by Calculated Risk on 6/25/2015 11:00:00 AM

From the Kansas City Fed: Tenth District Manufacturing Activity Declined at a Slower Pace

The Federal Reserve Bank of Kansas City released the June Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity declined at a slightly slower pace, and producers’ expectations improved modestly.

“Regional factory conditions continued to decline in June, especially in energy-producing areas,” said Wilkerson. “However, firms continue to expect some stabilization in the months ahead and for orders to rise by the end of the year.”
...
Tenth District manufacturing activity declined at a slightly slower pace than the previous month, and producers’ expectations improved modestly. Most price indexes continued to rise, particularly for raw materials.

The month-over-month composite index was -9 in June, up from -13 in May but down from -7 in April ... On the other hand, although still negative, the new orders, order backlog, employment, and new orders for export indexes edged higher.
emphasis added

Some of this recent decline in the Kansas City region has been due to lower oil prices.

by Calculated Risk on 6/25/2015 08:46:00 AM

The BEA released the Personal Income and Outlays report for May:

Personal income increased $79.0 billion, or 0.5 percent ... in May, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $105.9 billion, or 0.9 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.6 percent in May, compared with an increase of less than 0.1 percent in April. ... The price index for PCE increased 0.3 percent in May, compared with an increase of less than 0.1 percent in April. The PCE price index, excluding food and energy, increased 0.1 percent in May, the same increase as in April.

The May price index for PCE increased 0.2 percent from May a year ago. The May PCE price index, excluding food and energy, increased 1.2 percent from May a year ago.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2015 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was higher than expected.  And the increase in PCE was above the 0.7% increase consensus.  A strong report.

On inflation: The PCE price index increased 0.2 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.2 percent year-over-year in May.

Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 3.1% annual rate in Q2 2015 (using the mid-month method, PCE was increasing 4.2%). This suggests a rebound in PCE in Q2, and decent Q2 GDP growth.

by Calculated Risk on 6/25/2015 08:33:00 AM

The DOL reported:

In the week ending June 20, the advance figure for seasonally adjusted initial claims was 271,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 267,000 to 268,000. The 4-week moving average was 273,750, a decrease of 3,250 from the previous week's revised average. The previous week's average was revised up by 250 from 276,750 to 277,000.

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

The previous week was revised up by 1,000.

The following graph shows the 4-week moving average of weekly claims since 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 273,750.

This was below the consensus forecast of 273,000, and the low level of the 4-week average suggests few layoffs.

by Calculated Risk on 6/24/2015 07:24:00 PM

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 273 thousand from 267 thousand.

• At 8:30 AM, Personal Income and Outlays for May. The consensus is for a 0.4% increase in personal income, and for a 0.7% increase in personal spending. And for the Core PCE price index to increase 0.1%.

• At 11:00 AM, the Kansas City Fed manufacturing survey for June.

Economist Tom Lawler sent me an undated table below of short sales, foreclosures and cash buyers for a few selected cities in May.

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 in foreclosures in Baltimore).

Short sales are down in all of these areas.

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.

As Lawler noted last month: The Baltimore Metro area is included in the overall Mid-Atlantic region (covered by MRIS). Baltimore is shown separately because a large portion of the YOY increase in the foreclosure share of home sales in the Mid-Atlantic region was attributable to the significant increase in foreclosure sales in the Baltimore Metro area.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	May-15	May-14	May-15	May-14	May-15	May-14	May-15	May-14
Las Vegas	7.3%	7.9%	8.0%	9.1%	15.3%	17.0%	21.9%	40.2%
Reno**	5.0%	11.0%	4.0%	6.0%	9.0%	17.0%
Phoenix	2.8%	3.9%	3.2%	6.7%	6.0%	10.7%	24.0%	29.5%
Sacramento	4.7%	7.0%	5.4%	8.3%	10.1%	15.3%	17.4%	20.5%
Minneapolis	2.4%	3.9%	6.6%	10.0%	9.0%	13.9%
Mid-Atlantic	3.4%	5.2%	10.4%	8.1%	13.8%	13.3%	16.2%	17.2%
Baltimore MSA****	3.6%	5.8%	16.3%	11.9%	19.8%	17.6%
Orlando	3.9%	9.2%	22.8%	24.7%	26.7%	34.0%	33.9%	43.8%
Florida SF	5.3%	9.6%	25.7%	24.6%	31.0%	34.2%	43.4%	48.9%
Florida C/TH	3.2%	7.6%	20.6%	19.7%	23.9%	27.3%	69.5%	72.1%
Miami MSA SF	6.2%	9.6%	16.1%	16.4%	22.3%	26.0%	34.9%	42.6%
Miami MSA C/TH	3.2%	5.9%	17.6%	17.9%	20.8%	23.7%	65.8%	70.1%
Tampa MSA SF	4.3%	7.1%	20.0%	22.1%	24.3%	29.2%	35.3%	40.6%
Tampa MSA C/TH	3.0%	4.9%	13.6%	18.6%	16.6%	23.5%	57.5%	62.7%
Northeast Florida					26.7%	36.8%
Chicago (city)					16.2%	21.6%
Hampton Roads					17.4%	21.3%
Spokane					12.8%	17.0%
Hampton Roads					17.4%	21.3%
Spokane					12.8%	17.0%
Richmond VA MSA			8.5%	13.9%			14.9%	19.4%
Memphis			14.3%	15.6%			28.3%	31.6%
Springfield IL**			5.4%	8.7%
Tucson							25.6%	31.3%
Toledo							26.1%	36.6%
Des Moines							14.0%	17.5%
Peoria							17.9%	19.6%
Georgia***							20.3%	26.0%
Omaha							15.9%	19.4%
Pensacola							31.3%	32.6%
Knoxville							20.5%	22.9%
*share of existing home sales, based on property records **Single Family Only ***GAMLS ****Baltimore is included in the Mid-Atlantic region, but is shown separately here

by Calculated Risk on 6/24/2015 04:08:00 PM

Here is an indicator that I follow on trucking, from the ATA: ATA Truck Tonnage Index Rose 1.1% in May

American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index increased 1.1% in May, following a revised loss of 1.4% during April. In May, the index equaled 132.1 (2000=100). The all-time high is 135.8, reached in January 2015.

Compared with May 2014, the SA index increased just 1.8%, which was well below the 2.7% gain in April and the smallest year-over-year gain since February 2013 (-4.3%). ...

“The good news is that truck tonnage increased in May,” said ATA Chief Economist Bob Costello. “But tonnage is certainly not strong at the moment as factory output is soft and there is an inventory reduction occurring throughout the supply chain.”

Costello noted that truck tonnage is off 2.7% from the high in January.

“I believe the inventory correction should end this summer and truck freight, helped by better personal consumption, will accelerate,” he said, “which is good because I think it is unlikely factory output will boost truck tonnage much until later this year or next year.”
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 only 1.8% year-over-year.