by Calculated Risk on 4/15/2014 11:15:00 AM

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% (2.6% annualized rate) in March. The 16% trimmed-mean Consumer Price Index also increased 0.2% (2.4% 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% (2.4% annualized rate) in March. The CPI less food and energy increased 0.2% (2.5% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for March here.

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 2.1%, the trimmed-mean CPI rose 1.7%, and the CPI less food and energy rose 1.7%. Core PCE is for February and increased just 1.1% year-over-year.

On a monthly basis, median CPI was at 2.6% annualized, trimmed-mean CPI was at 2.4% annualized, and core CPI increased 2.5% annualized.

These measures suggest inflation remains below the Fed's target.

by Calculated Risk on 4/15/2014 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 47 in April, up from 46 in March. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Holds Steady in April

Builder confidence in the market for newly built, single-family homes rose one point to 47 in April from a downwardly revised March reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.
...
“Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable,” said NAHB Chief Economist David Crowe. “While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32. The component measuring expectations for future sales rose four points to 57.

The HMI three-month moving average was down in all four regions. The West fell nine points to 51 and the Midwest posted a four-point decline to 49 while the Northeast and South each dropped two points to 33 and 47, respectively.
emphasis added

Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was the third  consecutive reading below 50.

by Calculated Risk on 4/15/2014 08:36:00 AM

Note: The BLS reported:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.5 percent before seasonal adjustment.
...
The index for all items less food and energy also rose 0.2 percent in March.

I'll have more on inflation later.

From the NY Fed: Empire State Manufacturing Survey

The April 2014 Empire State Manufacturing Survey indicates that business activity was flat for New York manufacturers. The headline general business conditions index slipped four points to 1.3. The new orders index fell below zero to -2.8, pointing to a slight decline in orders, and the shipments index was little changed at 3.2. ...

Employment indexes suggested modest improvement in labor market conditions. The index for number of employees inched up to 8.2, indicating a small increase in employment levels, and the average workweek index fell three points to 2.0, pointing to a slight increase in hours worked.

Indexes for the six-month outlook continued to convey a fair amount of optimism about future business conditions. The index for expected general business conditions advanced five points to 38.2. The index for future new orders fell for a second consecutive month, though it remained at a fairly high level of 32.7.
emphasis added

This is the first of the regional surveys for April.  The general business conditions index was below the consensus forecast of a reading of 7.5, and indicates slower expansion in April than in March.

by Calculated Risk on 4/14/2014 09:05:00 PM

The retail sales report released this morning was solid, but some of the strength was probably some bounce-back from the severe winter weather. Still the economy will probably be stronger in 2014 than in 2013.

From the LA Times: Surging retail sales signal an economy on the upswing

"We are inclined to view March strength as part of a normalization from a very weak winter, particularly December and January," Credit Suisse analysts wrote in a note to clients Monday.
...
"It's a bit early to put too much weight on the retail sales number," [Standard & Poor's analyst Diya Iyer] said. "We're hearing from a lot of companies that same-store sales aren't great."
...
Economists had also braced for retail sales to take more of a hit from a calendar shift that pushed Easter into April this year after helping to pad sales in March 2013.

Tuesday:
• At 8:30 AM ET, the Consumer Price Index for March. The consensus is for a 0.1% increase in CPI in February and for core CPI to increase 0.1%.

• Also at 8:30 AM, the NY Fed Empire State Manufacturing Survey for April. The consensus is for a reading of 7.5, up from 5.6 in March (above zero is expansion).

• At 8:45 AM, Speech by Fed Chair Janet Yellen, Opening Remarks, At the Federal Reserve Bank of Atlanta Conference: 2014 Financial Markets Conference, Stone Mountain, Georgia.

• At 10:00 AM, the April NAHB homebuilder survey. The consensus is for a reading of 50, up from 47 in March. Any number above 50 indicates that more builders view sales conditions as good than poor.

by Calculated Risk on 4/14/2014 05:42:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (conventional, REOs, and short sales).  For a long time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market, although some of this is due to investor buying.  Other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In March 2014, 16.3% of all resales (single family homes) were distressed sales. This was down from 19.1% last month, and down from 37.5% in March 2013.

The percentage of REOs was at 7.8%, and the percentage of short sales was 8.5%.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales over the last 2 years (blue). 

Active Listing Inventory for single family homes increased 71.2% year-over-year in February. 

Cash buyers accounted for 22.5% of all sales, down from 36.4% in March 2013, and down from 26.5% last month (frequently investors).  This has been trending down, and it appears investors are becoming less of a factor in Sacramento.

Total sales were down 12.4% from March 2013, but conventional sales were up 16.4% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

As I've noted before, we are seeing a similar pattern in other distressed areas.