM

Merrill on US-China Trade:

As the US-China trade war enters a decisive phase, we outline three scenarios to help clients navigate the economic and market implications. The most favorable outcome is a near-term trade deal, with no additional tariffs. ... in our second scenario there is another round of tit-for-tat tariffs. After a brief period of uncertainty, an agreement is reached. The last and most unlikely scenario is a full-blown trade war.

An imminent trade deal should allow the global economy to continue to grow above trend. ... In the brinkmanship scenario we see downside risks to growth from higher tariffs and elevated uncertainty. A trade war, with across-the-board tariffs on US-China trade, would push the global economy towards recession. 

Friday:
• At 8:30 AM, The Consumer Price Index for April from the BLS. The consensus is for 0.4% increase in CPI, and a 0.2% increase in core CPI.

by Calculated Risk on 5/09/2019 04:52:00 PM

From Pacific Union chief economist Selma Hepp: Bay Area housing market shifting in anticipation of IPO demand

• IPO expectations are already showing up in home sales activity, particularly in San Francisco and San Mateo

• Sales of homes in San Francisco, San Mateo and Alameda have solidly exceeded last year – up 7 percent, 4 percent and 2 percent respectively year-over-year in April

• Santa Clara, Wine Country and Contra Costa remain slower compared to last year

• Homes priced between $1 million and $2 million continue to struggle, except in San Francisco and San Mateo, likely a result of tax reform changes and reduced state and local tax (SALT)and mortgage interest deductions

• Nevertheless, sales of homes priced above $3 million have surged again, posting a 5 percent year-over-year increase, matching last year’s peaks

• While growth in inventory of homes for sales is broad based, availability of homes priced above $3 million accelerated again to a 26 percent annual growth in April

• While price growth remains flat in most regions, San Francisco median prices up 2 percent year-over-year in April

• A 9 percent annual increase in homes under contract suggests buyers are back in droves, especially for homes priced over $3 million, up 44 percent year-over-year

by Calculated Risk on 5/09/2019 12:34:00 PM

From HotelNewsNow.com: STR: U.S. hotel results for week ending 4 May

The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 28 April through 4 May 2019, according to data from STR.

In comparison with the week of 29 April through 5 May 2018, the industry recorded the following:

• Occupancy: +1.2% to 69.1%
• Average daily rate (ADR): +2.3% to US$133.43
• Revenue per available room (RevPAR): +3.6% to US$92.21
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2019, dash light blue is 2018, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

A decent start for 2019, close - to-date - compared to the previous 4 years.

Seasonally, the occupancy rate will mostly move sideways during the Spring, and then increase during the Summer travel season.

Data Source: STR, Courtesy of HotelNewsNow.com

by Calculated Risk on 5/09/2019 08:49:00 AM

From the Department of Commerce reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $50.0 billion in March, up $0.7 billion from $49.3 billion in February, revised.

March exports were $212.0 billion, $2.1 billion more than February exports. March imports were $262.0 billion, $2.8 billion more than February imports.

Click on graph for larger image.

Exports and imports increased in March.

Exports are 28% above the pre-recession peak and up 1% compared to March 2018; imports are 13% above the pre-recession peak, and up 2% compared to March 2018.

In general, trade had been picking up, although both imports and exports have moved mostly sideways recently.

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil imports averaged $53.10 per barrel in March, up from $46.89 in February, and down from $54.00 in March 2018.

The trade deficit with China decreased to $20.7 billion in March, from $25.9 billion in March 2018.

by Calculated Risk on 5/09/2019 08:34:00 AM

The DOL reported:

In the week ending May 4, the advance figure for seasonally adjusted initial claims was 228,000, a decrease of 2,000 from the previous week's unrevised level of 230,000. The 4-week moving average was 220,250, an increase of 7,750 from the previous week's unrevised average of 212,500.
emphasis added

The previous week was unrevised.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 220,250.

This was well above the consensus forecast.

by Calculated Risk on 5/08/2019 08:21:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 215 thousand initial claims, down from 230 thousand last week.

• At 8:30 AM, Trade Balance report for March from the Census Bureau. The consensus is the trade deficit to be $50.1 billion.  The U.S. trade deficit was at $49.4 Billion in February.

• At 8:30 AM, The Producer Price Index for April from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.

by Calculated Risk on 5/08/2019 04:21:00 PM

This index is similar to the overall NAHB housing market index (HMI), but only released quarterly. The NAHB started this index in Q4 2008 (during the housing bust), so the readings were initially very low.

