by Calculated Risk on 2/26/2015 02:58:00 PM

The automakers will report February vehicle sales on Tuesday, March 3rd. Sales in January were at 16.6 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in February will be about the same, and will probably be the best February since 2002.

Note:  There were 24 selling days in February, the same as last year.  Here are a couple of forecasts:

From J.D. Power: New-Vehicle Retail Sales in February Expected to Cross the Million Mark

New-vehicle retail sales in February 2015 are projected to reach 1,033,100 units, which is a 9 percent increase compared with February 2014 and the highest retail sales volume for the month as well as the first time that February retail sales are expected to exceed 1 million units since February 2002, when sales hit 1.1 million. ...

Total new light-vehicle sales in February 2015 are expected to reach 1.3 million units, a 9 percent increase, compared with February 2014, and match the recent high for the month set in February 2002. [16.7 million SAAR] Fleet volume in February is projected to hit 264,000 units, accounting for 20 percent of total sales.

New-vehicle sales in early 2015 are continuing the robust pattern from the fourth quarter of 2014. As a result, LMC Automotive is increasing its 2015 forecast for both retail and total light vehicles by approximately 40,000 units, each still rounding to 14.0 million and 17.0 million, respectively.

"Strength at the start of 2015 is a key factor in keeping the industry on target to surpass annual vehicle sales of 17 million units for the first time since 2001," said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

And from TrueCar: TrueCar forecasts sustained U.S. auto sales expansion in February with 8.5% volume increase

TrueCar, Inc. ... projects the pace of February auto sales expanded to a seasonally adjusted annualized rate (SAAR) of 16.7 million new units on continued strong consumer demand.

New light vehicle sales, including fleet, should reach 1,295,600 units for the month, up 8.5 percent over a year ago. This same increase is expected on a daily selling rate (DSR) basis with 24 selling days this February versus a year ago.

"Strong February auto sales signal a very healthy U.S. economy," said Eric Lyman, vice president of industry insights for TrueCar. "Given this month's robust demand, the industry remains on track to hit TrueCar's 17 million-unit projection for the 2015."

Another strong month for auto sales.

by Calculated Risk on 2/26/2015 12:18:00 PM

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% (1.9% annualized rate) in January. The 16% trimmed-mean Consumer Price Index rose 0.1% (1.3% 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 fell 0.7% (−7.8% annualized rate) in January. The CPI less food and energy rose 0.2% (2.2% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for January here. Motor fuel declined at a 92% annualized rate in January, following a 69% annualized rate decline in December, a 55% annualized rate decline in November, and a 31% annualized rate decline in October.  However motor fuel will add to inflation in February.

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 2.2%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy rose 1.6%. Core PCE is for December and increased 1.3% year-over-year.

On a monthly basis, median CPI was at 1.9% annualized, trimmed-mean CPI was at 1.3% annualized, and core CPI was at 2.2% annualized.

On a year-over-year basis these measures suggest inflation remains below the Fed's target of 2% (median CPI is slightly above 2%).

The key question for the Fed is if these key measures will move back towards 2%.

by Calculated Risk on 2/26/2015 11:36:00 AM

From the Kansas City Fed: Tenth District Manufacturing Activity Rose Just Slightly

The Federal Reserve Bank of Kansas City released the February 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 rose just slightly from the previous month, but producers expected activity to pick up moderately in the months ahead.

“We saw a further slowing in growth this month, driven in part by weaker factory activity in our energy states”, said Wilkerson. “The raw materials prices index also fell for the first time in over five years.”

The month-over-month composite index was 1 in February, down from 3 in January and 8 in December. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to large declines in primary metals and computer and electronics production. Looking across District states, the weakest activity was in Colorado, Oklahoma, and New Mexico. In contrast, production activity in the fabricated metals and machinery industries both increased moderately. ... the new orders index inched lower from 5 to 3, and the employment index fell for the second straight month.
emphasis added

We are seeing some impact from lower oil prices - however, overall, lower prices is a positive for the economy.

by Calculated Risk on 2/26/2015 08:30:00 AM

The DOL reported:

In the week ending February 21, the advance figure for seasonally adjusted initial claims was 313,000, an increase of 31,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 283,000 to 282,000. The 4-week moving average was 294,500, an increase of 11,500 from the previous week's revised average. The previous week's average was revised down by 250 from 283,250 to 283,000.

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

The previous week was revised down to 282,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.

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 increased to 294,500.

This was above the consensus forecast of 290,000, and the low level of the 4-week average suggests few layoffs.

by Calculated Risk on 2/25/2015 08:45:00 PM

First, from the ATA: ATA Truck Tonnage Index Jumped 1.2% in January

American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index increased 1.2% in January, following a revised gain of 0.1% during the previous month. In January, the index equaled 135.7 (2000=100), an all-time high.

Compared with January 2014, the SA index increased 6.6%, which was the largest year-over-year gain in over a year.
...
ATA recently revised the seasonally adjusted index back five years as part of its annual revision. For all of 2014, tonnage was up 3.7%, slightly better than the 3.4% originally reported. In 2013, the index increased 5.5%.

“Truck tonnage continued to improve in January, marking the fourth straight gain totaling 3.5%,” said ATA Chief Economist Bob Costello. “Last year was slightly better for truck tonnage than we originally thought and I am expecting that momentum to continue in 2015.”
emphasis added

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 290 thousand from 283 thousand.

• Also at 8:30 AM, the Consumer Price Index for January. The consensus is for a 0.6% decrease in CPI, and for core CPI to increase 0.1%.

• Also at 8:30 AM: Durable Goods Orders for January from the Census Bureau. The consensus is for a 1.7% increase in durable goods orders.

• At 9:00 AM, FHFA House Price Index for December 2014. This was originally a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.5% increase.

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