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Monday, November 22, 2021

Seven High Frequency Indicators for the Economy

by Calculated Risk on 11/22/2021 08:35:00 AM

These indicators are mostly for travel and entertainment.    It is interesting to watch these sectors recover as the pandemic subsides.

----- Airlines: Transportation Security Administration -----

The TSA is providing daily travel numbers.

This data is as of November 20th.

TSA Traveler Data Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red).

The dashed line is the percent of 2019 for the seven day average.

The 7-day average is down 14.3% from the same day in 2019 (85.7% of 2019).  (Dashed line)

Overall, air travel had been off about 20% relative to 2019 for the last four months (with some ups and downs) - and picking up recently.

----- Restaurants: OpenTable -----

The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

IMPORTANT: OpenTable notes: "we’ve updated the data including downloadable dataset from January 1, 2021 onward to compare seated diners from 2021 to 2019, as opposed to year over year." Thanks!

DinersThanks to OpenTable for providing this restaurant data:

This data is updated through November 20, 2021.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Note that this data is for "only the restaurants that have chosen to reopen in a given market". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Dining picked up for the Labor Day weekend, but declined after the holiday - and appears to be declining slightly again.  The 7-day average for the US is down 5% compared to 2019.


----- Movie Tickets: Box Office Mojo -----

Move Box OfficeThis data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Blue is 2020 and Red is 2021.  

The data is from BoxOfficeMojo through November 18th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales were at $89 million last week, down about 66% from the median for the week. 

----- Hotel Occupancy: STR -----

Hotel Occupancy RateThis graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

This data is through November 13th. The occupancy rate was down 4.0% compared to the same week in 2019.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

The occupancy rate will now decline seasonally into the new year.

----- Gasoline Supplied: Energy Information Administration -----

gasoline ConsumptionThis graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Red is for 2021.

As of November 12th, gasoline supplied was up slightly compared to the same week in 2019.

There was the ninth week, out of the last 20, that gasoline supplied was up slightly compared to the same week in 2019 - so consumption is running close to 2019 levels now.

----- Transit: Apple Mobility -----

This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

Apple Mobility Data This data is through November 20th 
for the United States and several selected cities.

The graph is the running 7-day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7 day average for the US is at 112% of the January 2020 level. 

New York City is doing well by this metric, but subway usage in NYC is down sharply (next graph).

----- New York City Subway Usage -----

Here is some interesting data on New York subway usage (HT BR).

New York City Subway UsageThis graph is from Todd W Schneider

This graph shows how much MTA traffic has recovered in each borough (Graph starts at first week in January 2020 and 100 = 2019 average).

Manhattan is at about 42% of normal.

This data is through Friday, November 19th.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

Sunday, November 21, 2021

Monday: Existing Home Sales

by Calculated Risk on 11/21/2021 07:03:00 PM

Weekend:
Schedule for Week of November 21, 2021

Monday:
• At 8:30 AM ET: Chicago Fed National Activity Index for October. This is a composite index of other data.

• At 10:00 AM, Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 6.20 million SAAR, down from 6.29 million in September. Housing economist Tom Lawler expects the NAR to report 6.34 million SAAR.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 4 and DOW futures are up 50 (fair value).

Oil prices were down over the last week with WTI futures at $75.46 per barrel and Brent at $78.29 per barrel. A year ago, WTI was at $42, and Brent was at $44 - so WTI oil prices are up 80% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.39 per gallon. A year ago prices were at $2.10 per gallon, so gasoline prices are up $1.29 per gallon year-over-year.

Recession Measures and NBER

by Calculated Risk on 11/21/2021 11:44:00 AM

Calling the beginning or end of a recession usually takes time.   However, the economic decline in March 2020 was so severe that the National Bureau of Economic Research (NBER) quickly called the end of the expansion in February.

The committee has determined that a peak in monthly economic activity occurred in the U.S. economy in February 2020. The peak marks the end of the expansion that began in June 2009 and the beginning of a recession. The expansion lasted 128 months, the longest in the history of U.S. business cycles dating back to 1854. The previous record was held by the business expansion that lasted for 120 months from March 1991 to March 2001.
...
The usual definition of a recession involves a decline in economic activity that lasts more than a few months. However, in deciding whether to identify a recession, the committee weighs the depth of the contraction, its duration, and whether economic activity declined broadly across the economy (the diffusion of the downturn). The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions. Nonetheless, it concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.
And then - just two months later - in July 2020, the NBER called the end of the recession:
The committee has determined that a trough in monthly economic activity occurred in the US economy in April 2020. The previous peak in economic activity occurred in February 2020. The recession lasted two months, which makes it the shortest US recession on record.
...
In determining that a trough occurred in April 2020, the committee did not conclude that the economy has returned to operating at normal capacity. An expansion is a period of rising economic activity spread across the economy, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession associated with the February 2020 peak. The basis for this decision was the length and strength of the recovery to date.
It will take some time for all major indicators to be above their previous high after the pandemic recession because of the severe contraction as the graphs below show.  All of the following graphs show each measure as a percent of the previous peak.

