by Calculated Risk on 11/03/2021 12:21:00 PM

Today, in the Real Estate Newsletter: The Market Impact of the Closure of Zillow Offers

Excerpt:

Many people are discussing the Zillow’s business decision to discontinue Zillow Offers. This was a essentially a house flipping program. My question is what - if any - will be the market impact of the closure.
...
But the bottom line is inventories are very low, mortgage rates are still historically low, and demographics are currently favorable for home buying.

If the housing market slows - for whatever reason - I think the slowdown will show up in active existing home inventory. This is why I track local market inventory so closely every month. Some markets have seen inventories increase, but overall active inventory was at a record low for September.

We should get some local October inventory numbers soon.

by Calculated Risk on 11/03/2021 10:05:00 AM

(Posted with permission). The October ISM® Services index was at 66.79%, up from 61.9% last month. The employment index decreased to 51.6%, from 53.0%. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: Services PMI® at 66.7% October 2021 Services ISM® Report On Business®

Economic activity in the services sector grew in October for the 17th month in a row — with the rate of expansion setting a record for the fourth time in 2021 — say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In October, the Services PMI® registered another all-time high of 66.7 percent, 4.8 percentage points above September’s reading of 61.9 percent. This figure exceeds the former all-time high of 64.1 percent in July; previous records were set in May (64 percent) and March (63.7 percent). The data quickly explains the elevated Services PMI® reading, as two of the four equally weighted subindexes that directly factor into the composite index set all-time highs: The Business Activity Index reached 69.8 percent, an increase of 7.5 percentage points compared to the reading of 62.3 percent in September, and the New Orders Index hit 69.7 percent, up 6.2 percentage points from last month’s figure of 63.5 percent. (The other two subindexes are Employment and Supplier Deliveries, both also in expansion territory in October.)
emphasis added

This was above the consensus forecast,  however the employment index decreased to 51.6%, from 53.0% the previous month.

by Calculated Risk on 11/03/2021 08:19:00 AM

From ADP:

Private sector employment increased by 571,000 jobs from September to October according to the October ADP® National Employment ReportTM. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual data of those who are on a company’s payroll, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis

“The labor market showed renewed momentum last month, with a jump from the third quarter average of 385,000 monthly jobs added, marking nearly 5 million job gains this year,” said Nela Richardson, chief economist, ADP. “Service sector providers led the increase and the goods sector gains were broad based, reporting the strongest reading of the year. Large companies fueled the stronger recovery in October, marking the second straight month of impressive growth.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is revving back up as the Delta wave of the pandemic winds down. Job gains are accelerating across all industries, and especially among large companies. As long as the pandemic remains contained, more big job gains are likely in coming months.”
emphasis added

This was well above the consensus forecast of 400,000 for this report.

The BLS report will be released Friday, and the consensus is for 413 thousand non-farm payroll jobs added in October. The ADP report has not been very useful in predicting the BLS report.

by Calculated Risk on 11/03/2021 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

— Mortgage applications decreased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 29, 2021.

... The Refinance Index decreased 4 percent from the previous week and was 33 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year ago.

“Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed Treasury yields lower. Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Government refinance applications fell for the sixth straight week, as it becomes evident that an increasing number of borrowers have already refinanced.”

Added Kan, “Purchase activity continues to be held back by high prices and low for-sale inventory, but current applications levels still point to healthy housing demand. MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.24 percent from 3.30 percent, with points remaining unchanged at 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index since 1990.

With relatively low rates, the index remains somewhat elevated - but the recent bump in rates has slowed activity to the lowest level since January 2020.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 9% year-over-year unadjusted.

Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity was strong in the second half of 2020.

Note: Red is a four-week average (blue is weekly).

by Calculated Risk on 11/02/2021 09:00:00 PM

Here is my FOMC Preview: Taper Announcement Expected.

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:15 AM, The ADP Employment Report for October. This report is for private payrolls only (no government).  The consensus is for 400,000 jobs added, down from 568,000 in September.

• At 10:00 AM, the ISM Services Index for October.  The consensus is for a decrease to 59.5 from 61.9.

• At 2:00 PM, FOMC Meeting Announcement. The FOMC is expected to announce tapering of asset purchases at this meeting.

• At 2:30 PM, Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

by Calculated Risk on 11/02/2021 06:29:00 PM

Wards Auto released their estimate of light vehicle sales for October. Wards Auto estimates sales of 12.99 million SAAR in October 2021 (Seasonally Adjusted Annual Rate), up 6.8% from the September sales rate, and down 20.8% from October 2020. 

