by Calculated Risk on 7/03/2013 08:19:00 AM

From ADP:

Private sector employment increased by 188,000 jobs from May to June, according to the June ADP National Employment Report®. ... May’s job gains were revised downward to 134,000 from 135,000.
...
Mark Zandi, chief economist of Moody’s Analytics, said, "The job market continues to gracefully navigate through the strongly blowing fiscal headwinds. Health Care Reform does not appear to be significantly hampering job growth, at least not so far. Job gains are broad based across industries and businesses of all sizes."

This was above the consensus forecast for 165,000 private sector jobs added in the ADP report. Note:  The BLS reports on Friday, and the consensus is for an increase of 175,000 payroll jobs in June, on a seasonally adjusted (SA) basis.

Note: ADP hasn't been very useful in predicting the BLS report.

by Calculated Risk on 7/03/2013 07:01:00 AM

From the MBA: Mortgage Applications Decrease as Rates Reach Two-year High in Latest MBA Weekly Survey

The Refinance Index decreased 16 percent from the previous week and is at its lowest level since July 2011. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier.
...
“Mortgage rates reached their highest point in two years last week. At these rates, many fewer homeowners have an incentive to refinance, and refinance application volume declined more than 15 percent. With this decline in volume, the refinance share dropped to its lowest level in more than two years. Purchase application volume also declined, but not nearly to the same extent, as affordability remains strong,” said Mike Fratantoni, MBA’s Vice President of Research and Economics
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less)increased to 4.58 percent, the highest rate since July 2011, from 4.46 percent, with points increasing to 0.43 from 0.35 (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.

With 30 year mortgage rates above 4.5%, refinance activity has fallen sharply, decreasing in 7 of the last 8 weeks.

This index is down 48% over the last eight weeks.

The second graph shows the MBA mortgage purchase index.  The 4-week average of the purchase index has generally been trending up over the last year, and the 4-week average of the purchase index is up almost 10% from a year ago.

by Calculated Risk on 7/02/2013 08:10:00 PM

The Egyptian "deadline" is tomorrow, from CNN: Showdown? Egypt's Morsy defies military 'ultimatum'

Egyptian President Mohamed Morsy refused Tuesday to bow to a military ultimatum that he find a solution to the unrest sweeping the country or be pushed aside, setting the stage for a possible showdown.

Morsy declared he was elected president in balloting that was free and representative of the will of the people.
...
It was unclear what steps the military would take given Morsy's refusal to meet its Wednesday evening deadline. The military has previously stopped short of saying that it was suggesting a coup.

Hoping for the best for the people of Egypt.

Wednesday:
• Early: the Reis Q2 2013 Mall Survey of rents and vacancy rates.

• 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 June will be released. This report is for private payrolls only (no government). The consensus is for 165,000 payroll jobs added in June.

• At 8:30 AM, the Trade Balance report for May from the Census Bureau. The consensus is for the U.S. trade deficit to increase to $40.8 billion in May from $40.3 billion in April.

• Also at 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for a decrease to 345 thousand from 346 thousand last week.

• At 10:00 AM, the ISM non-Manufacturing Index for June will be released. The consensus is for a reading of 54.5, up from 53.7 in May. Note: Above 50 indicates expansion, below 50 contraction.

• Also at 10:00 AM, the Trulia Price Rent Monitors for June. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

by Calculated Risk on 7/02/2013 03:59:00 PM

Based on an estimate from WardsAuto, light vehicle sales were at a 15.89 million SAAR in June. That is up 12% from June 2012, and up 4% from the sales rate last month.

This was above the consensus forecast of 15.5 million SAAR (seasonally adjusted annual rate).

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for June (red, light vehicle sales of 15.89 million SAAR from WardsAuto).


Click on graph for larger image.

This is highest level for auto sales since November 2007.

After three consecutive years of double digit auto sales growth, the growth rate will probably slow in 2013 - but this will still be another solid year for the auto industry.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate.

Unlike residential investment, auto sales bounced back fairly quickly following the recession and had been a key driver of the recovery.    Looking forward, growth will slow for auto sales.  If sales average the recent pace for the entire year, total sales will be up about 8% from 2012.

by Calculated Risk on 7/02/2013 01:32:00 PM

Note: I'll post a graph for light vehicle sales once all of the data is available. The data released so far looks pretty strong ...

From the WSJ: U.S. Car Sales Pace Hits Five Year High

U.S. auto sales rose at the strongest rate in more than five years in June, propelled by a surge in pickup truck demand, lending new confidence to industry executives' belief the nation's auto recovery has more room to run.

General Motors Co predicted June's annualized selling clip would hit 15.8 million cars and light trucks. That would be the fastest selling pace since November of 2007. A total for June was not available early Tuesday because some auto makers were still calculating their sales figures.

And from CNBC: Trucks Power Strongest June Auto Sales Since 2007

The auto industry looks to have hit another gear when it comes to sales growth. In fact, the June sales pace is expected to be the strongest since December of 2007. This time though, the environment is completely different. Back then, automakers, especially the Big 3, were boosting sales by offering big incentives. That's not happening anymore.

"This time there is genuine demand," said former GM Vice Chair Bob Lutz. "The economy is improving and people are replacing their cars and trucks."