by Calculated Risk on 5/12/2017 11:30:00 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 0.1% (1.4% annualized rate) in April. The 16% trimmed-mean Consumer Price Index also rose 0.1% (1.0% 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% (2.0% annualized rate) in April. The CPI less food and energy rose 0.1% (0.9% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed released the median CPI details for April 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 2.4%, the trimmed-mean CPI rose 2.0%, and the CPI less food and energy rose 1.9%. Core PCE is for March and increased 1.6% year-over-year.

On a monthly basis, median CPI was at 1.4% annualized, trimmed-mean CPI was at 1.0% annualized, and core CPI was at 0.9% annualized.

Using these measures, inflation was soft in April.  Overall these measures are mostly close to the Fed's 2% target (Core PCE is still below).

by Calculated Risk on 5/12/2017 08:47:00 AM

On a monthly basis, retail sales increased 0.4 percent from March to April (seasonally adjusted), and sales were up 4.5 percent from April 2016.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for April 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.9 billion, an increase of 0.4 percent from the previous month, and 4.5 percent above April 2016. ... The February 2017 to March 2017 percent change was revised from down 0.2 percent to up 0.1 percent.

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline were up 0.4% in April.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by3.8% on a YoY basis.

The increase in April was below expectations, however sales for March were revised up. A decent report.

by Calculated Risk on 5/11/2017 08:46:00 PM

Friday:
• At 8:30 AM ET, Retail sales for April will be released.  The consensus is for a 0.6% increase in retail sales.

• Also at 8:30 AM, The Consumer Price Index for April from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for May). The consensus is for a reading of 97.3, up from 97.0 in April.

• Also at 10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for March.  The consensus is for a 0.1% increase in inventories.

by Calculated Risk on 5/11/2017 02:38:00 PM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

From the Port of LA: Port of Los Angeles April Cargo Volumes Set New Record

April cargo volumes surged 8.9 percent at the Port of Los Angeles compared to the same month last year. It was the best April in the Port’s 110-year history.

From the Port of Long Beach: Port of Long Beach Sees April Boost

More ships calling at the Port of Long Beach in April thanks to new business and changes to vessel deployments helped to push container volumes 16.5 percent higher compared to the same month last year.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 0.9% compared to the rolling 12 months ending in March.   Outbound traffic was up 0.5% compared to 12 months ending in March.

The downturn in exports in 2015 was probably due to the slowdown in China and the stronger dollar.  Now exports are picking up again,

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.  

The Chinese New Year was early this year, so imports declined in February and rebounded in March

In general both exports and imports have been increasing.

by Calculated Risk on 5/11/2017 11:41:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 6 May

The U.S. hotel industry reported positive results in the three key performance metrics during the week of 30 April to 6 May 2017, according to data from STR.

In comparison with the week of 1-7 May 2016, the industry reported the following:

• Occupancy: +3.3% to 67.9%
• Average daily rate (ADR): +2.4% to US$126.67
• Revenue per available room (RevPAR): +5.8% to US$85.96

STR analysts note that performance growth was particularly strong on Friday and Saturday due to a comparison with Mother’s Day weekend a year ago.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2017, dashed is 2015, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.

2015 was the best year on record for hotels.

For hotels, the occupancy rate will now move mostly sideways until the summer travel season.

Data Source: STR, Courtesy of HotelNewsNow.com

by Calculated Risk on 5/11/2017 08:43:00 AM

The DOL reported:

In the week ending May 6, the advance figure for seasonally adjusted initial claims was 236,000, a decrease of 2,000 from the previous week's unrevised level of 238,000. The 4-week moving average was 243,500, an increase of 500 from the previous week's unrevised average of 243,000.
emphasis added

The previous week was unrevised.

The following graph shows the 4-week moving average of weekly claims since 1971.

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 243,500.

This was lower than the consensus forecast.

