by Calculated Risk on 3/13/2018 11:11:00 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 0.2% (1.9% annualized rate) in February. The 16% trimmed-mean Consumer Price Index rose 0.1% (1.2% 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% (1.8% annualized rate) in February. The CPI less food and energy rose 0.2% (2.2% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed released the median CPI details for February here.  Motor fuel was down 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 2.4%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy rose 1.8%. Core PCE is for January and increased 1.5% year-over-year.

On a monthly basis, median CPI was at 1.9% annualized, trimmed-mean CPI was at 1.2% annualized, and core CPI was at 2.2% annualized.

Using these measures, inflation was about the same year-over-year in February as in January.  Overall, these measures are close, but still mostly below, the Fed's 2% target  (Median CPI is slightly above).

by Calculated Risk on 3/13/2018 09:06:00 AM

From the National Federation of Independent Business (NFIB): February 2018 Report: Small Business Optimism Index

Small business owners are showing unprecedented confidence in the economy as the optimism index continues at record high numbers, rising to 107.6 in February, according to the NFIB Small Business Economic Trends Survey, released today. The historically high numbers include a jump in small business owners increasing capital outlays and raising compensation.

Job creation remained solid in the small business sector as owners reported a seasonally adjusted average employment change per firm of 0.22 workers, a strong showing and a repeat of last month. ... Fifty-two percent reported hiring or trying to hire (down 3 points), but 47 percent (90 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (unchanged), exceeding the percentage citing taxes or the cost of regulation.
emphasis added

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index increased to 107.6 in February.

Note: Usually small business owners complain about taxes and regulations.  However, during the recession, "poor sales" was the top problem.

Now the difficulty of finding qualified workers is the top problem.

by Calculated Risk on 3/13/2018 08:51:00 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 after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment.
...
The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January. ... The all items index rose 2.2 percent for the 12 months ending February, a slightly larger increase than the 2.1-percent rise for the 12 months ending January. The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 7.7 percent and the food index advanced 1.4 percent.
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 a 0.2% increase in core CPI.

by Calculated Risk on 3/12/2018 06:10:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Just Barely Lower Ahead of Key Inflation Data

Mortgage rates spent the entirety of last week at the same levels based on end-of-day rates sheets from the average lender. ... Whereas today was fairly calm for markets and rates, tomorrow brings bigger risks. This is primarily due to the release of an important report on inflation in the morning. [30YR FIXED - 4.5-4.625%]
emphasis added

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for February.

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

by Calculated Risk on 3/12/2018 01:12:00 PM

Two more graphs based on the February employment report ...

The BLS diffusion index for total private employment was at 68.6 in February, up from 58.9 in January.

For manufacturing, the diffusion index was at 69.1, up from 59.2 in January.

Click on graph for larger image.

Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS.  Above 60 is very good.  From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.

Overall both total private and manufacturing job growth was widespread in February.

The second graph shows the employment-population ratio and participation rate for those 25 to 54 years old.

Since the overall participation rate has declined recently due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle.

The 25 to 54 participation rate increased in February at 82.2%, and the 25 to 54 employment population ratio increased to 79.3%.

The participation rate has been trending down for this group since the late '90s, however, with more younger workers (and fewer 50+ age workers), the prime participation rate might move up some more.

by Calculated Risk on 3/12/2018 10:35:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Unemployment rates were lower in January in 6 states and the District of Columbia and stable in 44 states, the U.S. Bureau of Labor Statistics reported today. Sixteen states had jobless rate decreases from a year earlier and 34 states and the District had little or no change. The national unemployment rate was unchanged from December at 4.1 percent but was 0.7 percentage point lower than in January 2017.
...
Hawaii had the lowest unemployment rate in January, 2.1 percent. The rates in Alabama (3.7 percent), California (4.4 percent), Maine (3.0 percent), and Mississippi (4.6 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 7.3 percent.

emphasis added

Click on graph for larger image.

This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession.

The size of the blue bar indicates the amount of improvement.   The yellow squares are the lowest unemployment rate per state since 1976.

Twelve states have reached new all time lows since the end of the 2007 recession.  These twelve states are: Alabama, Arkansas, California, Colorado, Hawaii, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, and Wisconsin.

