by Calculated Risk on 9/01/2015 08:03:00 PM

Auto sales and construction spending were solid, although manufacturing was weak. However the weakness in manufacturing is mostly due to lower oil prices and the strong dollar, so overall the US data has been fairly solid.

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

• At 8:15 AM, the ADP Employment Report for August. This report is for private payrolls only (no government). The consensus is for 210,000 payroll jobs added in August, up from 185,000 in July.

• At 10:00 AM, Manufacturers' Shipments, Inventories and Orders (Factory Orders) for July. The consensus is a 0.9% increase in orders.

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

by Calculated Risk on 9/01/2015 02:31:00 PM

Based on a WardsAuto estimate, light vehicle sales were at a 17.72 million SAAR in August. That is up 2.9% from August 2014, and up 1.3% from the 17.5 million annual sales rate last month.


Click on graph for larger image.

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for July (red, light vehicle sales of 17.7 million SAAR from WardsAuto).

This was above to the consensus forecast of 17.3 million SAAR (seasonally adjusted annual rate).

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate.

This was another very strong month for auto sales - even with Labor Day falling in the September sales month this year (it was included in August last year).

It appears 2015 will be the best year for light vehicle sales since 2001.

by Calculated Risk on 9/01/2015 12:25:00 PM

Notes: This CoreLogic House Price Index report is for July. The recent Case-Shiller index release was for June. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic Reports Home Prices Rose by 6.9 Percent Year Over Year in July

Home prices, including distressed sales, increased 6.9 percent in July 2015 compared to July 2014. June marks the 41st consecutive month of year-over-year home price gains.

Excluding distressed sales, home prices increased by 6.7 percent year over year in July.

On a month-over-month basis, home prices increased by 1.7 percent in July compared to June data. Excluding distressed sales, home prices were up 1.5 percent month over month in July 2015.

Home prices nationwide remain 6.6 percent below their peak, which was set in April 2006.
emphasis added

Click on graph for larger image.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was up 1.7% in July (NSA), and is up 6.9% over the last year.

This index is not seasonally adjusted, and this was a solid month-to-month increase.


The second graph is from CoreLogic. The year-over-year comparison has been positive for forty one consecutive months.

The YoY increase had been moving sideways over most of the last year, but has picked up recently.

by Calculated Risk on 9/01/2015 11:03:00 AM

The Census Bureau reported that overall construction spending increased in July:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during July 2015 was estimated at a seasonally adjusted annual rate of $1,083.4 billion, 0.7 percent above the revised June estimate of $1,075.9 billion. The July figure is 13.7 percent above the July 2014 estimate of $952.5 billion

Private spending increased and public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $787.8 billion, 1.3 percent above the revised June estimate of $777.4 billion. ...

In July, the estimated seasonally adjusted annual rate of public construction spending was $295.6 billion, 1.0 percent below the revised June estimate of $298.5 billion.
emphasis added

Note: Non-residential for offices and hotels is generally increasing, but spending for oil and gas has been declining. Early in the recovery, there was a surge in non-residential spending for oil and gas (because oil prices increased), but now, with falling prices, oil and gas is a drag on overall construction spending.

As an example, construction spending for private lodging is up 41% year-over-year, whereas spending for power (includes oil and gas) construction peaked in mid-2014 and is down 13% year-over-year.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending has been increasing recently, and is 44% below the bubble peak.

Non-residential spending is only 2% below the peak in January 2008 (nominal dollars).

Public construction spending is now 9% below the peak in March 2009 and about 12% above the post-recession low.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 16%. Non-residential spending is up 18% year-over-year. Public spending is up 6% year-over-year.

Looking forward, all categories of construction spending should increase in 2015. Residential spending is still very low, non-residential is increasing (except oil and gas), and public spending has also increasing after several years of austerity.

This was close to the consensus forecast of a 0.8% increase, and spending for May and June was revised up.  Overall, another solid construction report.

by Calculated Risk on 9/01/2015 10:03:00 AM

The ISM manufacturing index suggested expansion in August. The PMI was at 51.1% in August, down from 52.7% in July. The employment index was at 51.2%, down from 52.7% in July, and the new orders index was at 51.6%, down from 56.5%.

From the Institute for Supply Management: August 2015 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector expanded in August for the 32nd consecutive month, and the overall economy grew for the 75th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The August PMI® registered 51.1 percent, a decrease of 1.6 percentage points from the July reading of 52.7 percent. The New Orders Index registered 51.7 percent, a decrease of 4.8 percentage points from the reading of 56.5 percent in July. The Production Index registered 53.6 percent, 2.4 percentage points below the July reading of 56 percent. The Employment Index registered 51.2 percent, 1.5 percentage points below the July reading of 52.7 percent. Inventories of raw materials registered 48.5 percent, a decrease of 1 percentage point from the July reading of 49.5 percent. The Prices Index registered 39 percent, down 5 percentage points from the July reading of 44 percent, indicating lower raw materials prices for the 10th consecutive month. The New Export Orders Index registered 46.5 percent, down 1.5 percentage points from the July reading of 48 percent. Comments from the panel reflect a mix of modest to strong growth depending upon the specific industry, the positive impact of lower raw materials prices, but also a continuing concern over export growth."
emphasis added

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was below expectations of 52.8%, and indicates slower manufacturing expansion in August.