by Calculated Risk on 5/01/2014 10:29:00 AM

The Census Bureau reported that overall construction spending increased in March:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2014 was estimated at a seasonally adjusted annual rate of $942.5 billion, 0.2 percent above the revised February estimate of $940.8 billion. The March figure is 8.4 percent above the March 2013 estimate of $869.2 billion.

Private spending increased and public spending decreased in March:

Spending on private construction was at a seasonally adjusted annual rate of $679.6 billion, 0.5 percent above the revised February estimate of $676.3 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $262.9 billion, 0.6 percent below the revised February estimate of $264.5 billion.
emphasis added

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.

Private residential spending is 45% below the peak in early 2006, and up 62% from the post-bubble low.

Non-residential spending is 25% below the peak in January 2008, and up about 38% from the recent low.

Public construction spending is now 19% below the peak in March 2009 and at a new post-recession low.

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

On a year-over-year basis, private residential construction spending is now up 16%. Non-residential spending is up 8 year-over-year. Public spending is down 1% year-over-year.


Looking forward, all categories of construction spending should increase in 2014. Residential spending is still very low, non-residential is starting to pickup, and public spending is probably near a bottom. 

Note: Public construction spending is at the lowest level since 2006 (lowest since 2001 adjusted for inflation).  Not investing more in infrastructure is probably one of the major policy failures of the last 5+ years. 

by Calculated Risk on 5/01/2014 10:00:00 AM

The ISM manufacturing index suggests faster expansion in April than in March. The PMI was at 54.9% in April, up from 53.7% in March. The employment index was at 54.7%, up from 51.1% in March, and the new orders index was at 55.1%, unchanged from 55.1% in March.

From the Institute for Supply Management: April 2014 Manufacturing ISM Report On Business®

Economic activity in the manufacturing sector expanded in April for the 11th consecutive month, and the overall economy grew for the 59th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The April PMI® registered 54.9 percent, an increase of 1.2 percentage points from March's reading of 53.7 percent, indicating expansion in manufacturing for the 11th consecutive month. The New Orders Index registered 55.1 percent, equal to the reading in March, indicating growth in new orders for the 11th consecutive month. The Production Index registered 55.7 percent, slightly below the March reading of 55.9 percent. Employment grew for the 10th consecutive month, registering 54.7 percent, an increase of 3.6 percentage points over March's reading of 51.1 percent. Comments from the panel generally remain positive; however, some expressed concern about international economic and political issues potentially impacting demand."
emphasis added

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was above expectations of 54.2%.

by Calculated Risk on 5/01/2014 08:34:00 AM

The DOL reports:

In the week ending April 26, the advance figure for seasonally adjusted initial claims was 344,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 329,000 to 330,000. The 4-week moving average was 320,000, an increase of 3,000 from the previous week's revised average. The previous week's average was revised up by 250 from 316,750 to 317,000.

There were no special factors impacting this week's initial claims.

The previous week was revised up from 329,000.

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 increased to 320,000.

This was above the consensus forecast of 320,000.  Even with the increase, the 4-week average is close to normal levels for an expansion.

by Calculated Risk on 4/30/2014 08:53:00 PM

A very busy day ...

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

• Also at 8:30 AM, Personal Income and Outlays for March. The consensus is for a 0.4% increase in personal income, and for a 0.6% increase in personal spending. And for the Core PCE price index to increase 0.2%.

• Also at 8:30 AM, Speech by Fed Chair Janet Yellen, Community Bank Supervision, At the Independent Community Bankers of America 2014 Washington Policy Summit, Washington, D.C.

• At 9:00 AM, the Markit US PMI Manufacturing Index for April.

• At 10:00 AM, the ISM Manufacturing Index for April. The consensus is for an increase to 54.2 from 53.7 in March. The ISM employment index was at 51.1% in March, and the new orders index was at 55.1%.

• At 10:00 AM, Construction Spending for March. The consensus is for a 0.6% increase in construction spending.

by Calculated Risk on 4/30/2014 05:43:00 PM

Fannie Mae reported today that the Single-Family Serious Delinquency rate declined in March to 2.19% from 2.27% in February. The serious delinquency rate is down from 3.02% in  March 2013, and this is the lowest level since November 2008.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Earlier Freddie Mac reported that the Single-Family serious delinquency rate declined in March to 2.20% from 2.29% in February. Freddie's rate is down from 3.03% in March 2013, and is at the lowest level since February 2009. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

Note: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

Both Fannie Mae and Freddie Mac serious delinquency rates have fallen 0.83 percentage points over the last year, and at that pace the serious delinquency rates will probably be below 2% mid-year 2014 - and will be under 1% in late 2015.

Note: The "normal" serious delinquency rate is under 1%.

Maybe serious delinquencies will be back to normal in late 2015 or 2016.