The states are ranked by the highest current unemployment rate. Alaska, at 7.3%, had the highest state unemployment rate.

The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red).

Currently one state, Alaska, has an unemployment rate at or above 7% (light blue); And only Alaska is above 6% (dark blue).

by Calculated Risk on 3/12/2018 08:43:00 AM

A few comments from Steven Kopits of Princeton Energy Advisors LLC on Mar 9, 2018:

• Total US oil rigs were down this week, -4 to 796

• Horizontal oil rigs fell, -5 to 694. This was the third biggest weekly drop since the trough of the cycle in May 2016
...
• None of the plays, except the Permian, is above their July 2017 peak

• We appear to be once again looking at an inflection point

• Both Harold Hamm (CLR) and Mark Papa (ex-EOG) have warned that shales will not live up to expectations. Rig counts ex-Permian support this thesis.

Click on graph for larger image.

CR note: This graph shows the US horizontal rig count by basin.

Graph and comments Courtesy of Steven Kopits of Princeton Energy Advisors LLC.

by Calculated Risk on 3/11/2018 09:18:00 PM

Weekend:
• Schedule for Week of Mar 11, 2018

Monday:
• 10:00 AM, State Employment and Unemployment (Monthly) for January 2018

From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 are up 6, and DOW futures are up 100 (fair value).

Oil prices were up over the last week with WTI futures at $62.23 per barrel and Brent at $65.72 per barrel.  A year ago, WTI was at $48, and Brent was at $50 - so oil prices are up solidly year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.52 per gallon. A year ago prices were at $2.30 per gallon - so gasoline prices are up 22 cents per gallon year-over-year.

by Calculated Risk on 3/11/2018 10:23:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 3 March

The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 25 February through 3 March 2018, according to data from STR.

In comparison with the week of 26 February through 4 March 2017, the industry recorded the following:

• Occupancy: +1.7% to 65.9%
• Average daily rate (ADR): +2.3% to US$126.06
• Revenue per available room (RevPAR): +4.1% to US$83.04
emphasis added

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

Click on graph for larger image.

The red line is for 2018, dash light blue is 2017 (record year due to hurricanes), blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels).

Currently the occupancy rate, to date, is fifth overall - and slightly ahead of the record year in 2017 (2017 finished strong due to the impact of the hurricanes).

Data Source: STR, Courtesy of HotelNewsNow.com

by Calculated Risk on 3/10/2018 08:11:00 AM

The key economic reports this week are February Housing Starts, Retail Sales and the Consumer Price Index (CPI).

For manufacturing, February industrial production, and the March New York, and Philly Fed manufacturing surveys, will be released this week.

----- Monday, Mar 12th -----
10:00 AM: State Employment and Unemployment (Monthly) for January 2018

----- Tuesday, Mar 13th -----
6:00 AM ET: NFIB Small Business Optimism Index for February.

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

----- Wednesday, Mar 14th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Retail sales for February will be released.  The consensus is for a 0.4% increase in retail sales.

This 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 by 3.5% on a YoY basis.

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

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for January.  The consensus is for a 0.5% increase in inventories.

----- Thursday, Mar 15th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 230 thousand initial claims, down from 231 thousand the previous week.

8:30 AM: the Philly Fed manufacturing survey for March. The consensus is for a reading of 23.3, down from 25.8.

8:30 AM ET: The New York Fed Empire State manufacturing survey for March. The consensus is for a reading of 14.6, up from 13.1.

10:00 AM: The March NAHB homebuilder survey. The consensus is for a reading of  72, unchanged from 72 in February. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Friday, Mar 16th -----
8:30 AM: Housing Starts for February.

This graph shows single and total housing starts since 1968.

The consensus is for 1.284 million SAAR, down from 1.326 million SAAR.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for February.

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 77.7%.

10:00 AM ET: Job Openings and Labor Turnover Survey for January from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in December to 5.811 million from 5.978 in November.

The number of job openings (yellow) were up 4.9% year-over-year, and Quits were up 5.6% year-over-year.

10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for March). The consensus is for a reading of 98.5, down from 99.7.