Challenger Job-Cut Report (February 2014)

- Announced Layoffs  41,835. Previous was 45,107

Gallup US Payroll to Population (February 2014)

- Payroll/Population 43.1.  Previous was 42.0.

This is a positive bit of data but it is based on a survey of 1,000 adults.  Tomorrow's BLS report will tell us a more accurate Labor Participation Rate.

 Jobless Claims (week ended March 1, 2014)

- New Claims (seasonally adjusted)  323,000. Previous revised to 338,000

- 4-week Moving Average (seasonally adjusted) 336,500. Previous 338,250

- New Claims (unadjusted) totaled 317,183 an increase of 5,702 from the previous week.

Worker Productivity and Costs (4thQ2013)

- Nonfarm productivity Quarter/Quarter (seasonally adjusted, annualized) 1.8%. Previous revised to +3.5%

- Unit labor costs Quarter/Quarter (seasonally adjusted, annualized) -0.1%. Previous revised to -2.1%.

This data points to an increasing problem for jobs - employers continue to get more GDP/(hour worked) and the demand for jobs decreases.

Factory Orders (January 2014)

- Orders Month/Month -0.7%. Previous was revised down to -2.0%.

This is all Factory Orders - durable and non-durable goods.  We have seen this week data suggesting that the supply side had gotten ahead of the demand side and are seeing naturalcorrecting moves.  When all is said and done the consumer sets the pace.

 

MBA Mortgage Applications (week ended 2/28/2014)

- Purchase Index Week/Week +9.0%. Previous weeks were -4.0%, -6.0%, -5.0%, -4.0%, +2.0%, -4.0%, +12.0%, -1.0%, -4.0%, -6.0%, +1.0%, and -4.0%.

- Refinance Index Week/Week +10.0%. Previous weeks were -11.0%, -3.0%, -0.2%, +3.0%, -2.0%, +10.0%, +11.0%, +5.0%, -8.0%, +2.0%, and -18.0%.

- Composite Index Week/Week +9.4%. Previous weeks were -8.5%, -4.1%, -0.2%, +0.4%, -0.2%, +4.7%, +11.9%,+2.6%, -6.3%, -5.5%, and +1.0%.

Applications recovered some of the losses of the three previous weeks.  Year-on-year Purchase Applications are off 19%.

ADP Private Jobs (February 2014)

- ADP Private Jobs +139,000.  Previous revised from +175,000 to +127,000 making the net gain from previous 91,000.

This is a weak report.

PMI Services Index (February 2014)

- Level 53.3.  Previous was 56.7.

Growth but at a slower pace.

ISM Non-manufacturing Index (February 2014)

- Index level 51.6. Previous was 54.0.

What we see here today may be a result of the demand side not meeting the expectations of the supply side.  This should result in a lower "I "(inventory) component for 1stQ2014 GDP.  This was expected.

ICSC-Goldman Store Sales  (week ended 3/1/2014)

- Store Sales Week/Week +0.3%. Previous was -0.6%

- Store Sales Year/Year +1.5%. Previous was +1.4%

Redbook Store Sales (week ended 3/1/2014)

- Store Sales Year/Year +2.9%. Previous was +2.9%.

The Consumer Metrics Institute Absolute Demand Index which measures online shopping has been flat for 8 days after falling for 6 days.

This data is a bit weak.  Consumer Spending may be slowing or, at best, flat and consumer spending drives everything.

Personal Income and Outlays (January 2014)

- Personal Income Month/Month  +0.3%. Previous was revised to +0.0%

- Consumer Spending Month/Month +0.4%. Previous was revised to +0.1%

- PCE Price Index Month/Month  +0.3%. Previous was revised to -0.1%

- Core PCE price index  Month/Month +0.1%

- Personal Income Year/Year +4.1%. Previous was revised to -0.7%

- Consumer Spending Year/Year +3.5%. Previous was revised to +3.2%

- PCE Price Index Year/Year +1.2% - Core PCE price index Year/Year +1.1%

PCE is a measure of inflation for consumer spending.

Some of the increase in Personal Outlays resulted from increased spending on health care consequent to the Affordable Care Act

PMI Manufacturing Index (February 2014)

- Index level 57.1. Previous was 53.7

ISM Manufacturing Index  (February 2014)

- Index level 53.2. Previous was 51.3

Construction Spending (January 2014)

- Construction Spending Month/Month +0.1%. Previous was +0.1%.

 

GDP (4thQ2013)

- Real (inflation adjusted) GDP Quarter/Quarter (seasonally adjusted, annualized) +2.4%. 

- GDP deflator Quarter/Quarter +1.6%.  Previous announcement was +1.3%

The advanced estimate had been +3.2%.  This moves this piece of data from mildly encouraging to mildly discouraging.  It also shows just how poor the advanced estimate of GDP is.  The problem is that several GDP components (government spending, investments, imports, and exports have only 2 of 3 months of data when the advance estimate is made.  The 3rd month is estimated. A GDP growth rate of +2.4% is not going to expand the economy enough to create jobs and provide revenue to support government spending.  One thing I always pay attention to is the ratio of debt/GDP which has gone up massively since the recession started in 2008.

