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Sunday, March 31, 2024

Monday: ISM Mfg, Construction Spending

by Calculated Risk on 3/31/2024 06:11:00 PM

Weekend:
Schedule for Week of March 31, 2024

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for March. The consensus is for the ISM to be at 48.5, up from 47.8 in February.  

• Also at 10:00 AM, Construction Spending for February. The consensus is for 0.5% increase in construction spending.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 8 and DOW futures are up 67 (fair value).

Oil prices were up over the last week with WTI futures at $83.17 per barrel and Brent at $87.00 per barrel. A year ago, WTI was at $76, and Brent was at $79 - so WTI oil prices are up about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.51 per gallon. A year ago, prices were at $3.49 per gallon, so gasoline prices are up $0.02 year-over-year.

Las Vegas February 2024: Visitor Traffic Up 9.5% YoY; Convention Traffic Up 15%

by Calculated Risk on 3/31/2024 08:21:00 AM

From the Las Vegas Visitor Authority: January 2024 Las Vegas Visitor Statistics

With an extra day from the leap year, a notable YoY increase in available rooms, a strong group segment and of course, a Super Bowl, the destination saw a robust YoY increase in visitors and record‐breaking room rates. Visitation for the month saw a 9.5% increase to reach 3.37M visitors, or roughly 300,000 more visitors than last February.

With the recurring NAHB Int'l Builders' Show and Kitchen & Bath Industry Show, along with the rotational returns of National Auto Dealers Association (24k attendees) and Int’l Roofing Expo (13k attendees) and several mid‐sized shows at properties across the destination, estimated convention attendance reached nearly 765k, +15.3% vs. last Feb.

Despite the larger room inventory vs. last year, overall hotel occupancy for the month surpassed last February by 1.7 pts to reach 83.9% as Weekend occupancy reached 90.3%, up 1.0 pts YoY, and Midweek occupancy came in at 81%, up 2.2 pts YoY.

Driven by dramatically strong rates during Super Bowl, ADR for the month exceeded $248 while RevPAR hit a record $208, +43.5% YoY
emphasis added
Las Vegas Visitor Traffic Click on graph for larger image.

The first graph shows visitor traffic for 2019 (Black), 2020 (dark blue), 2021 (light blue), 2022 (light orange), 2023 (dark orange) and 2024 (red).

Visitor traffic was up 9.5% compared to last February.  Visitor traffic was up 5.8% compared to the same month in 2019.

The second graph shows convention traffic.

Las Vegas Convention Traffic
Convention traffic was up 15.3% compared to February 2023, and up 2.2% compared to February 2019.  

Note: There was almost no convention traffic from April 2020 through May 2021.

Leap year and the Super Bowl boosted traffic in February.

Saturday, March 30, 2024

Real Estate Newsletter Articles this Week: House Price Index Up 6.0% year-over-year

by Calculated Risk on 3/30/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Case-Shiller: National House Price Index Up 6.0% year-over-year in January

New Home Sales at 662,000 Annual Rate in February

Inflation Adjusted House Prices 2.4% Below Peak

FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

Fannie and Freddie: Single Family Serious Delinquency Rate Decreased, Multi-family Decreased in February

Final Look at Local Housing Markets in February

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

Schedule for Week of March 31, 2024

by Calculated Risk on 3/30/2024 08:11:00 AM

The key report scheduled for this week is the March employment report on Friday.

Other key reports include the February Trade Deficit and March Auto Sales.

For manufacturing, the March ISM Manufacturing survey will be released.

----- Monday, April 1st -----

10:00 AM: ISM Manufacturing Index for March. The consensus is for the ISM to be at 48.5, up from 47.8 in February.  

10:00 AM: Construction Spending for February. The consensus is for 0.5% increase in construction spending.

----- Tuesday, April 2nd -----

8:00 AM: Corelogic House Price index for February.

Job Openings and Labor Turnover Survey10:00 AM ET: Job Openings and Labor Turnover Survey for February from the BLS.

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

Jobs openings decreased slightly in January to 8.86 million from 8.89 million in December.

The number of job openings (black) were down 15% year-over-year. Quits were down 13% year-over-year.

Vehicle SalesAll Day: Light vehicle sales for March. The consensus is for light vehicle sales to be 15.9 million SAAR in March, up from 15.8 million in February (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the February sales rate.

----- Wednesday, April 3rd -----

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

8:15 AM: The ADP Employment Report for March. This report is for private payrolls only (no government). The consensus is for 155,000 payroll jobs added in March, up from 140,000 added in February.

10:00 AM: the ISM Services Index for March.

----- Thursday, April 4th -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 208 thousand initial claims, down from 210 thousand last week.

U.S. Trade Deficit8:30 AM: Trade Balance report for February from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $66.5 billion.  The U.S. trade deficit was at $67.4 billion in January.

----- Friday, April 5th -----

Employment per month8:30 AM: Employment Report for March.   The consensus is for 200,000 jobs added, and for the unemployment rate to be unchanged at 3.9%.

There were 275,000 jobs added in February, and the unemployment rate was at 3.9%.

This graph shows the jobs added per month since January 2021.

Friday, March 29, 2024

March 29th COVID Update: Weekly Deaths Decreased

by Calculated Risk on 3/29/2024 07:17:00 PM

Mortgage RatesNote: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Due to changes at the CDC, weekly cases are no longer updated.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Hospitalizations have declined significantly from the winter high of 30,025 but are still above the low of 5,380 last year.

