by Calculated Risk on 2/14/2020 09:22:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production declined 0.3 percent in January, as unseasonably warm weather held down the output of utilities and as a major manufacturer significantly slowed production of civilian aircraft. The index for manufacturing edged down 0.1 percent in January; excluding the production of aircraft and parts, factory output advanced 0.3 percent. The index for mining rose 1.2 percent. At 109.2 percent of its 2012 average, total industrial production was 0.8 percent lower in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.3 percentage point in January to 76.8 percent, a rate that is 3.0 percentage points below its long-run (1972–2019) average.
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Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 10.1 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 76.8% is 3.0% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased in December to  109.2. This is 25.4% above the recession low, and 3.7% above the pre-recession peak.

The change in industrial production was below consensus expectations.

by Calculated Risk on 2/14/2020 08:41:00 AM

On a monthly basis, retail sales increased 0.3 percent from December to January (seasonally adjusted), and sales were up 4.4 percent from January 2019.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for January 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $529.8 billion, an increase of 0.3 percent from the previous month, and 4.4 percent above January 2019. Total sales for the November 2019 through January 2020 period were up 4.4 percent from the same period a year ago. The November 2019 to December 2019 percent change was revised from up 0.3 percent to up 0.2 percent.
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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 0.3% in January.

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 by 3.9% on a YoY basis.

The increase in January was at expectations, however sales in November and December were revised down.

by Calculated Risk on 2/13/2020 07:25:00 PM

Friday:
• At 8:30 AM ET, Retail sales for January is scheduled to be released.  The consensus is for a 0.3% increase in retail sales.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for January. The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to decrease to 76.8%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for February). The consensus is for a reading of 99.3.

by Calculated Risk on 2/13/2020 03:53:00 PM

From HotelNewsNow.com: STR: US hotel results for week ending 8 February

The U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 2-8 February 2020, according to data from STR.

In comparison with the week of 3-9 February 2019, the industry recorded the following:

• Occupancy: -1.4% to 59.0%
• Average daily rate (ADR): +1.5% to US$128.75
• Revenue per available room (RevPAR): 0.0% at US$75.98
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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 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

2020 is off to a solid start, however, STR notes that the new coronavirus could have a significant negative impact on hotels.

by Calculated Risk on 2/13/2020 11:36:00 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 0.3% (3.7% annualized rate) in January. The 16% trimmed-mean Consumer Price Index rose 0.2% (2.9% 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 0.1% (1.8% annualized rate) in January. The CPI less food and energy rose 0.2% (2.9% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed released the median CPI details for January here. Motor fuel decreased at a 17.3% annualized rate in January.

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 2.9%, the trimmed-mean CPI rose 2.4%, and the CPI less food and energy rose 2.3%. Core PCE is for December and increased 1.6% year-over-year.

On a monthly basis, median CPI was at 3.7% annualized and trimmed-mean CPI was at 2.9% annualized.

Overall, these measures are mostly above the Fed's 2% target (Core PCE is below 2%).

by Calculated Risk on 2/13/2020 08:37:00 AM

The DOL reported:

In the week ending February 8, the advance figure for seasonally adjusted initial claims was 205,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 202,000 to 203,000. The 4-week moving average was 212,000, unchanged from the previous week's revised average. The previous week's average was revised up by 250 from 211,750 to 212,000.
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The previous week was revised up.

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 was unchanged at 212,000.

This was lower than the consensus forecast.

by Calculated Risk on 2/13/2020 08:34:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in January on a seasonally adjusted basis, after rising 0.2 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.5 percent before seasonal adjustment.
...
The index for all items less food and energy rose 0.2 percent in January after increasing 0.1 percent in December.
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The all items index increased 2.5 percent for the 12 months ending January, the largest 12-month increase since the period ending October 2018. The index for all items less food and energy rose 2.3 percent over the last 12 months, the same 12-month increase as reported in the previous 3 months.
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Overall inflation was slightly lower than expectations in January. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

by Calculated Risk on 2/12/2020 08:12:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 212,000 initial claims, up from 202,000 last week.

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

by Calculated Risk on 2/12/2020 05:00:00 PM

Special note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Also, most of this traffic was prior to the widespread outbreak of COVID-19 in China.

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.

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 down 0.3% in January compared to the rolling 12 months ending in December.   Outbound traffic was down 0.2% compared to the rolling 12 months ending the previous month.

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 (January 25th in 2020).

In general imports both imports and exports have turned down recently - and will probably be negatively impacted by COVID-19 over the next couple of months.

by Calculated Risk on 2/12/2020 01:03:00 PM

From the HAR: Houston Real Estate Enjoys a Strong Start to 2020

Fresh on the heels of a record-breaking 2019, home sales across greater Houston began the new year with a strong showing as consumers continued to take advantage of historically low interest rates. ...

According to the latest monthly Market Update from the Houston Association of REALTORS® (HAR), 4,699 single-family homes sold in January compared to 4,112 a year earlier. That represents a 14.3 percent increase – the seventh consecutive positive month and the greatest January sales volume hike in seven years.
...
Sales of all property types totaled 5,800, up 15.2 percent from January 2019. Total dollar volume for the month surged 17.1 percent to about $1.6 billion.

"January is a traditionally slower month for home sales coming off the holidays, but the Houston market continues to benefit from low mortgage interest rates and a generally robust economy with healthy employment numbers,” said HAR Chairman John Nugent with RE/MAX Space Center. “All the January home buying activity lowered our housing inventory a little, but we expect to see that grow again as we approach the spring months when more homes typically hit the market."
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Total active listings, or the total number of available properties, rose 3.7 percent to 39,699. … Single-family homes inventory recorded a 3.5-months supply in January, down fractionally from a 3.6-months supply a year earlier.
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Sales in Houston set a record in 2019 and are off to a strong start in 2020.