Initial Jobless Claims (week ended 12/7/2013)

- New Claims (seasonally adjusted) 368,000. Previous revised to 300,000

- 4-week Moving Average  328,750. Previous was 322,750

- New Claims (unadjusted) totaled 461,422 an increase of 146,241 from the previous week.

While the data is ugly on the surface, I would be careful reading too much into it because the raw data is always volatile in December and the seasonal adjustments this month are also large.

Retail Sales (November 2013)

- Retail Sales Month/Month +0.7%. Previous was +0.6%

- Retail Sales less autos Month/Month 0.4%. Previous was +0.5%

- Less Autos & Gas Month/Month +0.6%. Previous was +0,6%

This data is healthier than the recent Chain Store Sales numbers which are much less complete than Retail Sales.  This stronger Retail Sales data undermines my recent concern that the large portion of the increase in 3rdQ2013GDP was due to inventory growth and that growth would disappear in the 4thQ.  If retail customers are buying that inventory than it is simply the case that stores had a good idea as to what would happen.

Import and Export Prices (November 2013)

- Export Prices Month/Month +0.1%

- Export Prices Year/Year -1.6% - Import Prices Month/Month -0.6%

- Import Prices Year/Year -1.5%

Clearly, inflation is not happening.  PPI is out tomorrow. Enormously increased Monetary Base consequent to QEIII has not led to inflation in the price of goods.  The only inflation we have seen is in the price of equities.

Business Inventories (October 2013)

- Inventories Month/month +0.7%. Previous was +0.6%.  The fact that this lines up with Retail sales supports the idea mentioned above that Inventories are not getting ahead of retail and that we will not see a significant bite out of GDP.

MBA Mortgage Applications (Week ended 12/6/2013)

- Purchase Index Week/Week +1.0%. Previous weeks were -4.0%, -0.2%, +6.0%, -1.8%, -1.0%, +2.0%, +1.0%, -5.0%, -1.0%, -6.0%, +7.0%, and +3.0%.

- Refinance Index Week/Week +2.0%. Previous weeks were -18.0%, -0.2%, +6.0%, -4.0%, +9.0%, -1.0%, +3.0%, +3.0%, and +3.0%.

- Composite Index Week/Week +1.0%.  Previous weeks were -12.8%, -0.3%, -2.3%, -2.8%, +6.4%, -0.6%, +0.3%, +1.3%, 0.4%, +5.5%, and +11.2%.

The Purchase Index is what is important for the economy.  Purchase Mortgage applications are 10% less than they were a year ago.  This likely indicates flattening home sales and prices. 

 

ICSC-Goldman Store Sales (week ended 12/7/2013)

- Store Sales Week/Week -1.6%. Previous was -2.8% - Store Sales Year/Year +1.5%. Previous was +2.5%

Redbook (week ended 12/7/2013)

- Store Sales Year/Year +2.6%. Previous was +4.9%

Consumer Metrics Institute Absolute Demand Index of on-line shopping

This Index has been declining since the Thanksgiving Holiday.

All of these shopping indices show a miserable Christmas shopping season so far.

Wholesale Trade (October 2013)

- Inventories Month/Month +1.4%. Previous was +0.5%.

We have consistently seen wholesale data out of line with retail. If retail customers do not buy this stuff then inventory growth will take a hit and the (I)nventory component of GDP will decline.

JOLTS (October 2013)

- Job Openings 3,925,000. Previous was 3,883,000.

This measures Job Openings - the current equivalent of "Help Wanted" signs.  The dynamics of how these openings get filled is discussed in my monthly report following the release of the BLS Employment Situation Report.

NFIB Small Business Optimism Index (November 2013)

- Index level 92.5. Previous was 91.6.

Small Businesses remain optimistic but owners may be concerned regarding health care costs.  Health care cost is a major component of employee compensation.  Real (inflation adjusted) wages have been declining but real employee compensation (the cost to the employer) has been increasing.

FNMA/FHLMC Guarantee Fees

This is not a fundamental but sure as heck impacts rates.  FHFA announced that starting in March 2014 there will be another guarantee fee increase on FNMA/FHLMC loans.  The adverse market upfront fee of 25 basis points will be eliminated except for 4 of the states which have judicial foreclosure processes.  The judicial foreclosure process greatly increases the length of time for the foreclosure and that increases the loss to the lender/investor.

The increase in guarantee fees is explicitly intended to push the mortgage market away from Treasury guarantee of FNMA/FHLMC debt. This is a move toward private securitization.

BLS Employment Situation Report (November 2013)

- Non-farm Jobs +203,000.  Previous revised from +204,000 to +200,000

- Unemployment Rate 7.0%

- Average Hourly Earnings $24,15 up 4 cents

- Average Workweek 34.5 hours up from 34.4 hours

- Labor Participation Rate 63.0 up from 62.8

This is another mediocre report. The fact that this is regarded as a healthy report indicate just how weak job growth is. The Unemployment rate at 7.0% gives the Fed an excuse to taper.