COVID Metrics
 NowWeek
Ago
Goal
Hospitalized28,58410,326≤3,0001
Deaths per Week21,1641,234≤3501
1my goals to stop weekly posts,
2Weekly for Currently Hospitalized, and Deaths
🚩 Increasing number weekly for Hospitalized and Deaths
✅ Goal met.

COVID-19 Deaths per WeekClick on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Weekly deaths have declined sharply from the recent peak of 2,547 but are still more than double the low of 490 last July.

And here is a graph I'm following on COVID in wastewater as of March 23rd:

COVID-19 WastewaterThis appears to be a leading indicator for COVID hospitalizations and deaths.

Nationally, COVID in wastewater is now off more than 85% from the holiday peak at the end of December, and that suggests weekly hospitalizations and deaths will continue to decline.

FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

by Calculated Risk on 3/29/2024 02:09:00 PM

Today, in the Calculated Risk Real Estate Newsletter: FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

A brief excerpt:

Here are some graphs on outstanding mortgages by interest rate, the average mortgage interest rate, borrowers’ credit scores and current loan-to-value (LTV) from the FHFA’s National Mortgage Database through Q4 2023 (released this morning).
...
FHFA Percent Mortgage Rate First LienHere is some data showing the distribution of interest rates on closed-end, fixed-rate 1-4 family mortgages outstanding at the end of each quarter since Q1 2013 through Q4 2023.

This shows the surge in the percent of loans under 3%, and also under 4%, starting in early 2020 as mortgage rates declined sharply during the pandemic. The percent of outstanding loans under 4% peaked in Q1 2022 at 65.3% (now at 58.1%), and the percent under 5% peaked at 85.6% (now at 77.0%). These low existing mortgage rates makes it difficult for homeowners to sell their homes and buy a new home since their monthly payments would increase sharply. This is a key reason existing home inventory levels are so low. See: "The Lock-In Effect of Rising Mortgage Rates"

The percent of loans over 6% bottomed in Q2 2022 at 7.2% and has increased to 13.4% in Q4 2023.
There is much more in the article.

Q1 GDP Tracking: Just Over 2%

by Calculated Risk on 3/29/2024 11:47:00 AM

From BofA:

1Q GDP tracking remained at 2.2% q/q saar largely due to downward revisions to core capital goods orders and shipments and lower than expected core capital goods shipments being offset by higher than expected manufacturing inventories in the February durable goods print [Mar 28th estimate]
emphasis added
From Goldman:
After incorporating this morning’s data and yesterday’s GDP release, we have increased our Q1 GDP tracking estimate by 0.3pp to +2.1% (qoq ar), reflecting stronger consumption growth and a larger contribution from inventory accumulation that more than offset a slightly wider trade deficit. Our Q1 domestic final sales forecast now stands at +2.9% (qoq ar). [Mar 29th estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 2.3 percent on March 29, up from 2.1 percent on March 26. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcast of first-quarter real personal consumption expenditures growth increased from 1.9 percent to 2.6 percent, while the nowcast of the contribution of the change in real net exports to first-quarter real GDP growth decreased from -0.16 percentage points to -0.47 percentage points. [March 29th estimate]

PCE Measure of Shelter Slows to 5.8% YoY in February

by Calculated Risk on 3/29/2024 08:56:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through February 2024.

ShelterCPI Shelter was up 5.8% year-over-year in February, down from 6.1% in January, and down from the cycle peak of 8.2% in March 2023.


Housing (PCE) was up 5.8% YoY in February, down from 6.1% in January, and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will continue to slow over the next year.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 6 months (annualized):

PCE Prices 6-Month AnnualizedKey measures are slightly above the Fed's target on a 6-month basis.

PCE Price Index: 2.5%
Core PCE Prices: 2.9%
Core minus Housing: 2.3%

Personal Income increased 0.3% in February; Spending increased 0.8%

by Calculated Risk on 3/29/2024 08:30:00 AM

From the BEA: Personal Income and Outlays for February:

Personal income increased $66.5 billion (0.3 percent at a monthly rate) in February, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $50.3 billion (0.2 percent) and personal consumption expenditures (PCE) increased $145.5 billion (0.8 percent).

The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Real DPI decreased 0.1 percent in February and real PCE increased 0.4 percent; goods increased 0.1 percent and services increased 0.6 percent .
emphasis added
The February PCE price index increased 2.5 percent year-over-year (YoY), up from 2.4 percent YoY in January, and down from the peak of 7.1 percent in June 2022.

The PCE price index, excluding food and energy, increased 2.8 percent YoY, down from 2.9 percent in January, and down from the peak of 5.6 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through January 2024 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was above expectations and PCE was at expectations.

Inflation was at expectations.

Using the two-month method to estimate Q1 real PCE growth, real PCE was increasing at a 2.7% annual rate in Q1 2024. (Using the mid-month method, real PCE was increasing at 2.7%).  This suggests solid PCE growth in Q1.

Thursday, March 28, 2024

Friday: Personal Income and Outlays, PCE Prices, Fed Chair Powell

by Calculated Risk on 3/28/2024 07:50:00 PM

All US markets will be closed in observance of Good Friday.

Mortgage Rates Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Personal Income and Outlays for February. The consensus is for a 0.4% increase in personal income, and for a 0.5% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.8% YoY.

• At 11:30 AM, Discussion, Fed Chair Jerome Powell, Moderated Discussion with Kai Ryssdal, At the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference, San Francisco, Calif