by Calculated Risk on 3/24/2015 08:01:00 PM

Wednesday:
• 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:30 AM, Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.5% increase in durable goods orders.

With lower gasoline prices, vehicle miles driven have reached a new high on a rolling 12 month basis.

The Department of Transportation (DOT) reported:

◦Travel on all roads and streets changed by 4.9% (11.1 billion vehicle miles) for January 2015 as compared with January 2014.

◦Travel for the month is estimated to be 237.4 billion vehicle miles.

◦The seasonally adjusted vehicle miles traveled for January 2015 is 257.9 billion miles, a 5.1% (12.5 billion vehicle miles) increase over January 2014. It also represents a -0.2% change (-0.5 billion vehicle miles) compared with December 2014.

The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

The rolling 12 month total is moving up, after moving sideways for several years.


Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Miles driven had been below the previous peak for 85 months - an all time record.

The second graph shows the year-over-year change from the same month in the previous year.

 In January 2015, gasoline averaged of $2.21 per gallon according to the EIA.  That was down significantly from January 2014 when prices averaged $3.39 per gallon.

However gasoline prices are just part of the story.  The lack of growth in miles driven over the last 7 years was probably also due to the lingering effects of the great recession (lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.

Now, miles driven - on a rolling 12 month basis - is at a new high.

by Calculated Risk on 3/24/2015 05:50:00 PM

Here is an indicator that I follow on trucking, from the ATA: ATA Truck Tonnage Index Fell 3.1% in February

American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 3.1% in February, following a revised gain of 1.3% during the previous month. In February, the index equaled 131.6 (2000=100), the lowest level since September 2014.

Compared with February 2014, the SA index increased 3%, although this was the smallest year-over-year gain since June of last year and below the 2014 annual increase of 3.7%. ...

“The February drop in truck tonnage was not a surprise,” said ATA Chief Economist Bob Costello. “Retail sales, manufacturing output and housing starts were all off during the month, so the tonnage decline fits with those indicators. The surprise would have been had tonnage increased with all of those sectors falling.”

Costello added that the winter weather that impacted a large portion of the country during February had a negative impact on truck tonnage as well as industries that drive tonnage, like retail, manufacturing and housing starts.

Trucking serves as a barometer of the U.S. economy, representing 69.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.7 billion tons of freight in 2013. Motor carriers collected $681.7 billion, or 81.2% of total revenue earned by all transport modes.
emphasis added

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index.

The index is now up 3.0% year-over-year.

by Calculated Risk on 3/24/2015 02:57:00 PM

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

On distressed: Total "distressed" share is down in most of these markets mostly due to a decline in short sales (Mid-Atlantic is up year-over-year because of an increase foreclosure as lenders work through the backlog).

Short sales are down in these areas.

Foreclosures are up in several areas, especially in Florida.