GDP is the key measure, as the NBER committee notes in their business cycle dating procedure:
The committee views real GDP as the single best measure of aggregate economic activity.
Recession Measure, GDPClick on graph for larger image.

This graph is for real GDP through Q3 2021.

The previous high for real GDP was in Q4 2019.

Real GDP was above Q4 2019 levels in Q2 2021. 

This was a very quick return to new highs, especially given the severity of the downturn.  However, as NBER noted, this was the shortest recession on record (due to the pandemic).

Recession Measure Industrial ProductionThe second graph is for monthly industrial production based on data from the Federal Reserve through Oct 2021.

Industrial production is off 2.5% from the previous peak.

Note that industrial production was weak prior to the onset of the pandemic, and industrial production has recovered to the pre-pandemic level.

Recession Measure EmploymentThe third graph is for employment through October 2021.

Historically employment was a coincident indicator for the end of recessions, but wasn't true for the previous three recessions (1990-1991, 2001, 2007-2009).

Employment is currently off about 2.8% from the pre-recession peak (dashed line).  This is a significant improvement from off 14.7% in April 2020.

There is still ways to go for employment to recover to pre-pandemic levels.

Recession Measure IncomeAnd the last graph is for real personal income excluding transfer payments through September 2021.

Real personal income less transfer payments was still off slightly from the previous peak in September.

These graphs are useful in trying to identify peaks and troughs in economic activity.

Although economic activity bottomed in April 2020, only one of these four major indicators (GDP) is above the previous peak (although real personal income excluding transfer payments is close).

Saturday, November 20, 2021

Real Estate Newsletter Articles this Week

by Calculated Risk on 11/20/2021 02:58:00 PM

At the Calculated Risk Real Estate Newsletter this week:

The "Household Conundrum" And Early Read on Existing Home Sales in October

5th Look at Local Housing Markets in October No Signs of Slowing

Housing Predictions: Guesses and the Data What could cause inventories to increase?

Most Housing Units Under Construction Since 1974 Housing Starts Decreased to 1.520 Million Annual Rate in October

October California Home Sales Sales Down 10.4% YoY. Active Listings down 18.3%

4th Look at Local Housing Markets in October Adding Des Moines, Maryland, South Carolina, and Washington, D.C.

This is usually published several times a week, and provides more in-depth analysis of the housing market.


The blog will continue as always!

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Schedule for Week of November 21, 2021

by Calculated Risk on 11/20/2021 08:11:00 AM

The key reports this week are October New Home sales, Existing Home sales, the second estimate of Q3 GDP, and Personal Income and Outlays for October.

For manufacturing, the Richmond Fed manufacturing survey will be released this week.

----- Monday, November 22nd -----

8:30 AM ET: Chicago Fed National Activity Index for October. This is a composite index of other data.

Existing Home Sales10:00 AM: Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 6.20 million SAAR, down from 6.29 million in September.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report 6.34 million SAAR.

----- Tuesday, November 23rd -----

10:00 AM: Richmond Fed Survey of Manufacturing Activity for November.

----- Wednesday, November 24th -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 270 thousand initial claims, up from 268 thousand last week.

8:30 AM: Gross Domestic Product, 3nd quarter 2020 (Second estimate). The consensus is that real GDP increased 2.1% annualized in Q3, up from 2.0% in the advance estimate of GDP.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 0.2% increase in durable goods orders.

10:00 AM: Personal Income and Outlays for October. The consensus is for a 0.2% increase in personal income, and for a 1.0% increase in personal spending. And for the Core PCE price index to increase 0.4%.

New Home Sales10:00 AM: New Home Sales for October from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 801 thousand SAAR, up from 800 thousand in September.

10:00 AM: University of Michigan's Consumer sentiment index (Final for November). The consensus is for a reading of 66.8.

2:00 PM: FOMC Minutes, Meeting of November 2-3, 2021

----- Thursday, November 25th -----

All US markets will be closed in observance of the Thanksgiving Day Holiday.

----- Friday, November 26th -----

The NYSE and the NASDAQ will close early at 1:00 PM ET.

