by Calculated Risk on 8/22/2013 01:12:00 PM

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for July 2013. In the past month, the indexes increased in 34 states, decreased in nine states, and remained stable in seven, for a one-month diffusion index of 50. Over the past three months, the indexes increased in 38 states, decreased in nine, and remained stable in three, for a three-month diffusion index of 58.

Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Click on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In July, 38 states had increasing activity, the same as in June (including minor increases). This measure has been and up down over the last few years ...


Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and all green at times during the recovery.

There are several states with declining activity again.

by Calculated Risk on 8/22/2013 11:00:00 AM

From the Kansas City Fed: Tenth District Manufacturing Survey Improved Further

The Federal Reserve Bank of Kansas City released the August Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity improved further, and producers’ expectations also edged higher after easing last month.

“Although some District firms noted weakness in August associated with federal spending cuts and difficulties finding workers, we were encouraged to see another solid gain in our composite index and most of its components,” said Wilkerson

The month-over-month composite index was 8 in August, up from 6 in July and -5 in June ... production index remained solid at 21, and the new orders and order backlog indexes also rose moderately. The new orders for exports index edged higher from 2 to 4, and the employment index moved into positive territory for the first time in six months.
emphasis added

A few industry comments from the survey:

“More projects are being delayed by government-related entities.”

“Our defense business is down significantly.”

“Sequestration is hitting us very hard. The heavy infrastructure market is way down due to lack of federal spending.”

Earlier today Markit released their Flash PMI: Manufacturing recovery gains momentum as order growth hits seven-month high

The Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled the strongest improvement in manufacturing business conditions in five months during August. The flash PMI index, which is based on approximately 85% of usual monthly replies, was up slightly from July’s 53.7 to 53.9, and suggested a moderate expansion of the manufacturing sector.

Firms received a larger volume of new orders in August, with a number of companies linking this to greater demand and new client wins. Moreover, the rate of growth was strong and, having accelerated for the fourth month running, the fastest since January.
...
Manufacturing employment increased for the second month running in August. The rate of job creation was moderate and, having quickened slightly since July, the fastest in four months. Firms that hired additional staff generally cited increased workloads.

The Dallas and Richmond Fed regional surveys for August will be released early next week.  So far the regional surveys (and the Markit Flash PMI) suggest continued expansion for manufacturing in August.

by Calculated Risk on 8/22/2013 08:30:00 AM

The DOL reports:

In the week ending August 17, the advance figure for seasonally adjusted initial claims was 336,000, an increase of 13,000 from the previous week's revised figure of 323,000. The 4-week moving average was 330,500, a decrease of 2,250 from the previous week's revised average of 332,750.

The previous week was revised up from 320,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.

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 decreased to 330,500.

The 4-week average is at the lowest level since November 2007 (before the recession started).  Claims were above the 329,000 consensus forecast.

Here is a long term graph of the 4-week average of weekly unemployment claims back to 1971.

by Calculated Risk on 8/21/2013 09:13:00 PM

Probably the key sentences in the FOMC minutes released today were:

In considering the likely path for the Committee's asset purchases, members discussed the degree of improvement in the labor market outlook since the purchase program began last fall. The unemployment rate had declined considerably since then, and recent gains in payroll employment had been solid. However, other measures of labor utilization--including the labor force participation rate and the numbers of discouraged workers and those working part time for economic reasons--suggested more modest improvement, and other indicators of labor demand, such as rates of hiring and quits, remained low. While a range of views were expressed regarding the cumulative improvement in the labor market since last fall, almost all Committee members agreed that a change in the purchase program was not yet appropriate.
emphasis added

This is a reminder that the FOMC is looking at more than improvement in the headline payroll numbers and the unemployment rate.

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 329 thousand from 320 thousand last week.

• At 9:00 AM, the Markit US PMI Manufacturing Index Flash for August. The consensus is for an increase to 53.5 from 53.2 in July.

• Also at 9:00 AM, the FHFA House Price Index for June 2013. This was originally a GSE only repeat sales, however there is also an expanded index that deserves more attention. The consensus is for a 0.6% increase.

• At 11:00 AM, the Kansas City Fed Survey of Manufacturing Activity for July. The consensus is for a reading of 5 for this survey, down from 6 in July (Above zero is expansion).

by Calculated Risk on 8/21/2013 06:32:00 PM

Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for selected cities in July.

From CR: Look at the two columns in the table for Total "Distressed" Share.  The share of distressed sales is down year-over-year in every area. 

Also there has been a decline in foreclosure sales in all of these areas (except Springfield, Ill).  

And short sales are now declining year-over-year too!  This is a recent change - short sales had been increasing year-over-year, but it looks like both categories of distressed sales are now declining.

The All Cash Share is mostly staying steady or declining slightly.  The all cash share will probably decline as investors decrease their buying.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Jul-13	Jul-12	Jul-13	Jul-12	Jul-13	Jul-12	Jul-13	Jul-12
Las Vegas	28.0%	40.0%	8.0%	20.7%	36.0%	60.7%	54.5%	54.8%
Reno	21.0%	38.0%	7.0%	15.0%	28.0%	53.0%
Phoenix	11.5%	29.5%	9.4%	14.6%	20.8%	44.1%	35.8%	44.9%
Sacramento	19.7%	31.0%	7.3%	23.2%	27.0%	54.2%	25.5%	31.1%
Minneapolis	5.6%	9.3%	15.0%	24.5%	20.6%	33.8%
Mid-Atlantic	7.2%	11.3%	6.6%	8.7%	13.8%	20.0%	16.1%	17.9%
Orlando	12.8%	28.2%	17.3%	23.4%	30.1%	51.6%	47.6%	49.7%
California (DQ)*	14.6%	26.0%	8.4%	21.7%	23.0%	47.7%
Bay Area CA (DQ)*	10.0%	23.7%	4.8%	15.1%	14.8%	38.8%	24.0%	27.6%
So. California (DQ)*	14.5%	26.2%	7.8%	20.7%	22.3%	46.9%	29.4%	31.8%
Florida SF	13.8%	21.6%	15.9%	17.5%	29.7%	39.2%	42.5%	42.8%
Florida C/TH	11.0%	19.2%	15.4%	17.5%	26.5%	36.8%	70.0%	72.9%
Miami MSA SF	17.4%	23.0%	12.6%	16.5%	30.0%	39.5%	44.0%	43.1%
Miami MSA C/TH	12.8%	20.5%	17.5%	19.6%	30.3%	40.1%	75.5%	78.3%
Northeast Florida					32.5%	42.6%
Chicago					29.0%	36.0%
Rhode Island					13.9%	24.7%
Charlotte					9.5%	13.8%
Toledo							35.0%	36.5%
Wichita							24.1%	25.3%
Knoxville							25.7%	26.5%
Des Moines							15.1%	18.0%
Peoria							18.6%	20.7%
Tucson							29.1%	33.1%
Omaha							15.9%	15.6%
Pensacola							30.0%	31.2%
Akron							25.5%	30.0%
Houston			7.8%	16.3%
Memphis*			16.7%	26.9%
Birmingham AL			17.2%	27.2%
Springfield IL			13.1%	13.0%
*share of existing home sales, based on property records