by Calculated Risk on 5/15/2014 09:27:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production decreased 0.6 percent in April 2014 after having risen about 1 percent in both February and March. In April, manufacturing output fell 0.4 percent. The index had increased substantially in February and March following a decrease in January; severe weather had restrained production early in the quarter. The output of utilities dropped 5.3 percent in April, as demand for heating returned toward normal levels. The production at mines increased 1.4 percent following a gain of 2.0 percent in March. At 102.7 percent of its 2007 average, total industrial production in April was 3.5 percent above its level of a year earlier. The capacity utilization rate for total industry decreased 0.7 percentage point in April to 78.6 percent, a rate that is 1.5 percentage points below its long-run (1972–2013) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 11.7 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 78.6% is 1.5 percentage points below its average from 1972 to 2012 and below the pre-recession level of 80.8% in December 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased 0.6% in April to 102.7. This is 23% above the recession low, and 2.0% above the pre-recession peak.

The monthly change for both Industrial Production and Capacity Utilization were below expectations.

by Calculated Risk on 5/15/2014 08:30:00 AM

From the BLS on CPI:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. ....

The index for all items less food and energy rose 0.2 percent in April ... The all items index increased 2.0 percent over the last 12 months; this compares to a 1.5 percent increase for the 12 months ending March, and is the largest 12-month increase since July. The index for all items less food and energy has increased 1.8 percent over the last 12 months.

The consensus was for a 0.3% increase in CPI in April and for core CPI to increase 0.1%. I'll have more later on inflation.

The DOL reports:

In the week ending May 10, the advance figure for seasonally adjusted initial claims was 297,000, a decrease of 24,000 from the previous week's revised level. This is the lowest level for initial claims since May 12, 2007 when they were 297,000. The previous week's level was revised up by 2,000 from 319,000 to 321,000. The 4-week moving average was 323,250, a decrease of 2,000 from the previous week's revised average. The previous week's average was revised up by 500 from 324,750 to 325,250.

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

The previous week was revised up from 319,000.

The following graph shows the 4-week moving average of weekly claims since January 1971.

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 323,250.

This was below the consensus forecast of 317,000.  The 4-week average is close to normal levels for an expansion.

by Calculated Risk on 5/14/2014 07:17:00 PM

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 317 thousand from 319 thousand.

• Also at 8:30 AM, the Consumer Price Index for April. The consensus is for a 0.3% increase in CPI in April and for core CPI to increase 0.1%.

• Also at 8:30 AM, the NY Fed Empire Manufacturing Survey for May. The consensus is for a reading of 5.0, up from 1.3 in April (above zero is expansion).

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for April. The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 79.1%.

• At 10:00 AM, the May NAHB homebuilder survey. The consensus is for a reading of 48, up from 47 in April. Any number below 50 indicates that more builders view sales conditions as poor than good.

• Also at 10:00 AM, the Philly Fed manufacturing survey for May. The consensus is for a reading of 12.5, down from 16.6 last month (above zero indicates expansion).

• Also at 10:00 AM, the Mortgage Bankers Association (MBA) Q1 2014 National Delinquency Survey (NDS).

• At 6:10 PM, Speech by Fed Chair Janet Yellen, Small Businesses and the Economy, National Small Business Week 2014, Washington, D.C

Click on photo for larger image.

The San Diego fire today from Color Spot's nursery in Fallbrook.

Photo from a friend at Color Spot Nurseries.

by Calculated Risk on 5/14/2014 04:29:00 PM

From housing economist Tom Lawler:

In a report that got a huge amount of media coverage, RealtyTrac alleged that the all-cash share of home purchases hit a record 42.7% last quarter, up from 19.1% in the first quarter of 2013. This increase was “shockingly” large, and occurred despite a decline in the institutional investor share of home purchases. If correct, it is not surprising that this would be “big news.” In reality, however, they are not ...

Click on graph for larger image.

Here is a chart from RealtyTrac. The blue line is the All-Cash Share.

According to RealtyTrac’s tabulations, the all-cash share of home purchases surged in the third quarter of 2013, and has continued to increase, and last quarter it was more than double the year-earlier share.

Data from other sources, in contrast, strongly indicate that the all-cash share of home purchases has been declining over the last year – not just MLS-based reports (such as the one’s I track, but from another entity (CoreLogic) that uses property and mortgage records.

The RealtyTrac data from 2011 through the second quarter of 2013 show a MASSIVELY lower all-cash share of home purchases than does CoreLogic, or that local MLS data would suggest. CoreLogic, e.g., estimated that the all-cash share of home purchases in the first quarter of 2013 was a tad over 40%, compared to RealtyTrac’s estimate of 19.1%. While I don’t have CoreLogic’s estimates for Q1 2014 yet, I’m pretty sure it will show a drop from the first quarter of 2013 of at least five percentage points. (I’m hoping CoreLogic will send me their Q1/2014 estimates soon.)

Below are some all-cash shares of home purchases for various areas – most based on MLS data, but some based on property records tabulated by Dataquick – for March of this year vs. March 2013.

In looking at both these data and the CoreLogic estimates, how can it POSSIBLY be true that the all-cash share of home sales in the first quarter of 2013 was just 19.1%, or that the all-cash share of home sales in the first quarter of 2014 was more than double that of 2013?

The simple answer is ...it can’t.

	All-Cash Share
	Mar-14	Mar-13
Las Vegas	43.1%	57.5%
Seattle*	22.8%	23.9%
Phoenix	33.1%	41.5%
Sacramento	22.5%	36.5%
Miami*	62.5%	66.6%
Mid-Atlantic	19.9%	20.6%
Orlando	44.6%	55.6%
Bay Area CA*	25.0%	31.0%
So. California*	29.1%	35.1%
Toledo	40.7%	38.9%
Wichita	32.0%	27.9%
Des Moines	20.8%	19.1%
Peoria	21.3%	21.7%
Florida SF	45.5%	48.3%
Florida C/TH	70.9%	74.9%
Tucson	33.5%	35.0%
Omaha	20.3%	22.1%
Georgia***	33.8%	NA
*share of existing home sales, based on property records **Single Family Only ***GAMLS

by Calculated Risk on 5/14/2014 02:58:00 PM

From DataQuick: Bay Area Home Prices Continue to Rise; Sales Up from March, Flat Yr/Yr

A total of 7,555 new and resale houses and condos were sold in the nine-county Bay Area last month. That was up 19.8 percent from 6,308 in March and down 0.9 percent from 7,621 in April a year ago, according to San Diego-based DataQuick.

Bay Area sales generally increase from March to April, but the 19.8 percent increase this year was high. The average increase is 4.8 percent. ...

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 3.6 percent of resales in April, down from a revised 4.3 percent the month before, and down from 8.4 percent a year ago. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 17 years is 9.9 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 3.8 percent of Bay Area resales last month. That was down from an estimated 4.6 percent in March and down from 11.8 percent a year earlier.

Last month absentee buyers – mostly investors – purchased 20.2 percent of all Bay Area homes. That was down from March’s 20.7 percent and down from 24.2 percent for April a year ago.
emphasis added

Sales declined 0.9% year-over-year in April compared to a 12.9% year-over-year decline in March.

And even though total sales were still down slightly year-over-year, the percent of non-distressed sales is up almost 15%.  There were 7,555 total sales this year in April, and 7.4% were distressed.  In April 2013, there were 7,621 total sales, and 20.1% were distressed.  A big positive change.