Personal Income and Outlays (October 2013)

- Personal Income Month/Month-0.1%  Previous was +0.5%

- Consumer Spending Month/Month -0.3%%  Previous was +0.2%

- PCE Price Index Month/Month 0.0%. Previous was +0.1%

- Core PCE price index Month/Month 0.1%. Previous was +0.1% - PCE Price Index Year/Year 0.7%. Previous was +0.9%

- Core PCE price index Year/Year +1.1%.  Previous was +1.2%.

3rdQ2013 GDP - 2nd Estimate

- Real (inflation adjusted) GDP Quarter/Quarter (seasonally adjusted, annualized) 3.6%. Initial announcement was +2.8%.

That data looks good but was fattened by the large increase in inventories.  Gross Private Domestic Investment was +16.7%. One bit of data which should always be regarded is Final Sales of Domestic Products which was +1.9%.

GDP = C+I+G+(X-M).  C= Consumer Spending, I = Investments and Inventories, G= Government Spending, X=exports, M=Imports.

As with may important releases of macroeconomic data the headline gets the attention  of the media which is unwilling or unable to take the extra 20 seconds of TV time to explain the reports.  This is a mediocre report dressed to look good with fat investment growth.

The GDP Deflator - a measure of inflation adjusted according as each component's percent contribution to GDP - was +2.% up from +1.9%.

Jobless Claims (week ended 11/30/2013)

- New Claims (seasonally adjusted) 298,000. Previous was 321,000

- New Claims (unadjusted) totaled 313,973, a decrease of 54,507 from the previous week

- 4-week Moving Average 322,250. Previous was 331,750

While the seasonal adjustments are made more difficult by the floating nature of the Thanksgiving Holiday and the start of the Christmas shopping season I would still regard this as an indication of an improving jobs market.

Factory Orders (October)

- Month/Month -0.9%. Previous was revised from -0.1% to +1.8%

These are orders which could indicate future slowing of growth in "I" the investment component of GDP.

Corporate Profits (3rdQ2013)

- After-tax Profits Year/Year +5.8%. previous was +5.3%.

There are many ways of measuring Corporate Profits.  The above is from BEA and amounts to $1.872 trillion.  St. Louis Federal Reserve reports a slightly more nuanced version which has profits at $1,712.2 trillion for 3rd Q2013.  This is about twice the rate that corporate profits bottomed out in 2009.  Corporations are doing well.

 

MBA Mortgage Applications (Week ended 11/29/2013)

- Purchase Index Week/Week -4.0%. Previous weeks were -0.2%, +6.0%, -1.8%, -1.0%, +2.0%, +1.0%, -5.0%, -1.0%, -6.0%, +7.0%, +3.0%, and -3.0%.

- Refinance Index Week/Week -18.0%. Previous weeks were -0.2%, +6.0%, -4.0%, +9.0%, -1.0%, +3.0%, +3.0%, +3.0%, and +5.0%.

- Composite Index Week/Week -12.8%.  Previous weeks were -0.3%, -2.3%, -2.8%, +6.4%, -0.6%, +0.3%, +1.3%, 0.4%, +5.5%, +11.2% and -13.5%.

Refinancing is rate dependent and higher rates explain the large dip.  The Purchase Index could ne indicative of a softening demand for housing.  This softening demand could be compounded by the new Qualified Residential Mortgage standards which will go into effect on January 10.  Also, the housing market is still converting a number of foreclosures into rentals.  Increased rents affect CPI which uses rent and owner-equivalent rent as a measure of housing cost.

New Home Sales (September and October 2013)

- New Home Sales (seasonally adjusted, annualized) September 354,000 with August revised down from 421,000 to 379,000

- New Home Sales (seasonally adjusted, annualized) October 444,000.

This data might be regarded as more positive if not for the downturn in Purchase Mortgage Applications.

ADP Private Jobs (November 2013)

- ADP jobs +215,000. Previous was revised from +130,000 to +184,000.  That's 269,000 more jobs which is better than expected.

Trade Deficit (October 2013)

- Trade Deficit $40.6 billion. Previous was revised from $41.8 billion to $43.0 billion.  Exports were up 1.8%.

ISM Non-Manufacturing Index (November 2013)

- Index 53.9. Previous was 55.4.

The employment growth in this index is disappointing showing the lowest reading in 6 months.

All-in-all a day of conflicting data.

ICSC-Goldman Store Sales (week ended 11/30/2013)

- Store Sales Week/Week -2.8%. Previous was +2.6% 

- Store Sales Year/Year +2.5%. Previous was +2.1%

Redbook Store Sales (week ended 11/30/2013)

- Store Sales Year/Year  +4.9%. Previous was +3.8%.

Once again these two reports contradict each other.  It is especially annoying that this included the media-frenzied concern about Black Friday.

The Consumer Metrics Daily Absolute Demand Index, a near real time metric of online spending downturned at the end of last week.

PMI Manufacturing Index  (November 2013)

- Level 54.7. Previous was 51.8. 

This survey index of manufacturers is at the highest level since January.

ISM Manufacturing Index (November 2013)

- Level 57.3. Previous was 56.4.

This is a survey of purchasing managers. It surveys new orders, production, employment, supplier deliveries, and inventories.

These two survey indices indicate improvement in the manufacturing sector.