The low level of claims suggests relatively few layoffs.

by Calculated Risk on 5/10/2017 07:44:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Moved Higher This Afternoon

Mortgage rates were steady to slightly higher again today, making it the 13th out of the past 16 business days without an improvement.  The situation was more palatable earlier this morning and quite a few lenders were actually in better territory vs yesterday.  As the day progressed, bond markets (which dictate mortgage rates) deteriorated, resulting in most lenders issuing negative reprices.
...
 Most borrowers won't see a meaningful difference between today's quotes and yesterday's.  Lenders continue operating near a conventional 30yr fixed rate of 4.125% on top tier scenarios, although it's worth noting that the general trend is toward higher rates at the moment.
emphasis added

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 244 thousand initial claims, up from 238 thousand the previous week.

• Also at 8:30 AM, The Producer Price Index for April from the BLS. The consensus is for 0.2% increase in PPI, and a 0.2% increase in core PPI.

by Calculated Risk on 5/10/2017 11:39:00 AM

Three years ago, there were numerous "doom and gloom" stories about housing. I responded with What's Right with Housing? written on May 6, 2014. I wrote:

The first mistake these writers make is they are asking the wrong question. Of course housing is lagging the recovery because of the residual effects of the housing bust and financial crisis (this lag was predicted on this blog and elsewhere for years - it should not be a surprise).

The correct question is: What's right with housing? And there is plenty.
...
Housing is a slow moving market - and the recovery will not be smooth or fast with all the residual problems. But overall housing is clearly improving and the outlook remains positive for the next few years.

What has happened since?

Housing starts are up 25% from March 2014 to March 2017.

New home sales are up 50% from March 2014 to March 2017.

Existing home sales are up 21%.

House prices are up 15% (Case-Shiller National Index February 2014 to February 2017).

Some day I'll be bearish again on housing, but not yet.  Clearly those bearish on housing in 2014 were wrong.

by Calculated Risk on 5/10/2017 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 5, 2017.

... The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to its highest level since October 2015. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 6 percent higher than the same week one year ago. ...

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.23 percent, with points decreasing to 0.31 from 0.32 (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 since 1990.

Refinance activity remains low - and will not increase significantly unless rates fall sharply.


The second graph shows the MBA mortgage purchase index.

Even with the increase in mortgage rates late last year, purchase activity is still up year-over-year.

by Calculated Risk on 5/09/2017 02:44:00 PM

First a note from housing economist Tom Lawler: Next “Official” Census Long-Term Population Projection Not Due Out Until End of This Year

In several earlier reports I highlighted how the last “official” long-term population projections from the Census Bureau (released in December 2014) were way out of date, and that analysts should not use them for any analysis. Someone asked me when the next Census population forecast report would be released, and someone from the Population Projection Staff of the Census Bureau told me that the next official population projections would probably come out at the end of this year.

And from Tom Lawler.

Below is a table showing selected operating statistics for nine large, publicly-traded home builders for the quarter ended March 31, 2017.

Preliminary statistics from the Commerce Department estimated that US new single-family home sales (unadjusted) last quarter were up 12.0% from the comparable quarter of 2016.

	Net Orders			Settlements			Average Closing Price (000s)
Qtr. Ended:	3/17	3/16	% Chg	3/17	3/16	% Chg	3/17	3/16	% Chg
D.R. Horton	13,991	12,292	13.8%	10,685	9,262	15.4%	296	295	0.2%
Pulte Group	6,126	5,652	8.4%	4,225	3,945	7.1%	375	353	6.2%
NVR	4,424	4,137	6.9%	3,256	3,006	8.3%	383	369	3.7%
Cal Atlantic	4,304	4,134	4.1%	3,012	2,727	10.5%	444	432	2.8%
Beazer Homes	1,549	1,538	0.7%	1,239	1,150	7.7%	341	328	3.8%
Meritage Homes	2,135	1,987	7.4%	1,581	1,488	6.3%	418	405	3.2%
MDC Holdings	1,696	1,646	3.0%	1,256	907	38.5%	448	435	3.2%
M/I Homes	1,454	1,314	10.7%	1,038	876	18.5%	373	353	5.7%
Total	35,679	32,700	9.1%	26,292	23,361	12.5%	356	346	2.7%