Personal Income and Outlays  (September 2015)

- Personal Income month/month  +0.1%. Previous was +0.4%

- Consumer Spending month/month  +0.1%. Previous was +0.4%

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

- Core PCE price index month/month +0.1%. Previous was +0.1%

- PCE Price Index year/year    +0.2%. Previous was +0.3%

- Core PCE price index year/year   +1.3%. Previous was +1.3%

Income, Spending and inflation were all down despite Wednesday's FOMC statement saying "Household spending and business fixed investment have been increasing at solid rates in recent months."     

 

Employment Cost Index (3rdQ2015)

- ECI quarter/quarter +0.6%. Previous was +0.2% - ECI year/year +2.0%. Previous was +2.0%.

 

Chicago PMI  (October 2015)

- Business Barometer Index 56.2. Previous was 48.7.

This is one of the few positive regional reports we have seen lately.

 

University of Michigan Consumer Sentiment  (October 2015)

- Sentiment Index 90.0. Previous was 92.1.

This is an index which surveys 500 households asking their opinions about the economy in an attempt to infer their spending in the next 3 months.

GDP 3rdQ2015

- Real GDP quarter/quarter seasonally adjusted, annualized +1.5%. Previous was +3.9%

- GDP price index quarter/quarter seasonally adjusted, annualized  +1.2%. Previous was +2.1%.

GDP is the broadest indicator of the U.S. economy.  This is a weak report.  Worse yet this is the state of the economy after enormous efforts in monetary policy by the Fed (3xQE and ZIRP)

and significant deficit spending. The Fed's words of yesterday that "economic activity has been expanding at a moderate pace" seem hollow.  The Fed is in a very difficult spot.  While its charter is low unemployment and low inflation - both of which have been met - the nasty fact is that +1.5% GDP growth is too slow.  The Federal government needs something closer to 4.0% growth to come close to meeting the obligations imposed by the National Deficit and the future obligations of Medicare and Social Security.  Also, while we may have low unemployment we have low Labor Participation Rate.

This reminds me of a rubber stamp the nuns used to put on any work they did not like.  It read "Must Do Better."

A detailed analysis of GDP by Rick Davis of Consumer Metrics Institute will be in my newsletter of tomorrow.

 

 

Initial Jobless Claims (week ended 10/24/2015)

- New Claims seasonally adjusted 260,000. Previous was 259,000

- New Claims, unadjusted, totaled 245,153 an increase of 12,433 from previous - 4-week Average  259,250.  Previous was 263,250.

While the is good it misses the fact that the majority of the dynamics of the jobs market do not involve layoffs of workers eligible for unemployment.

 

Pending Home Sales Index  (September 2015)

- Pending Home Sales Index - Level 106.8. Previous was 109.3

- Pending Home Sales Index month/month change -2.3%. Previous was -1.4%.

Home Sales are declining. Why?  Flat economy, tougher mortgage qualifying, higher prices, student loan debt, lack of confidence in income stability - take your pick.

MBA Mortgage Applications  (week ended 10/23/2015)

- Purchase Index Week/Week -3.0%. Previous weeks were +16.0%, -34.0%, +27.0%, -6.0%, +9.0%, -4.0%, -1.0%, +4.0%, +2.0%, -1.0%, -4.0%, +3.0%, and +0.8%.

- Refinance Index Week/Week -4.0%. Previous weeks were +9.0%, -23.0%, +24.0%, -8.0%, +18.0%, -9.0%, -10.0%, +17.0%, -1.0%, +7.0%, +3.0%, and +6.0%.

- Composite Index Week/Week  -3.5%. Previous weeks were +11.8%, -27.6%, +25.5%, -6.7%, +13.9%, -7.0%, -6.2%, +11.3%, +0.2%, +3.6%, -0.1%, and +0.8%.

With the effects of the TRID disclosure rules 3 weeks in the past for this data it is perhaps more meaningful as leading indicator of Home Sales. Nonetheless these new disclosures will in

all likelihood will negatively affect Existing and New Home Sales in November and December.  The timeline will be stretched as the delays induced by the new rules transpire.

 

 

Goods Trade Deficit (September 2015)

- Deficit   $58.6 billion.  Previous was $67.2 billion.

This is a new advanced report from The Census Bureau.  This is not the traditional Trade Deficit from BEA.