The All Cash Share (last two columns) is declining year-over-year. As investors pull back, the share of all cash buyers will probably continue to decline.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14
Las Vegas	9.3%	14.0%	9.7%	12.0%	19.0%	26.0%	37.4%	46.8%
Reno**	7.0%	13.0%	7.0%	7.0%	14.0%	20.0%
Phoenix	4.4%	5.3%	5.8%	8.3%	10.1%	13.7%	29.9%	35.4%
Sacramento	6.3%	12.4%	8.6%	7.0%	14.9%	19.4%	19.8%	26.5%
Minneapolis	2.7%	5.0%	15.3%	25.3%	18.1%	30.3%
Mid-Atlantic	5.3%	7.7%	15.1%	10.9%	20.4%	18.6%	21.2%	21.4%
Orlando	5.3%	9.4%	27.0%	23.8%	32.3%	33.2%	42.2%	48.2%
California *	6.2%	9.0%	6.8%	8.0%	13.0%	17.0%
Bay Area CA*	4.8%	6.3%	4.5%	5.0%	9.3%	11.3%	26.7%	28.4%
So. California*	6.1%	9.0%	6.1%	6.7%	12.2%	15.7%	28.0%	31.0%
Florida SF	4.9%	8.4%	24.0%	23.6%	28.9%	32.0%	42.4%	47.9%
Florida C/TH	2.9%	6.0%	18.8%	17.8%	21.7%	23.8%	69.4%	73.2%
Tampa MSA SF	5.2%	9.9%	26.6%	24.9%	31.8%	34.8%	43.2%	46.4%
Tampa MSA C/TH	2.4%	5.3%	19.0%	19.2%	21.5%	24.6%	65.4%	71.2%
Miami MSA SF	7.7%	13.8%	22.5%	16.4%	30.1%	30.1%	42.2%	48.7%
Miami MSA C/TH	3.6%	7.5%	23.5%	18.3%	27.1%	25.8%	71.9%	75.2%
Northeast Florida					37.6%	44.5%
Chicago (city)					29.9%	40.0%
Hampton Roads					22.6%	30.7%
Des Moines							21.3%	23.3%
Georgia***							27.1%	35.3%
Omaha							19.6%	25.6%
Pensacola							36.7%	41.8%
Knoxville							23.9%	27.4%
Richmond VA			13.9%	22.2%			21.5%	22.2%
Springfield IL**			15.3%	18.3%			21.4%	N/A
*share of existing home sales, based on property records **Single Family Only ***GAMLS

by Calculated Risk on 3/24/2015 12:01:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (3.0% annualized rate) in February. The 16% trimmed-mean Consumer Price Index rose 0.2% (2.0% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.2% (2.6% annualized rate) in February. The CPI less food and energy rose 0.2% (1.9% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for February here. Motor fuel added to inflation in February following several months of steep declines. However oil and gasoline prices declined again in March, and will pull down inflation again.

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.2%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy rose 1.7%. Core PCE is for January and increased 1.3% year-over-year.

On a monthly basis, median CPI was at 3.0% annualized, trimmed-mean CPI was at 2.0% annualized, and core CPI was at 1.9% annualized.

On a year-over-year basis these measures suggest inflation remains below the Fed's target of 2% (median CPI is slightly above 2%).

The key question for the Fed is if these key measures will move back towards 2%.

by Calculated Risk on 3/24/2015 11:03:00 AM

The new home sales report for February was above expectations at 539 thousand on a seasonally adjusted annual rate basis (SAAR).

Also, sales for January were revised up (sales for November and December was revised slightly).

Sales in 2015 are off to a solid start, although this is just two months of data.

Earlier: New Home Sales at 539,000 Annual Rate in February

The Census Bureau reported that new home sales this year, through February, were 81,000, Not seasonally adjusted (NSA). That is up 19% from 68,000 during the same period of 2014 (NSA). This is very early - and the next six months are usually the strongest of the year NSA - but this is a solid start.

Sales were up 24.8% year-over-year in February.

Click on graph for larger image.

This graph shows new home sales for 2014 and 2015 by month (Seasonally Adjusted Annual Rate).

The year-over-year gain will be strong in Q1 (the first half was especially weak in 2014), and I expect the year-over-year increases to slow later this year.

And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales.  Now I'm looking for the gap to close over the next few years.

The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through February 2015. This graph starts in 1994, but the relationship has been fairly steady back to the '60s.

Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales.

I expect existing home sales to move sideways (distressed sales will continue to decline and be partially offset by more conventional / equity sales).  And I expect this gap to slowly close, mostly from an increase in new home sales.

Another way to look at this is a ratio of existing to new home sales.

This ratio was fairly stable from 1994 through 2006, and then the flood of distressed sales kept the number of existing home sales elevated and depressed new home sales. (Note: This ratio was fairly stable back to the early '70s, but I only have annual data for the earlier years).

In general the ratio has been trending down, and this ratio will probably continue to trend down over the next several years.

Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.