This was well above the consensus estimate of 12.4 million SAAR.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for October (red).

The impact of COVID-19 was significant, and April 2020 was the worst month.

After April 2020, sales increased, and were close to sales in 2019 (the year before the pandemic).  

However, sales decreased earlier this year due to supply issues. It appears the "supply chain bottom" was in September.

by Calculated Risk on 11/02/2021 05:35:00 PM

The BEA released the underlying details for the Q3 advance GDP report on Friday.

The BEA reported that investment in non-residential structures increased at a 2.4% annual pace in Q3. Note that weakness in non-residential structures started in 2019, before the pandemic.  

Investment in petroleum and natural gas structures increased sharply in Q3 compared to Q2, and was up 67% year-over-year.   

Click on graph for larger image.

The first graph shows investment in offices, malls and lodging as a percent of GDP.

Investment in offices (blue) increased slightly in Q3, and was down 4.9% year-over-year.

Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 2% year-over-year in Q3 - and near a record low as a percent of GDP.   The vacancy rate for malls is still very high, so investment will probably stay low for some time.

Lodging investment decreased slightly in Q3 compared to Q2, and lodging investment was down 29% year-over-year.

All three sectors - offices, malls, and hotels - are being hurt significantly by the pandemic.

The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).

Even though investment in single family structures has increased from the bottom, single family investment is just approaching normal levels as a percent of GDP.

Investment in single family structures was $411 billion (SAAR) (about 1.8% of GDP), and up 38% year-over-year.

Investment in multi-family structures decreased slightly in Q3.

Investment in home improvement was at a $324 billion Seasonally Adjusted Annual Rate (SAAR) in Q2 (about 1.4% of GDP).  Home improvement spending has been strong during the pandemic.

Note that Brokers' commissions (black) increased sharply last year as existing home sales increased in the second half of 2020, but was down in Q2 and Q3.   Brokers' commissions were up 7% year-over-year in Q2.

by Calculated Risk on 11/02/2021 02:50:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 423,005,384, as of a week ago 414,302,192, or 1.24 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	58.0%	57.4%	≥70.0%1
Fully Vaccinated (millions)	192.6	190.7	≥2321
New Cases per Day3🚩	74,798	67,184	≤5,0002
Hospitalized3	42,186	47,283	≤3,0002
Deaths per Day3🚩	1,190	1,174	≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 4 states that have achieved 70% of total population fully vaccinated: Vermont at 71.3%, Rhode Island, Connecticut, and Maine at 70.6% .

KUDOS also to the residents of the 13 states and D.C. that have achieved 60% of total population fully vaccinated: Massachusetts at 69.7%, New York, New Jersey, Maryland, New Mexico, New Hampshire, Washington, Oregon, Virginia, District of Columbia,  Colorado, California, Pennsylvania, and Illinois at 60.5%.

The following 22 states have between 50% and 59.9% fully vaccinated: Minnesota at 59.9%, Delaware, Hawaii, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina, Ohio, Montana, Oklahoma, and South Carolina at 50.1%.

Next up (total population, fully vaccinated according to CDC) are Indiana at 49.9%, Missouri at 49.8%, Georgia at 48.2%, and Arkansas at 48.1%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 11/02/2021 11:56:00 AM

Here is another monthly update on framing lumber prices.  

This graph shows CME random length framing futures through November 2nd.

Lumber was at $557 per 1000 board feet this morning.  

This is down from a peak of $1,733, and up $25 from a year ago.

Click on graph for larger image in graph gallery.

Lumber price are up 6% year-over-year.

There were supply constraints over the last year, for example, sawmills cut production and inventory at the beginning of the pandemic, and the West Coast fires in 2020 damaged privately-owned timberland (and maybe again in 2021).  

The supply constraints have eased somewhat.

And there was a huge surge in demand for lumber (demand remains strong).

by Calculated Risk on 11/02/2021 10:14:00 AM

The Census Bureau released the Residential Vacancies and Homeownership report for Q3 2021.

The results of this survey were significantly distorted by the pandemic in 2020.

This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates.  However, there are serious questions about the accuracy of this survey.

This survey might show the trend, but I wouldn't rely on the absolute numbers. Analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.

"National vacancy rates in the third quarter 2021 were 5.8 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate was 0.6 percentage points lower than the rate in the third quarter 2020 (6.4 percent) and 0.4 percentage points lower than the rate in the second quarter 2021 (6.2 percent).