Friday, November 19, 2021

The "Household Conundrum"

by Calculated Risk on 11/19/2021 07:26:00 PM

Today, in the Real Estate Newsletter: The "Household Conundrum"

Excerpt:

Housing economist Tom Lawler discusses the “household conundrum” - why it is unclear how many households there are in the U.S..
...
One of the challenges facing housing analysts in trying to assess the current and future state of the US housing market is the lack of timely and reliable estimates of the number of and characteristics of US households. This challenge has become even more acute since the onset of the pandemic, as significant declines in response rates to government surveys of households have adversely affected the accuracy of already imperfect household estimates. The lack of reliable household data makes it difficult to assess how much of the astonishing strength in the housing market since the middle of last year has been related to “demographics,” as opposed to behavioral and preference changes associated with the pandemic and, more recently, the surge in investor purchases of single-family homes.
...
While HVS household estimates have always been volatile (partly related to the small sample size of the CPS), and have not matched decennial Census results, the estimates produced since the onset of the pandemic have been … well … ridiculous. Below is a table of the HVS estimates of total and owner-occupied households.

HVS HouseholdAs the table indicates, the number of households estimated from the HVS exploded upward following the onset of the pandemic, and the number of owner-occupied households rose by an astonishing and completely unbelievable amount. And following that surge the HVS estimates of total households fell, and the number of owner-occupied households plummeted!
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November 19th COVID-19: New Cases Increasing Rapidly

by Calculated Risk on 11/19/2021 07:19:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 448,155,906, as of a week ago 437,352,000, or 1.54 million doses per day.

COVID Metrics
 TodayWeek
Ago
Goal
Percent fully Vaccinated59.0%58.7%≥70.0%1
Fully Vaccinated (millions)195.9194.7≥2321
New Cases per Day3🚩94,26073,366≤5,0002
Hospitalized3🚩40,57940,221≤3,0002
Deaths per Day3🚩1,0691,024≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).
2my goals to stop daily posts,
37 day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 5 states that have achieved 70% of total population fully vaccinated: Vermont at 72.4%, Rhode Island, Connecticut, Maine, and Massachusetts at 70.6% .

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 67.9%, New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania,  Illinois, Delaware, Florida, and Hawaii at 60.6%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 59.1%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.4%.

Next up (total population, fully vaccinated according to CDC) are Tennessee at 49.2%, Georgia at 49.1%, Arkansas at 48.9%, Louisiana at 48.5% and North Dakota at 48.4%.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

Lawler: Early Read on Existing Home Sales in October

by Calculated Risk on 11/19/2021 04:00:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 6.34 million in October, up 0.8% from September’s preliminary pace and down 5.8% from last October’s seasonally adjusted pace. Unadjusted sales should show a larger YOY decline, reflecting this October’s lower business day count relative to last October’s.

Local realtor reports, as well as reports from national inventory trackers, suggest that the YOY decline in the inventory of existing homes for sale was slightly larger than was the case in September.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 12.9% from last October.

CR Note: The National Association of Realtors (NAR) is scheduled to release October existing home sales on Monday, November 22, 2021 at 10:00 AM ET. The consensus is for 6.20 million SAAR.   Take the over.


Note that the NAR reported median prices were up 23.6% Year-over-year (YoY) in May, 23.4% in June, 17.8% in July, 14.9% in August and 13.3% in September. And it appears the YoY growth slowed a little more in October.

5th Look at Local Housing Markets in October

by Calculated Risk on 11/19/2021 12:55:00 PM

Today, in the Real Estate Newsletter: 5th Look at Local Housing Markets in October

Excerpt:

This is the fifth look at local markets in October. This update adds Alabama, Austin, Boston, Charlotte, Indiana, Minneapolis, Phoenix, and Rhode Island.
...
Here is a summary of active listings for the housing markets that have reported so far in October. For these markets, inventory was down 6.5% in October MoM from September, and down 24.1% YoY.

Active Housing InventoryOf the markets that have reported so far, inventories in Jacksonville and San Diego are at record lows. Sacramento and Washington, D.C. are the only markets so far with inventory up YoY in October (Austin is essentially unchanged YoY).

Inventory almost always declines seasonally in October, so the MoM decline is not a surprise. Last month, these markets were down 22.1% YoY, so the YoY decline in October is slightly larger than in September. This is not indicating a slowing market.

In California, the C.A.R. reported inventory was down 18.3% YoY, but this isn’t included in the table below since C.A.R. doesn’t report monthly numbers.
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Q4 GDP Forecasts: Around 5% to 6%

by Calculated Risk on 11/19/2021 11:18:00 AM

From BofA:

We continue to track 6% qoq saar for 4Q GDP growth. [November 19 estimate]
emphasis added
From Goldman Sachs
We left our Q4 GDP tracking estimate unchanged on a rounded basis at +5.0% (qoq ar). [November 17 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2021 is 8.2 percent on November 17, down from 8.7 percent on November 16. [November 17 estimate]