Construction Spending  (September & October 2013)

Because of the shutdown 2 monthly reports are being released today.

- September Construction Spending Month/Month -0.3%. Previous was revised from +0.6% to +0.1%.

- October Construction Spending Month/Month +0.8%. Previous was revised -0.3%

With the adjustment to August we have flat Construction Spending for the past 3 months.

This measures the amount of money being spent on all construction projects: residential, commercial, and government.

 

Being the day before Thanksgiving we have, in essence, three days worth of releases today.  Get a cup of coffe and read on.

MBA Mortgage Applications (Week ended 11/22/2013)

- Purchase Index Week/Week -0.2%. Previous weeks were +6.0%, -1.8%, -1.0%, +2.0%, +1.0%, -5.0%, -1.0%, -6.0%, +7.0%, +3.0%, -3.0%, and -0.4%.

- Refinance Index Week/Week -0.2% . Previous weeks were +6.0%, -4.0%, +9.0%, -1.0%, +3.0%, +3.0%, +3.0%, +5.0%, +18%, and -20%.

- Composite Index Week/Week -0.3%.  Previous weeks were -2.3%, -2.8%, +6.4%, -0.6%, +0.3%, +1.3%, 0.4%, +5.5%, +11.2%. -13.5%, and +2.0%.

This data is market neutral.

Durable Goods Orders (October 2013)

- New Orders Month/Month -2.0%. Previous was +4.1% - New Orders Year/Year +5.3%. Previous was +8.1% - Ex-transportation  Month/Month -0.1%. Previous was +0.2%  - Ex-transportation Year/Year 4.3%. Previous was +6.3%.

While the data may appear disappointing all of the previous readings were revised upwards moving some of the gains noted into September.

I would also call this market neutral.

Jobless Claims (week ended 11/23/2013)

- New Claims (seasonally adjusted, annualized) 316,000. Previous was 326,000. - New Claims (actual) totaled 363,053 in the week ending November 23, an increase of 37,229 from the previous week. There were 358,869 initial claims in the comparable week in 2012.  - 4-week Moving Average  331,750. Previous was 339,225

While Jobless Claims look very good on the surface the fact is that seasonal adjustments are making it look better. At this time of year the correct seasonal adjustments are difficult to divine because like Easter, Thanksgiving moves around the calendar.

Chicago Federal National Activity Index (October 2013)

- Index level -0.18. Previous was +0.18. - last 3 months average +0.06. Previous was -0.2

Chicago PMI  (November 2013)

- Business Barometer Index 63.0. Previous was 65.9.

These 2 bits of data from Chicago are relatively positive.

Consumer Sentiment (November 2013)

- Sentiment 75.1. Previous was 72.0

This is a survey index which is supposed to measure consumers' predisposition to spend.  This pop before the holiday season is a positive sign.

Leading Indicators (October 2013)

- Leading Indicators Month/Month +0.2%. Previous was +0.9%.

This is a rehash of previously announced data. It is supposed to tell what the economy will be doing 90 days from now.

 

Housing Starts (October 2013)

The Census Bureau announced that Housing Starts data is not available for October because of the shutdown.

- Permits (in units) were 1,034,000 seasonally adjusted, annualized.  Previous was 918,000.

The actual number of Permits in October was 89,900.  53,999 were for single-family and 33,400 were for apartment building units (5 units or more.) The last time 5+ units were higher was in June 2008.  We are become more a country of renters that owners.

FHFA House Price Index  (September 2013)

- Home Price Index month/month +0.3%. Previous revised to +0.4%. - Year/Year +8.5%.

S&P Case-Shiller HPI (September 2013)

- 20-city, Seasonally Adjusted Month/Month +1.0%. Previous was +0.9%.

- 20-city, Not Seasonally Adjusted Month/Month +0.7%. Previous was +0.7%

- 20-city, Not Seasonally Adjusted Year/Year +13.3%. Previous was +12.8%.

This data shows strong demand.

Looking at the limited Starts/Permits data and the sales data what we could be seeing is a housing market where fewer people can purchase rather than rent but one in which prices are increasing for lack of sufficient supply.  There is still not the broad confidence in the economy necessary to give Homebuilders the incentive to take the risks involved with starting projects.

 ICSC-Goldman Store Sales (week ended 11/23/2013)

- Store Sales - Week/Week +2.6%. Previous was +0.1%

- Store Sales - Year/Year +2.1%. Previous was 2.8%.

Redbook Store Sales (week ended 11/23/2013)

- Store Sales - Year/Year +3.8%. Previous was +3.5%.

Chain store data as of late has been consistently inconsistent.  It is simply hard to seen any trend.

 

Consumer Confidence (November 2013)

This is the Conference Board's metric:

- Consumer Confidence 70.4.  Previous was revised to 72.4.

This is supposed to measure predisposition to spend.  Either folks were less confident because of the shutdown or this could be a prelude to a weak Christmas shopping season.  It could also be a result of uncertain costs for health care next year for those not on employee paid plans.

 Richmond Fed Manufacturing Index (November 2013)

- level change +13.  Previous was +1.

This is the strongest regional report this month.