The homeowner vacancy rate of 0.86 percent was lower than the rate in the third quarter 2020 (0.95 percent) and virtually the same as the rate in the second quarter 2021 (0.86 percent). (Note: the 0.86 percent and the 0.95 percent each round to 0.9 percent in the tables below).

The homeownership rate of 65.4 percent was 2.0 percentage points lower than the rate in the third quarter 2020 (67.4 percent) and virtually the same as the rate in the second quarter 2021 (65.4 percent). "
emphasis added

Click on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010.  The Census Bureau will released data for 2020 soon.

The HVS homeownership rate was unchanged at 65.4% in Q3, from 65.4% in Q2.

The results starting in Q2 2020 were distorted by the pandemic.

The HVS homeowner vacancy was unchanged at 0.9% in Q3.

Once again - this probably shows the general trend, but I wouldn't rely on the absolute numbers.

The rental vacancy rate decreased to 5.8% in Q3 from 6.2% in Q2.  This fits with other data suggesting strong rental demand in Q3.

The quarterly HVS is the most timely survey on households, but there are many questions about the accuracy of this survey.

by Calculated Risk on 11/02/2021 08:00:00 AM

Notes: This CoreLogic House Price Index report is for September. The recent Case-Shiller index release was for August. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: US Annual Home Price Growth Hits 18% in September as Supply and Demand Imbalances Intensify, CoreLogic Reports

CoreLogic® ... released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for September 2021.

Demand for homebuying remained strong through the end of the summer. However, the ongoing housing supply shortage has continued to drive up prices, which increased 18% year over year in September, to record highs creating additional challenges for entry into the homebuying market. High demand and low supply levels for entry-level homes, in particular, are sidelining many would-be first-time buyers.

As millennials continue to make up a large part of homebuying demand and flock to tech hubs like Seattle; San Jose, California and Austin, Texas, we may see this challenge intensify. This is reflected in a recent CoreLogic consumer survey, with 47.9% of this cohort stating they cannot afford to purchase a home in their preferred area.

“The pandemic led prospective buyers to seek detached homes in communities with lower population density, such as suburbs and exurbs,” said Frank Martell, president and CEO of CoreLogic. “As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”
...
Nationally, home prices increased 18% in September 2021, compared to September 2020. On a month-over-month basis, home prices increased by 1.1% compared to August 2021.
...
In September, appreciation of detached properties (19.6%) was 7.4 percentage points higher than that of attached properties (12.2%).
emphasis added

by Calculated Risk on 11/01/2021 09:02:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Catch Up To Last Week's Market Movement (That's a Good Thing)

Mortgage rates moved moderately lower today despite an absence of significant movement in the bond market. In general, when bonds improve, rates fall (and vice versa), but it's not feasible for mortgage lenders to adjust their rates offerings in relative real-time as bonds can send massively mixed signals on any given day. [30 year fixed 3.18%]
emphasis added

Tuesday:
• At 8:00 AM ET, Corelogic House Price index for September.

• At 10:00 AM, The Q3 Housing Vacancies and Homeownership report from the Census Bureau.

• All day, Light vehicle sales for October. The consensus is for sales of 12.4 million SAAR, up from 12.2 million SAAR in September (Seasonally Adjusted Annual Rate).

by Calculated Risk on 11/01/2021 04:00:00 PM

Note: This is as of October 24th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.15%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 6 basis points from 2.21% of servicers’ portfolio volume in the prior week to 2.15% as of October 24, 2021. According to MBA’s estimate, 1.1 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 0.97%. Ginnie Mae loans in forbearance decreased 7 basis points to 2.65%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 8 basis points to 5.13%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 6 basis points relative to the prior week to 2.43%, and the percentage of loans in forbearance for depository servicers decreased 4 basis points to 2.07%.

“For the first time since March 2020, the share of Fannie Mae and Freddie Mac loans in forbearance dropped below 1 percent. A small decline for this investor category was matched by similarly small declines for Ginnie Mae and portfolio/PLS loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance exits slowed at the end of October to the slowest pace since late August. With so many borrowers having reached the end of their 18-month forbearance term, we expect a steady pace of exits in November.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  The number of forbearance plans is decreasing rapidly recently since many homeowners have reached the end of the 18-month term.

