by Calculated Risk on 10/01/2014 10:06:00 AM

The ISM manufacturing index suggests slower expansion in September than in August. The PMI was at 56.6% in September, down from 59.0% in August. The employment index was at 54.6%, down from 58.1% in August, and the new orders index was at 60.0%, down from 66.7%.

From the Institute for Supply Management: September 2014 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector expanded in September for the 16th consecutive month, and the overall economy grew for the 64th 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 September PMI® registered 56.6 percent, a decrease of 2.4 percentage points from August’s reading of 59 percent, indicating continued expansion in manufacturing. The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from the 66.7 percent reading in August, indicating growth in new orders for the 16th consecutive month. The Production Index registered 64.6 percent, 0.1 percentage point above the August reading of 64.5 percent. The Employment Index grew for the 15th consecutive month, registering 54.6 percent, a decrease of 3.5 percentage points below the August reading of 58.1 percent. Inventories of raw materials registered 51.5 percent, a decrease of 0.5 percentage point from the August reading of 52 percent, indicating growth in inventories for the second consecutive month. Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest."
emphasis added

Click on graph for larger image.

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

This was below expectations of 58.0%, but still shows decent expansion in September.

by Calculated Risk on 10/01/2014 08:18:00 AM

From ADP:

Private sector employment increased by 213,000 jobs from August to September according to the August ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
...
Mark Zandi, chief economist of Moody’s Analytics, said, "Job gains remain strong and steady. The pace of job growth has been remarkably similar for the past several years. Especially encouraging most recently is the increasingly broad base nature of those gains. Nearly all industries and companies of all sizes are adding consistently to payrolls.”

This was slightly above the consensus forecast for 200,000 private sector jobs added in the ADP report. 

The BLS report for September will be released on Friday.

by Calculated Risk on 10/01/2014 07:00:00 AM

From the MBA: Mortgage Applications Decrease Slightly in Latest MBA Weekly Survey

Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 26, 2014. ...

The Refinance Index decreased 0.3 percent from the previous week. The seasonally adjusted Purchase Index remained unchanged from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 11 percent lower than the same week one year ago. ...
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.33 percent from 4.39 percent, with points decreasing to 0.31 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index.

The refinance index is down 76% from the levels in May 2013.

Refinance activity is very low this year and will be the lowest since year 2000.


The second graph shows the MBA mortgage purchase index.  

According to the MBA, the unadjusted purchase index is down about 11% from a year ago.

by Calculated Risk on 9/30/2014 08:01:00 PM

Wednesday will be busy! First, from the National Restaurant Association: Restaurant Performance Index Registers August Gain

Driven by stronger same-store sales and customer traffic levels and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) posted a solid gain in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.9 in August, up 1.0 percent from July and its first gain in three months. In addition, the RPI stood above 100 for the 18th consecutive month, which signifies expansion in the index of key industry indicators.

“The August gain in the RPI was fueled by stronger same-store sales and customer traffic results, aided by continued improving economic conditions,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Looking forward, restaurant operators remain generally optimistic about continued sales growth, while a majority plans to make a capital expenditure in the next six months. However, operators still report food costs and government among top challenges that continue to negatively affect the operating environment.”
emphasis added

Click on graph for larger image.

The index increased to 101.9 in August, up from 101.0 in July. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.  This is a solid reading.

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

• All day, Light vehicle sales for September. The consensus is for light vehicle sales to decrease to 16.8 million SAAR in September from 17.4 million in August (Seasonally Adjusted Annual Rate).

• 8:15 AM, the ADP Employment Report for September. This report is for private payrolls only (no government). The consensus is for 200,000 payroll jobs added in September, down from 205,000 in August.

• Early, Reis Q3 2014 Office Survey of rents and vacancy rates.

• At 10:00 AM, the ISM Manufacturing Index for September. The consensus is for a decrease to 58.0 from 59.0 in August. The ISM manufacturing index indicated expansion in August at 59.0%. The employment index was at 58.1%, and the new orders index was at 66.7%.

• At 10:00 AM, Construction Spending for August. The consensus is for a 0.5% increase in construction spending.

by Calculated Risk on 9/30/2014 04:11:00 PM

Fannie Mae reported today that the Single-Family Serious Delinquency rate declined slightly in August to 1.99% from 2.00% in July. The serious delinquency rate is down from 2.61% in August 2013, and this is the lowest level since October 2008.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Freddie Mac has not reported for August yet.

Note: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

The Fannie Mae serious delinquency rate has fallen 0.62 percentage points over the last year, and at that pace the serious delinquency rate will be under 1% in 2016 - although the rate of decline has slowed recently.

Note: The "normal" serious delinquency rate is under 1%.

Maybe serious delinquencies will be close to normal in 2016.