From the NAHB: 55+ Housing Market Opens First Quarter with Record High

Builder confidence in the single-family 55+ housing market continued to strengthen in the first quarter of 2019 with a reading of 72, up six points from the previous quarter, according to the National Association of Home Builders' (NAHB) 55+ Housing Market Index (HMI) released today. This is the highest reading since the inception of the index in 2008.
...
"Overall, demand for homes in 55+ communities remain strong as more buyers and renters in that market search for simpler living arrangements,” said Karen Schroeder, chair of NAHB's 55+ Housing Industry Council and vice president of Mayberry Homes in East Lansing, Mich. “However, there are still headwinds that are impacting the market, such as rising construction costs and a lack of skilled labor.”

All three index components of the 55+ single-family HMI posted increases from the previous quarter: Present sales rose four points to 76, expected sales for the next six months increased seven points to 77 and traffic of prospective buyers climbed eight points to 61.
emphasis added

Click on graph for larger image.

This graph shows the NAHB 55+ Single Family HMI through Q1 2019.  Any reading above 50 indicates that more builders view conditions as good than as  poor.  The index increased to 72 in Q1 up from 66 in Q4.

There are two key drivers in addition to the improved economy: 1) there is a large cohort that recently moved into the 55+ group, and 2) the homeownership rate typically increases for people in the 55 to 70 year old age group. So demographics are favorable for the 55+ market.

by Calculated Risk on 5/08/2019 11:52:00 AM

From the HAR: The Luxury Market Leads the Way in Houston's April Home Sales Gains

Lower mortgage interest rates, improving oil prices, steady economic growth and a more plentiful supply of housing translated to a strong month for home sales throughout greater Houston in April. Luxury homes (priced at $750,000 and above) drew the greatest volume of sales followed closely by homes in the $150,000 to $250,000 range. Housing inventory grew to its highest level since last September, keeping up with consumer demand midway through the spring buying season.

According to the latest monthly report from the Houston Association of Realtors (HAR), sales of single-family homes increased 7.8 percent in April, with 7,586 homes sold compared to 7,035 in April 2018. That marks the third straight month of positive sales and the biggest volume gain of 2019. On a year-to-date basis, home sales are 2.2 percent ahead of last year’s record pace.
...
April sales of all property types totaled 9,063, up 7.8 percent compared to the same month last year. Total dollar volume for the month jumped 9.6 percent to about $2.7 billion.

“Consumers have been taking advantage of optimal conditions for homebuying, with low interest rates and a growing supply of properties, and that has powered Houston to a strong springtime performance,” said HAR Chair Shannon Cobb Evans with Heritage Texas Properties. “The rental market also remains healthy, and we’re relieved to see sales finally turning around among townhomes and condominiums.”
...
Total active listings, or the total number of available properties, jumped 13.8 percent to 42,086. ...
emphasis added

On pace for record sales in Houston.

by Calculated Risk on 5/08/2019 10:22:00 AM

This is a key former distressed market to follow since Las Vegas saw the largest price decline, following the housing bubble, of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported Local home prices hovering around $300,000, with more homes on the market; GLVAR housing statistics for April 2019

Local home prices are hovering around $300,000, while the number of homes on the market continues to increase. So says a report released Wednesday by the Greater Las Vegas Association of REALTORS® (GLVAR).
...
The total number of existing local homes, condos and townhomes sold during April was 3,625. Compared to one year ago, April sales were down 0.2% for homes, but up 8.7% for condos and townhomes.
...
At the current sales pace, Carpenter said Southern Nevada now has less than a three-month supply of homes available for sale. That’s up from one year ago, but still below what would normally be considered a balanced market. By the end of April, GLVAR reported 7,435 single-family homes listed for sale without any sort of offer. That’s up 94.8% from one year ago. For condos and townhomes, the 1,826 properties listed without offers in April represented a 131.1% jump from one year ago.
...
The number of so-called distressed sales remains near historically low levels. GLVAR reported that short sales and foreclosures combined accounted for just 3.0% of all existing local property sales in April. That compares to 2.5% of all sales one year ago and 8.4% two years ago.
emphasis added

1) Overall sales were up 1.5% year-over-year from 3,571 in April 2018 to 3,625 in April 2019.

2) Active inventory (single-family and condos) is up sharply from a year ago, from a total of 4,606 in April 2018 to 9,261 in April 2019. Note: Total inventory was up 101% year-over-year.   This is a significant increase in inventory, although months-of-supply is still somewhat low.

3) Low level of distressed sales, but up slightly YoY.