Some stats on exits:

Of the cumulative forbearance exits for the period from June 1, 2020, through October 24, 2021, at the time of forbearance exit:
• 29.1% resulted in a loan deferral/partial claim.
• 20.6% represented borrowers who continued to make their monthly payments during their forbearance period.
• 16.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
• 13.1% resulted in a loan modification or trial loan modification.
• 12.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
• 7.1% resulted in loans paid off through either a refinance or by selling the home.
• The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.

by Calculated Risk on 11/01/2021 03:52:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 422,070,099, as of a week ago 413,645,478, or 1.20 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	58.0%	57.4%	≥70.0%1
Fully Vaccinated (millions)	192.5	190.6	≥2321
New Cases per Day3🚩	71,207	62,858	≤5,0002
Hospitalized3	41,287	47,878	≤3,0002
Deaths per Day3	1,151	1,196	≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 4 states that have achieved 70% of total population fully vaccinated: Vermont at 71.2%, Rhode Island, Connecticut, and Maine at 70.6% .

KUDOS also to the residents of the 13 states and D.C. that have achieved 60% of total population fully vaccinated: Massachusetts at 69.7%, New York, New Jersey, Maryland, New Mexico, New Hampshire, Washington, Oregon, Virginia, District of Columbia,  Colorado, California, Pennsylvania, and Illinois at 60.4%.

The following 22 states have between 50% and 59.9% fully vaccinated: Minnesota at 59.9%, Delaware, Hawaii, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina, Ohio, Montana, Oklahoma, and South Carolina at 50.0%.

Next up (total population, fully vaccinated according to CDC) are Indiana at 49.9%, Missouri at 49.8%, Georgia at 48.2%, and Arkansas at 48.0%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 11/01/2021 02:31:00 PM

Today, in the Real Estate Newsletter: The Rapid Increase in Rents Continues New Leases up Sharply year-over-year in September

Excerpt:

The Zillow measure is up 9.2% YoY in September, up from 8.4% YoY in August. And the ApartmentList measure is up 15.1% as of September, up from 12.5% in August. Both the Zillow measure (a repeat rent index), and ApartmentList are showing a sharp increase in rents.
...
Clearly rents are increasing sharply, and we should expect this to spill over into measures of inflation in 2022. The Owners Equivalent Rent (OER) was up 2.9% YoY in September, from 2.6% in August - and will increase further in the coming months.

by Calculated Risk on 11/01/2021 11:17:00 AM

Tracking existing home inventory will be very important this year.

Click on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.

As of October 29th, inventory was at 414 thousand (7 day average), compared to 543 thousand for the same week a year ago.  That is a decline of 23.9%.

Compared to the same week in 2019, inventory is down 55.0% from 919 thousand.  A week ago, inventory was at 423 thousand, and was down 23.1% YoY.   

Seasonally, inventory bottomed in April (usually inventory bottoms in January or February). Inventory was about 35% above the record low in early April.

Inventory peaked for the year in early September.   Eight weeks ago inventory was at 437 thousand (the peak for the year), so inventory is currently off about 5.4% from the peak for the year.  

Mike Simonsen discusses this data regularly on Youtube.  

Altos Research has also seen a significant pickup in price decreases - now well above the level of a year ago - but still below a normal rate for October.

by Calculated Risk on 11/01/2021 10:21:00 AM

From the Census Bureau reported that overall construction spending was "virtually unchanged":

Construction spending during September 2021 was estimated at a seasonally adjusted annual rate of $1,573.6 billion, 0.5 percent below the revised August estimate of $1,582.0 billion. The September figure is 7.8 percent above the September 2020 estimate of $1,459.3 billion.
emphasis added

Both private and public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $1,229.9 billion, 0.5 percent below the revised August estimate of $1,236.1 billion. ...

In September, the estimated seasonally adjusted annual rate of public construction spending was $343.7 billion, 0.7 percent below the revised August estimate of $345.9 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Residential spending is 14% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 10% above the bubble era peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 6% above the peak in March 2009, but weak recently.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 19.3%. Non-residential spending is down 0.5% year-over-year. Public spending is down 2.4% year-over-year.

Construction was considered an essential service during the early months of the pandemic in most areas, and did not decline sharply like many other sectors.  However, some sectors of non-residential have been under pressure. For example, lodging is down 32.8% YoY, and office down 2.9% YoY.

This was below consensus expectations of a 0.4% increase in spending, and construction spending for the previous two months was revised down.

by Calculated Risk on 11/01/2021 10:07:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion in September. The PMI® was at 60.8% in October, down from 61.1% in September. The employment index was at 52.0%, up from 50.2% last month, and the new orders index was at 59.8%, down from 66.7%.

