by Calculated Risk on 9/26/2014 08:36:00 AM

From the BEA: Gross Domestic Product: Second Quarter 2014 (Third Estimate)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.6 percent in the second quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 4.2 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in exports were larger than previously estimated ...

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Real GDP increased 4.6 percent in the second quarter, after decreasing 2.1 percent in the first. This upturn in the percent change in real GDP primarily reflected upturns in exports and in private inventory investment, accelerations in nonresidential fixed investment and in PCE, and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration in imports.

Here is a Comparison of Third and Second Estimates.

by Calculated Risk on 9/25/2014 08:55:00 PM

From Merrill Lynch:

We look for 2Q GDP growth to be revised up yet again, likely by another 0.6pp bringing GDP growth to 4.8% qoq saar. Revisions to construction data suggest greater investment in nonresidential structures and slightly more residential construction. We also expect the trade data to be adjusted to show a narrower deficit. Inventories should also be revised lower, perhaps adding 1.3pp to growth versus the prior estimate of 1.7pp. Spending on consumer services will also likely be revised, but there is uncertainty on the magnitude.

Friday:
• At 8:30 AM ET, Gross Domestic Product, 2nd quarter 2014 (third estimate). The consensus is that real GDP increased 4.6% annualized in Q2, up from 4.2% in the second estimate.

• At 9:55 AM, Reuter's/University of Michigan's Consumer sentiment index (final for September). The consensus is for a reading of 84.6, unchanged from the preliminary reading of 84.6, and up from the August reading of 82.5.

by Calculated Risk on 9/25/2014 05:52:00 PM

From housing economist Tom Lawler:

ACS: Sharp Slowdown in Household Growth in 2013 Mainly Attributable to Fewer Folks Living Alone, Big Increases in “Doubling (and more) Up”

As I noted last week, ACS for 2013 suggested that there was a sharp slowdown in the growth of the number of households in 2013.

That sharp slowdown was not because of slower population growth, but instead was attributable to a significant jump in the average household size – though that in and of itself is not insightful, since if the growth rate in households is below the growth rate in the household population, ...

While I hope to send out a write up tomorrow, the table below I believe provides some significant insights into the jump in average household size/slowdown in household growth.

 The table compares changes in household populations and households for various households/relationships from 2012 to 2013 with annual average changes from 2010 to 2012. Certain really significant differences are in bold type.

Households and Household Populations by Various Types, ACS
				Annual Change
	2013	2012	2010	2012-2013	2010-2012 (Average)
Population in Households	308,099,169	305,885,362	301,362,366	2,213,807	2,261,498
Households	116,291,033	115,969,540	114,567,419	321,493	701,061
Average Household Size	2.649	2.638	2.630	0.012	0.004
Population in Family Households	256,991,641	255,379,222	252,364,729	1,612,419	1,507,247
Family Households	76,680,463	76,509,262	76,089,045	171,201	210,109
One-Person Households	32,242,369	32,256,217	31,403,342	-13,848	426,438
Population in 2+ Non-Family Households	18,865,159	18,249,923	17,594,295	615,236	327,814
2+ Non-Family Households	7,368,201	7,204,061	7,075,032	164,140	64,515
Population in Family Households	256,991,641	255,379,222	252,364,729	1,612,419	1,507,247
Householder, Spouse, Child	226,742,233	226,165,010	223,905,638	577,223	1,129,686
Other Relative (including In-Laws)	22,938,742	22,275,332	21,610,953	663,410	332,190
Nonrelatives	7,310,666	6,938,880	6,848,138	371,786	45,371
Population in 2+ Non-Family Households	18,865,159	18,249,923	615,236	615,236	8,817,344
Householder	7,368,201	7,204,061	7,075,032	164,140	64,515
Unmarried Partner	3,952,380	3,909,449	3,809,564	42,931	49,943
Other	11,447,016	11,045,862	10,519,263	401,154	263,300
Average Household Size, 2+ Non-Family Household	2.560	2.533	2.487	0.027	0.023
Roomer or boarder	1,694,477	1,567,268	1,595,106	127,209	-13,919
In Family Household	673,210	612,741	671,299	60,469	-29,279
In Non-Family Household	1,021,267	954,527	923,807	66,740	15,360
Housemate or Roommate	5,978,352	5,793,412	5,587,176	184,940	103,118
In Family Household	1,206,366	1,189,913	1,180,670	16,453	4,622
In Non-Family Household	4,771,986	4,603,499	4,406,506	168,487	98,497
Other non-partner/non-foster child Non-relative	3,813,499	3,435,254	3,129,423	378,245	152,916
In Family Household	2,097,727	1,895,833	1,796,638	201,894	49,598
In Non-Family Household	1,715,772	1,539,421	1,332,785	176,351	103,318

