by Calculated Risk on 1/15/2015 10:10:00 AM

From the Philly Fed: January Manufacturing Survey

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased 18 points, from a revised reading of 24.3 in December to 6.3 this month.
...
The current employment index fell 10 points, from 8.4 to -2.0. ...

The diffusion index for future activity edged up by less than 1 point, to 50.9, in January and has remained near its current level over the past five months ...
emphasis added

This was below the consensus forecast of a reading of 18.8 for January.

Earlier today from the NY Fed: Empire State Manufacturing Survey

The headline general business conditions index climbed eleven points to 10.0.
...
Labor market conditions were mixed, with the index for number of employees rising several points to 13.7, while the average workweek index remained negative at -8.4.
...
Indexes assessing the six-month outlook conveyed considerable optimism about future business activity. The index for future general business conditions rose nine points to 48.4, with nearly 60 percent of respondents expecting conditions to improve.

The NY Fed survey was above the consensus forecast of 5.0

Click on graph for larger image.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The yellow line is an average of the NY Fed (Empire State) and Philly Fed surveys through January. The ISM and total Fed surveys are through December.

The average of the Empire State and Philly Fed surveys declined in January, but this still suggests a decent ISM report for January.

by Calculated Risk on 1/15/2015 08:35:00 AM

The DOL reported:

In the week ending January 10, the advance figure for seasonally adjusted initial claims was 316,000, an increase of 19,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 294,000 to 297,000. The 4-week moving average was 298,000, an increase of 6,750 from the previous week's revised average. The previous week's average was revised up by 750 from 290,500 to 291,250.

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

The previous week was revised yp to 297,000.

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 298,000.

This was higher than the consensus forecast of 295,000, and the level suggests few layoffs.  Note: We might start seeing an increase in unemployment claims due to layoffs in oil producing states.

by Calculated Risk on 1/14/2015 07:41:00 PM

On mortgage rates from Matthew Graham at Mortgage News Daily: Mortgage Rates Back to 3.5% for Some

If you have a truly ideal credit profile and loan scenario, a few of the more aggressive lenders are quoting conforming, 30yr fixed mortgage rates at 3.5% today. Almost all other lenders are only an eighth of a point higher at 3.625% for top tier scenarios. This is a rate landscape that hasn't been seen since early May 2013. There's still quite a bit of ground to cover between here and the 3.125%-3.25% rates seen at the end of September 2012, but for all intents and purposes, 3.5%-3.625% was the upper end of the refi boom golden age from mid 2012 to mid 2013.

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 295 thousand from 294 thousand.

• Also at 8:30 AM, the Producer Price Index for December from the BLS. The consensus is for a 0.4% decrease in prices, and a 0.1% increase in core PPI.

• Also at 8:30 AM, the NY Fed Empire State Manufacturing Survey for January. The consensus is for a reading of 5.0, up from -3.6 last month (above zero is expansion).

• At 10:00 AM, the Philly Fed manufacturing survey for January. The consensus is for a reading of 18.8, down from 24.3 last month (above zero indicates expansion).

by Calculated Risk on 1/14/2015 04:13:00 PM

From DataQuick: Southern California Home Sales and Median Sale Price Rise

The number of homes sold increased sharply from the month of November and rose modestly from the same time a year earlier, marking one of just two months in 2014 to post a year-over-year gain in sales. ... A total of 19,205 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December 2014. That was up month over month 22.8 percent from 15,643 sales in November 2014, and up year over year 4.3 percent from 18,415 sales in December 2013, according to CoreLogic DataQuick data.

"One month doesn’t make a trend, but December’s uptick in home sales might indicate renewed interest in housing thanks to lower mortgage rates and job growth in recent months,” said Andrew LePage, data analyst for CoreLogic DataQuick. “The gain came despite a continued decline in the share of homes sold to investors and cash buyers. If demand continues to build we'll need more supply to keep up with it. One of the big questions hanging over the housing market is whether higher demand and home values will lead to a lot more people listing their homes for sale, as well as more new-home construction, which remains well below average.”
...
Foreclosure resales represented 5.0 percent of the resale market in December. That was down from a revised 5.5 percent in November 2014 and down from 5.8 percent in December 2013. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009. Foreclosure resales are purchased homes that have been previously foreclosed upon in the prior 12 months.

Short sales made up an estimated 6.2 percent of resales in December, down from a revised 6.4 in November 2014 and down from 10.2 percent in December 2013. Short sales are transactions in which the sale price fell short of what was owed on the property.
emphasis added

Based on early reports from different areas, it looks like home sales picked up in December.

by Calculated Risk on 1/14/2015 02:05:00 PM

Fed's Beige Book "Prepared at the Federal Reserve Bank of San Francisco and based on information collected on or before January 5, 2015. "

Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand during the reporting period of mid-November through late December, with most Districts reporting a "modest" or "moderate" pace of growth. In contrast, the Kansas City District reported only slight growth in December. However, most of their contacts, along with those of several other Districts, expect somewhat faster growth over the coming months. ...

And on real estate:

Single-family residential real estate sales and construction were largely flat on balance across the Districts. Sales declined somewhat on a year-over-year basis in the Boston, Cleveland, Atlanta, Chicago, Minneapolis, Kansas City, and Dallas Districts. In the Philadelphia District, year-over-year existing home sales finished lower in November, but pending December sales in some areas were up notably over December 2013. However, builders of new homes in the Philadelphia District reported weak traffic for prospective buyers and fewer contract signings. San Francisco reported that overall home sales picked up in December. Richmond reported a modest increase in housing market activity. Home prices increased modestly, on balance, in the Boston, Philadelphia, Cleveland, Atlanta, Chicago, and Dallas Districts. The Cleveland, Atlanta, Chicago, Minneapolis, and Kansas City Districts all reported slightly slower single-family residential construction activity. However, the pace of single-family home construction increased in some areas of the San Francisco District.

Commercial real estate activity expanded in most Districts. The Philadelphia District reported a modest pace of growth for commercial real estate leasing activity, and Boston reported improving conditions in commercial real estate markets overall. Commercial real estate activity in the Chicago and Kansas City Districts expanded at a moderate pace. The Dallas District noted that office leasing activity remained strong, but one contact noted a slight pullback in demand from oil and gas firms. Demand for apartments in the Dallas District also remained strong. New York City's co-op and condo market showed continued strength in the final quarter of 2014; apartment sales volume was down from the exceptionally high levels of the prior year but still fairly brisk, while selling prices were up moderately. Commercial construction activity increased in most Districts. Activity grew modestly in the Philadelphia District and a bit faster in the Atlanta and Chicago Districts. Atlanta cited the multifamily residential segment as a source of growth, while Chicago credited demand for industrial and office buildings. Commercial builders in the Cleveland District reported a moderate to robust increase for projects in the pipeline. Dallas reported that overall commercial construction was strong. San Francisco reported that multifamily residential construction was strong in many areas of that District and that retail, office, industrial, or infrastructure projects were widespread across that District.
emphasis added

Residential real estate was "flat", however commercial was picking up.