From ISM: Manufacturing PMI® at 61.1% October 2021 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector grew in October, with the overall economy achieving a 17th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The October Manufacturing PMI® registered 60.8 percent, a decrease of 0.3 percentage point from the September reading of 61.1 percent. This figure indicates expansion in the overall economy for the 17th month in a row after a contraction in April 2020. The New Orders Index registered 59.8 percent, down 6.9 percentage points compared to the September reading of 66.7 percent. The Production Index registered 59.3 percent, a decrease of 0.1 percentage point compared to the September reading of 59.4 percent. The Prices Index registered 85.7 percent, up 4.5 percentage points compared to the September figure of 81.2 percent. The Backlog of Orders Index registered 63.6 percent, 1.2 percentage points lower than the September reading of 64.8 percent. The Employment Index registered 52 percent, 1.8 percentage points higher compared to the September reading of 50.2 percent. The Supplier Deliveries Index registered 75.6 percent, up 2.2 percentage points from the September figure of 73.4 percent. The Inventories Index registered 57 percent, 1.4 percentage points higher than the September reading of 55.6 percent. The New Export Orders Index registered 54.6 percent, an increase of 1.2 percentage points compared to the September reading of 53.4 percent. The Imports Index registered 49.1 percent, a 5.8-percentage point decrease from the September reading of 54.9 percent.”
emphasis added

This was at expectations, and this suggests manufacturing expanded at a slightly slower pace in October than in September.

by Calculated Risk on 11/01/2021 08:17:00 AM

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the pandemic subsides.

----- Airlines: Transportation Security Administration -----
The TSA is providing daily travel numbers.

This data is as of October 31st.

Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red).

The dashed line is the percent of 2019 for the seven day average.

The 7-day average is down 17.8% from the same day in 2019 (82.2% of 2019).  (Dashed line)

----- Restaurants: OpenTable -----
The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

IMPORTANT: OpenTable notes: "we’ve updated the data including downloadable dataset from January 1, 2021 onward to compare seated diners from 2021 to 2019, as opposed to year over year." Thanks!

Thanks to OpenTable for providing this restaurant data:

This data is updated through October 30, 2021.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Note that this data is for "only the restaurants that have chosen to reopen in a given market". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Dining picked up for the Labor Day weekend, but declined after the holiday - but might be picking up a little again.  The 7-day average for the US is down 4% compared to 2019.

----- Movie Tickets: Box Office Mojo -----
This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Blue is 2020 and Red is 2021.  

The data is from BoxOfficeMojo through October 28th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales were at $112 million last week, down about 25% from the median for the week. 

----- Hotel Occupancy: STR -----
This graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

This data is through October 23rd. The occupancy rate was down 9.1% compared to the same week in 2019.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

The Summer months had decent occupancy with solid leisure travel, and occupancy was only off about 7% in July and August compared to 2019. Usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.   However, this year, so far, business travel has been lighter than leisure travel in 2021.

----- Gasoline Supplied: Energy Information Administration -----
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Red is for 2021.

As of October 22nd, gasoline supplied was down 4.7% compared to the same week in 2019.

There have been seven weeks so far this year when gasoline supplied was up compared to the same week in 2019 - and consumption is running close to 2019 levels now.

----- Transit: Apple Mobility -----
This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

This data is through October 28th 

for the United States and several selected cities.

The graph is the running 7-day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7 day average for the US is at 114% of the January 2020 level. 

New York City is doing well by this metric, but subway usage in NYC is down sharply (next graph).

----- New York City Subway Usage -----
Here is some interesting data on New York subway usage (HT BR).

This graph is from Todd W Schneider. 

This graph shows how much MTA traffic has recovered in each borough (Graph starts at first week in January 2020 and 100 = 2019 average).

This data is through Friday, October 29th.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

by Calculated Risk on 10/31/2021 07:25:00 PM

Weekend:
• Schedule for Week of October 31, 2021

• FOMC Preview: Taper Announcement Expected

• 2022 Housing Forecasts: First Look Optimism on New Home Sales in 2022

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for October.  The consensus is for 60.5%, down from 61.1%. 

• At 10:00 AM, Construction Spending for September.  The consensus is for 0.4% increase in spending.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 6 and DOW futures are up 59 (fair value).

Oil prices were down over the last week with WTI futures at $82.84 per barrel and Brent at $83.05 per barrel. A year ago, WTI was at $36, and Brent was at $36 - so WTI oil prices are up more than double year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.38 per gallon. A year ago prices were at $2.10 per gallon, so gasoline prices are up $1.28 per gallon year-over-year.