by Calculated Risk on 6/30/2014 08:18:00 PM

From the National Restaurant Association: Restaurant Performance Index Rose to Its Highest Level in More Than Two Years

Driven by stronger sales and traffic levels and an increasingly optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to its highest level in more than two years. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 102.1 in May, the third consecutive monthly gain and strongest reading since March 2012. In addition, the RPI stood above 100 for the 15th consecutive month, which signifies expansion in the index of key industry indicators.
...
“Positive sales results fueled the May increase in the RPI, as nearly two-thirds of restaurant operators said their same-store sales rose above year-ago levels,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, restaurant operators are increasingly optimistic about continued sales gains in the months ahead, a sentiment that is also showing up in their capital expenditure plans.”
emphasis added

Click on graph for larger image.

The index increased to 102.1 in May, up from 101.7 in April. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month - and this is a solid reading.

Tuesday:
• Early: Reis Q2 2014 Office Survey of rents and vacancy rates.

• All day: Light vehicle sales for June. The consensus is for light vehicle sales to decrease to 16.4 million SAAR in June from 16.7 million in May (Seasonally Adjusted Annual Rate).

• At 10:00 AM ET, the ISM Manufacturing Index for June. The consensus is for an increase to 55.6 from 55.4 in May. In May the employment index was at 52.8%, and the new orders index was at 56.9%.

• At 10:00 AM, Construction Spending for May. The consensus is for a 0.5% increase in construction spending.

by Calculated Risk on 6/30/2014 05:12:00 PM

Here is another weekly update on housing inventory ...

There is a clear seasonal pattern for inventory, with the low point for inventory in late December or early January, and then usually peaking in mid-to-late summer.

The Realtor (NAR) data is monthly and released with a lag (the most recent data released was for May).  However Ben at Housing Tracker (Department of Numbers) has provided me some weekly inventory data for the last several years.

Click on graph for larger image.

This graph shows the Housing Tracker reported weekly inventory for the 54 metro areas for 2010, 2011, 2012, 2013 and 2014.

In 2011 and 2012, inventory only increased slightly early in the year and then declined significantly through the end of each year.

In 2013 (Blue), inventory increased for most of the year before declining seasonally during the holidays.  Inventory in 2013 finished up 2.7% YoY compared to 2012.

Inventory in 2014 (Red) is now 14.0% above the same week in 2013. (Note: There are differences in how the data is collected between Housing Tracker and the NAR).

Also inventory is now above the same week in 2012.   This increase in inventory should slow price increases, and might lead to price declines in some areas.

Note: One of the key questions for 2014 will be: How much will inventory increase?  My guess was inventory would be up 10% to 15% year-over-year at the end of 2014 based on the NAR report.  Right now it looks like inventory might increase more than I expected.

by Calculated Risk on 6/30/2014 04:28:00 PM

Fannie Mae reported today that the Single-Family Serious Delinquency rate declined in May to 2.08% from 2.13% in April. The serious delinquency rate is down from 2.83% in May 2013, and this is the lowest level since October 2008.

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

Last week, Freddie Mac reported that the Single-Family serious delinquency rate declined in May to 2.10% from 2.15% in April. Freddie's rate is down from 2.85% in May 2013, and is at the lowest level since January 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

The Fannie Mae serious delinquency rate has fallen 0.75 percentage points over the last year, and at that pace the serious delinquency rate 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.

by Calculated Risk on 6/30/2014 01:55:00 PM

Just an update to the weekly schedule ... adding the quarterly Reis surveys of rents and vacancy rates for offices, apartments and malls.

----- Tuesday, July 1st -----
Early: Reis Q2 2014 Office Survey of rents and vacancy rates.

----- Wednesday, July 2nd -----
Early: Reis Q2 2014 Apartment Survey of rents and vacancy rates.

----- Thursday, July 3rd -----
Early: Reis Q2 2014 Mall Survey of rents and vacancy rates.

by Calculated Risk on 6/30/2014 10:30:00 AM

From the Dallas Fed: Texas Manufacturing Activity Picks Up Pace

Texas factory activity increased again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 11 to 15.5, indicating output grew at a faster pace than in May.

Other measures of current manufacturing activity also reflected growth in June. The new orders index rose from 3.8 to 6.5 but remained below the levels seen earlier in the year. The capacity utilization index held steady at 9.2. The shipments index came in at 10.3, similar to its May level, with nearly a third of manufacturers noting an increase in volumes.

Perceptions of broader business conditions were more optimistic this month. The general business activity index rose from 8 to 11.4. ...

Labor market indicators reflected stronger employment growth and longer workweeks. The June employment index rebounded to 13.1 after dipping to 2.9 in May.
emphasis added

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

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

All of the regional surveys showed expansion in June, and it seems likely the ISM index will be at about the same level as in May, or increase slightly in June.  The ISM index for June will be released tomorrow, Tuesday, July 1st.