by Calculated Risk on 9/25/2014 02:29:00 PM

The automakers will report September vehicle sales on Wednesday, Oct 1st. Sales in August were at 17.45 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in September will be solidly above 16 million SAAR again.

Note:  There were 24 selling days in September this year compared to 23 last year.

Here are a few forecasts:

From J.D. Power: Summer Sizzle Continues as New-Vehicle Sales in August Forecast to Hit Highest Levels of the Year

New-vehicle retail sales in September 2014 are projected to come in at 1.0 million units, a 94,000-unit increase from September 2013 and 6 percent growth on a selling-day adjusted basis (September 2014 has 24 selling days, compared with 23 in September 2013). The retail seasonally adjusted annualized rate (SAAR) in September is expected to be 13.5 million units—which is 1.2 million units more than in September 2013—marking the seventh consecutive month in which the SAAR has exceeded 13 million units. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

The strong sales pace in September is noteworthy as it follows an exceptionally strong August when retail sales reached 1,378,588.

“Vehicle sales typically fall sharply immediately following the Labor Day holiday before recovering later in the month, but the decline this September has been smaller than in prior years,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power. “While the strong sales pace is an indicator of the health of the industry, it is being complemented by record transaction prices for the month of September.” [Total forecast 16.5 million SAAR]

From Kelley Blue Book: New-Vehicle Sales To Climb 9 Percent In September; Kelley Blue Book Adjusts 2014 Forecast To 16.4 Million

New-vehicle sales are expected to increase 9.1 percent year-over-year to a total of 1.24 million units, resulting in an estimated 16.4 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book ... "Following an extraordinarily strong month of sales in August, with the industry above 17 million SAAR for the first time in eight years, Kelley Blue Book expects sales to level out in September," said Alec Gutierrez, senior analyst for Kelley Blue Book. "Sales will remain strong and show healthy year-over-year improvement. Rising incentive spend in recent months has been more than offset by increasing retail transaction prices, signaling continued consumer demand."

From TrueCar: TrueCar Forecasts Continued Strong New Vehicle Sales Growth in September; Up 9.7% Compared to Last Year

Seasonally Adjusted Annualized Rate ("SAAR") of 16.4 million new vehicle sales.

TrueCar's 2014 Annual Sales Forecast remains at 16.4 million vehicles as well.

Another solid month for auto sales, and this should be the best year since 2006.

by Calculated Risk on 9/25/2014 11:10:00 AM

From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Edged Higher

The Federal Reserve Bank of Kansas City released the September Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity edged higher, and producers’ expectations for future activity maintained their recent solid levels.

“We saw slightly faster growth this month after a sizable easing in August,” Wilkerson said. “This is despite continued sluggish activity in our important food processing segment, driven in part by higher beef costs this year.”

The month-over-month composite index was 6 in September, slightly higher than 3 in August but lower than 9 in July. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. ... The production index increased from 4 to 12, and the shipment index also grew from a reading of 2 in August to 14. The employment index increased significantly from -4 in the last survey period to 7 in September.
emphasis added

The last regional Fed manufacturing survey for September will be released on Monday, Sept 29th (the Dallas Fed). All of the regional surveys so far have indicated solid growth in September (three out of four higher than in August), and this suggests another strong reading for the ISM manufacturing survey.