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Tuesday, March 24, 2015

BLS: CPI increased 0.2% in February, Core CPI increased 0.2%

by Calculated Risk on 3/24/2015 08:31:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index was unchanged before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad-based, with increases in shelter, energy, and food indexes all contributing. The energy index rose after a long series of declines, increasing 1.0 percent as the gasoline index turned up after falling in recent months. The food index, unchanged last month, also rose in February, though major grocery store food group indexes were mixed.

The index for all items less food and energy rose 0.2 percent in February, the same increase as in January.
emphasis added
I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was at the consensus forecast of a 0.2% increase for CPI, and above the forecast of a 0.1% increase in core CPI.

Monday, March 23, 2015

Tuesday: New Home Sales, CPI, Richmond Fed Mfg

by Calculated Risk on 3/23/2015 07:54:00 PM

With oil and gasoline prices up a little in February compared to January, CPI will probably show a positive monthly change for the first time since October. The CPI might still be down year-over-year - or close to unchanged.

As an example, WTI oil averaged $47.22 per barrel in January and increased to $50.58 in February. However oil and gasoline prices have declined again in March - WTI was at $47.42 today - and will push down inflation again in March.

• 8:30 AM ET, the Consumer Price Index for February. The consensus is for a 0.2% increase in CPI, and for core CPI to increase 0.1%.

• At 9:00 AM, the FHFA House Price Index for January 2015. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, New Home Sales for February from the Census Bureau. The consensus is for a decrease in sales to 475 thousand Seasonally Adjusted Annual Rate (SAAR) in February from 481 thousand in January.

• Also at 10:00 AM, the Richmond Fed Survey of Manufacturing Activity for March.

Lawler: Net Home Orders for Three Large Builders in Latest Quarter

by Calculated Risk on 3/23/2015 04:52:00 PM

From housing economist Tom Lawler:

Below is a table showing net home orders for the quarter ended February 28 of 2015 compared to the comparable quarter of the previous two years.

At least for these three builders, the beginning of this year’s “spring” (a misnomer) home selling season looks materially better than last year’s disappointing season.

Net Home Orders, Quarter Ending February 28YOY % Change
Lennar Corp.5,2874,4654,05518.4%10.1%
KB Home2,1891,7651,67124.0%5.6%
Hovnanian Ent.1,5141,4021,5818.0%-11.3%

Philly Fed: State Coincident Indexes increased in 46 states in January

by Calculated Risk on 3/23/2015 03:55:00 PM

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for January 2015. In the past month, the indexes increased in 46 states, decreased in two, and remained stable in two, for a one-month diffusion index of 88. Over the past three months, the indexes increased in 48 states and decreased in two, for a three-month diffusion index of 92.
Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
Philly Fed Number of States with Increasing ActivityClick on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In January, 47 states had increasing activity (including minor increases). This measure has been moving up and down, and is in the normal range for a recovery.

Philly Fed State Conincident Map Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and is almost all green again.

It seems likely that several oil producing states will turn red sometime in 2015 - possibly Texas, North Dakota, Alaska or Oklahoma.

A Few Comments on February Existing Home Sales

by Calculated Risk on 3/23/2015 12:28:00 PM

Inventory is still very low (down 0.5% year-over-year in February). This will be important to watch over the next month at the start of the Spring buying season.

Note: As usually happens, housing economist Tom Lawler's estimate was closer than the consensus to the NAR reported sales rate.

Also, the NAR reported total sales were up 4.7% from February 2014, however normal equity sales were up even more, and distressed sales down sharply.  From the NAR (from a survey that is far from perfect):

Distressed sales – foreclosures and short sales – were 11 percent of sales in February, unchanged for the third consecutive month and down from 16 percent a year ago. Eight percent of February sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in February (15 percent in January), while short sales were discounted 15 percent (12 percent in January).
Last year in February the NAR reported that 16% of sales were distressed sales.

A rough estimate: Sales in February 2014 were reported at 4.66 million SAAR with 16% distressed.  That gives 746 thousand distressed (annual rate), and 3.91 million equity / non-distressed.  In February 2015, sales were 4.88 million SAAR, with 11% distressed.  That gives 537 thousand distressed - a decline of about 28% from February 2014 - and 4.34 million equity.  Although this survey isn't perfect, this suggests distressed sales were down sharply - and normal sales up around 10%.

Important: If total existing sales decline a little, or move side-ways - due to fewer distressed sales- that is a positive sign for real estate.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Existing Home Sales NSAClick on graph for larger image.

Sales NSA in February (red column) were slightly higher than last year (NSA), and below sales in February 2013.

Existing Home Sales in February: 4.88 million SAAR, Inventory down slightly Year-over-year