Chicago PMI (February 2014)

- Business Barometer Index 59.8.  Previous was 59.6.

Consumer Sentiment (February 2014)

- University of Michigan Consumer Sentiment 81.6. Previous was 81.2.

This measures consumers' intention to spend in the next 3 months.

Pending Home Sales Index  (January 2014)

- Pending Home Sales Index Month/Month 95.0.  Previous was revised from 92.4 to 94.9.

This comes from NAR (The National Association of Realtors) and is supposed to be a leading indicator of Existing Home Sales.

 

Durable Goods Orders (January 2014)

- New Orders Month/Month -1.0%. Previous was revised to -5.3%.

- New Orders Year/Year  +4.6%. Previous was -0.8%

- Ex-transportation Month/Month +1.1%. Previous was revised to -1.9%

- Ex-transportation Year/Year +1.2%. Previous was +2.7%

While the headline is weak, the more important ex-trans shows growth.  That, however, is by comparison to a very weak prior month.

Jobless Claims (week ended 2/22/1024)

- New Claims (seasonally adjusted) 348,000. Previous was 334,000

- 4-week Moving Average 338,250

- New Claims (unadjusted)  totaled 310,816 a decrease of 10,598 from the previous week.

 

MBA Mortgage Applications (week ended 2/21/2014)

- Purchase Index Week/Week -4.0%. Previous weeks were -6.0%, -5.0%, -4.0%, +2.0%, -4.0%, +12.0%, -1.0%, -4.0%, -6.0%, +1.0%, -4.0%, and -0.2%.

- Refinance Index Week/Week -11.0%. Previous weeks were -3.0%, -0.2%, +3.0%, -2.0%, +10.0%, +11.0%, +5.0%, -8.0%, +2.0%, -18.0%, and -0.2%.

- Composite Index Week/Week -8.5%. Previous weeks were -4.1%, -0.2%, +0.4%, -0.2%, +4.7%, +11.9%,+2.6%, -6.3%, -5.5%, +1.0%, and -12.8%.

Year-on-Year the Purchase Index is down 15%.

To repeat what I said last week: I believe that there are two things operating:  1) fewer people feel confident enough to commit their cash and monthly obligations to owning a home and 2) CFPB has made mortgage qualifying more difficult.

What we are witnessing may be systemic rather than cyclic.  By that I mean that fewer young people are able to afford to buy houses. The same thing is happening with cars - another high-ticket item.

New Home Sales (January 2014)

- New Home Sales (seasonally adjusted, annualized) 468,000. Previous was 427,000.

The two streams of data above are not likely to encourage developers to build new homes.  In a sort or worst case we still see prices increasing because supply has decreased.

ICSC-Goldman Store Sales  (week ended 2/22/2014)

- Store Sales Week/Week -0.6%. Previous was +2.5%

- Store Sales Year/Year +1.4 %. Previous was +2.1%

Redbook Store Sales  (week ended 2/22/2014)

- Store Sales Year/Year +2.9%. Previous was +3.2%.

These numbers are weak.

FHFA House Price Index (December 2013)

- Month/Month  +0.8%. Previous was -0.1% - Year/Year change  7.7%. Previous was +7.3%

S&P Case-Shiller Home Price Index (November 2013)

- 20-city, Seasonally Adjusted Month/Month +0.8%. Previous was  +0.9%

- 20-city, not Seasonally Adjusted Month/Mont -0.1%. Previous was -0.1%

- 20-city, not Seasonally Adjusted Year/Year +13.4%. Previous was +13.7%

Consumer Confidence  (February 2014)

- Consumer Confidence 78.2. Previous was revised down to 79.4.

This is a survey index taken by The Conference Board and is supposed to measure consumers' predisposition to spend.

Richmond Federal Reserve Manufacturing Index (February 2014)

- level change -6. Previous was 12. 

Chicago Federal Reserve National Activity Index (January 2014)

- Level -0.39. Previous was -0.03

Some of this is due to the harsh weather.

Dallas Federal Reserve Manufacturing Survey  (February 2014)

- Business Activity Index 0. Previous was 3.8.

This is from a monthly survey of manufacturers in Texas.

Existing Home Sales (January 2014)

- Existing Home Sales (seasonally adjusted, annualized) 4,620,000.  Previous was 4,870,000.

Sales are -5.1% both month/month and year/year.

One of the continuing stores regarding Home Sales is that many are purchased with all cash.  As mortgage qualifying has gotten tougher sellers are more likely to take a lower all cash offer than an offer contingent on the buyer qualifying for a mortgage.

This weak report follows yesterday's report showing both Housing Starts and Permits down.