by Calculated Risk on 8/29/2011 03:32:00 PM

In June, Tom Lawler posted on how the NAR estimates existing home inventory. The NAR does NOT aggregate data from the local boards (see Tom's post for how the NAR estimates inventory). Sometime this fall, the NAR will revise down their estimates of inventory and sales for the last few years. Also the NAR methodology for estimating sales and inventory will likely (hopefully) be changed.

I think the HousingTracker / DeptofNumbers data that Tom mentioned might provide a timely estimate of changes in inventory. Ben at deptofnumbers.com is tracking the aggregate monthly inventory for 54 metro areas.

Click on graph for larger image in graph gallery.

This graph shows the NAR estimate of existing home inventory through July (left axis) and the HousingTracker data for the 54 metro areas through August. The HousingTracker data shows a steeper decline in inventory over the last few years (as mentioned above, the NAR will probably revise down their inventory estimates this fall).

The second graph shows the year-over-year change in inventory for both the NAR and HousingTracker.

HousingTracker reported that the August listings - for the 54 metro areas - declined 14.1% from last year.

Of course there is a large percentage of distressed inventory, and various categories of "shadow inventory" too. But the decline in listed inventory is something to watch carefully all year.

Earlier:
• Personal Income increased 0.3% in July, Spending increased 0.8%
• Comparison of Regional Fed Manufacturing Surveys and ISM
Weekend:
• Summary for Week Ending August 26th (with plenty of graphs)
• Schedule for Week of Aug 28th

by Calculated Risk on 8/29/2011 01:48:00 PM

Perhaps some progress on the next bailout for Greece ...

From Dow Jones: Finland Working To Resolve Collateral Issue - Foreign Minister

Finland expects a solution to be found for its demand for collateral from Greece before contributing to the bailout fund, the country's European Affairs and Foreign Minister said Monday.

"Finland is not out to cause problems, but to find solutions," Alexander Stubb told a joint news conference in Helsinki, after a lunch with German Deputy Foreign Minister Werner Hoyer

From Bloomberg: Germany’s Hoyer Tells Finns to ‘Not Rock the Boat’ on Euro

German Deputy Foreign Minister Werner Hoyer warned euro-area countries not to destabilize the currency after Finland demanded collateral in return for agreeing to a second Greek aid package.

The euro is “of utmost importance to all of us in Europe, in particular for countries like Finland and Germany,” Hoyer told reporters at a joint news conference in Helsinki today with Finnish Foreign Trade Minister Alexander Stubb. “So let us not rock the boat.”
...
Germany is “approaching the question with care” and will wait to see the outcome of the collateral model that transpires, Hoyer said. “Finland doesn’t have the reputation as a troublemaker, so I’m very optimistic.”

The Greek 2 year yield is at 45.6% and the 10 year yield increased to 18.1% today.

Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. And for Spain to Germany. The Italian spread is at 286, down from 389 on Aug 4th, and the Spanish spread is at 279, down from 398 on Aug 4th. Moving sideways.

The Portuguese 2 year yield is down a little to 13.2%. Also the Irish 2 year yield is at 8.6%. And the French 10 year is at 2.9%. So this is a Greek issue right now.

Here are the links for bond yields for several countries (source: Bloomberg):

Greece	2 Year	5 Year	10 Year
Portugal	2 Year	5 Year	10 Year
Ireland	2 Year	5 Year	10 Year
Spain	2 Year	5 Year	10 Year
Italy	2 Year	5 Year	10 Year
Belgium	2 Year	5 Year	10 Year
France	2 Year	5 Year	10 Year
Germany	2 Year	5 Year	10 Year

Earlier:
• Personal Income increased 0.3% in July, Spending increased 0.8%
• Summary for Week Ending August 26th (with plenty of graphs)
• Schedule for Week of Aug 28th

by Calculated Risk on 8/29/2011 10:30:00 AM

From the Dallas Fed: Texas Manufacturing Activity Flat

Texas factory activity was largely unchanged in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained positive but fell from 10.8 to 1.1, suggesting growth stalled this month.

The new orders index fell from 16 to 4.8 this month, suggesting order volumes continued to increase, but at a decelerated pace. ... The capacity utilization index dipped into negative territory in August, with one-quarter of manufacturers noting a decrease ... The employment index came in at 5.4, down from 12.1 in July. Twenty-three percent of manufacturers reported hiring new workers, while 17 percent reported layoffs. The hours worked index fell from 7.9 to –2.2, suggesting average workweeks shrank.

This was above the consensus view of -6.

This is the last of the regional Fed surveys for August. The regional surveys provide a hint about the ISM manufacturing index - and the regional surveys were very weak in August.

Click on graph for larger image in graph gallery.

The New York and Philly Fed surveys are averaged together (dashed green, through August), and five Fed surveys are averaged (blue, through August) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through July (right axis).

The early surveys in August were especially weak (Philly Fed and Empire State), although the surveys later in the month were a little better. Both the Kansas City and Texas surveys showed slight expansion in August, although the Richmond survey showed contraction. The ISM index for August will be released Thursday, Sept 1st, and the consensus is for a decrease to 48.5 from 50.9 in July.

Earlier:
• Personal Income increased 0.3% in July, Spending increased 0.8%
• Summary for Week Ending August 26th (with plenty of graphs)
• Schedule for Week of Aug 28th

by Calculated Risk on 8/29/2011 10:00:00 AM

From the NAR: Pending Home Sales Slip in July but Up Strongly From One Year Ago

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.
...
The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

The consensus was for a 1% decrease in the index. This suggests existing home sales will stay weak.

Earlier:
• Personal Income increased 0.3% in July, Spending increased 0.8%
• Summary for Week Ending August 26th (with plenty of graphs)
• Schedule for Week of Aug 28th

by Calculated Risk on 8/29/2011 08:30:00 AM

The BEA released the Personal Income and Outlays report for July:

Personal income increased $42.4 billion, or 0.3 percent ... in July ... Personal consumption expenditures (PCE) increased $88.4 billion, or 0.8 percent.
...
Real PCE increased 0.5 percent ... The price index for PCE increased 0.4 percent in July

The following graph shows real Personal Consumption Expenditures (PCE) through July (2005 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image in graph gallery.

PCE increased 0.8 in July, and real PCE increased 0.5% as the price index for PCE increased 0.4 percent in July.

Note: The PCE price index, excluding food and energy, increased 0.2 percent, the same increase as in June.

The personal saving rate was at 5.0% in July.

Personal saving -- DPI less personal outlays -- was $582.8 billion in July, compared with $638.6 billion in June. Personal saving as a percentage of disposable personal income was 5.0 percent in July, compared with 5.5 percent in June.

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the June Personal Income report.

Real PCE was revised up a little for Q2 too. This was a solid increase in spending and above the consensus of 0.5% - however I expect August to be weaker due to the confidence shattering debt ceiling debate.