 

 

Durable Goods Orders (September 201)

- New Orders month/month  -1.2%. Previous was  -3.0%

- New Orders year/year -3.0%. Previous was -3.3%

- Ex-transportation month/month -0.4%. Previous was -0.9%

- Ex-transportation year/year -5.3 %. Previous was -4.8% 

- Core capital goods month/month -0.3%. Previous was  -1.6%

- Core capital goods year/year -7.3%. Previous was -6.6%

Durable Goods are about manufacturing at this is a picture of a continuing weak manufacturing sector combined with slowing growth elsewhere. 

 

Redbook Chain Store Sales (week ended 10/24/2015)

- Store Sales year/year +1.5%. Previous was +1.3%

 

S&P Case-Shiller Home Price Index (August 2015)

- 20-city, seasonally adjusted month/month +0.1%. Previous was -0.2%

- 20-city, not seasonally adjusted month/month  +0.4%. Previous was +0.6%

- 20-city, not seasonally adjusted year/year  +5.1%. Previous was +4.9%

I don't believe that anything can be read into this mixed data.  Also this is but a small segment of the total U.S. Housing Market. 

 

 

PMI Services Flash (October 2015)

- Level  54.4. Previous was 55.6.

Still growing but at a slower pace. 

 

Consumer Confidence  (October 2015)

- Consumer Confidence  97.6. Previous was 102.6.

This is The Conference Board's metric.  I believe that this index has been unreasonably high.  Survey indices are supposed to be leading indicators of Consumer Spending.

 

 

Richmond Federal Reserve Manufacturing Index (October 2015)

- Level -1.  Previous was -5.

Yet another indicator of a weakening manufacturing sector.

 

State Street Investor Confidence Index  (October 2015)

- State Street Investor Confidence Index  114.3.  Previous was 116.6.

This measures, more or less, how much risk investors regard their portfolio as possessing.  

New Home Sales (September 2015)

- New Home Sales (seasonally adjusted, annualized) 468,000. Previous was 529,000.

This is down 11.5% from August and up 2.0% from September 2014. Sales were down in all 4 regions most notably in the Northeast where sales were -61.8% month/month.

This is weaker than expected. New Home Sales are important because homebuilding supports many jobs.  The long term picture of New Home Sales is cloudy.  Some of the clouds are tougher mortgage lending standards, student debt which makes it more difficult for Millennials to qualify, and general uncertainty about the economy. 

It should also be noted that the new TRID disclosures will have the effect of slowing things down probably until the end of this year.  New Home Sales measures ratified deals not actual closings.

 

 

 

Dallas Federal Reserve Manufacturing Survey (October 2015)

- General Activity Index  -12.7. Previous was -9.5.

The Dallas Fed conducts this monthly survey of manufacturers in Texas regarding their operations in the Lone Star State.  Texas continues to be hit by the decline in operation oil rigs.

 

 

PMI Manufacturing Index Flash  (October 2015)

- Level  54.0. Previous was 53.

Most supply side indices have been weaker lately.  This survey index is an exception. 

I do not usually comment here about equities but yesterday strong reports from Microsoft, Google, and Amazon should result in a significant improvement in equity prices today.  In the past an automatic loss in Treasury prices resulting in higher yields would have resulted.

It is interesting that we pay so much attention to the fundamentals of manufacturing when domestic manufacturing is no longer the economic force it was.

Initial Jobless Claims (week ended 10/17/2015)

- Initial Claims seasonally adjusted  259,000. Previous was 256,000

- Initial Claims totaled 232,883 a decrease of 23,567  from  previous

- 4-week Moving Average  263,250. Previous was 265,250

Initial Jobless Claims remain low which the BLS Employment Situation Report shows very restrained jobs growth.  This serves as a reminder that Jobless Claims are only a small portion of the dynamics of the jobs market.

 

Chicago Federal Reserve National Activity Index  (September 2015)

- Level -0.37. Previous was -0.39

- 3 Month Moving Average    -0.09. Previous was +0.01

This is made up of 85 national economic indicators. The negative reading of this index does not mean a contracting economy.  It means an economy with growth below trend.

 

FHFA House Price Index (August 2015)

- month/month +0.3%. Previous was +0.5%

- year/year   +5.5%. Previous was +5.8%

I see slowing price growth as being a positive.  We are headed to a point where too few people can afford to purchase a home.

 

 

Existing Home Sales  (September 2015)

- Existing Home Sales seasonally adjusted, annualized   5,550,000. Previous was 5,300,000

- Existing Home Sales month/month   +4.7%. Previous was -5.0%

- Existing Home Sales year/year     +8.8%. Previous was +6.2%

The increase in Sales in September followed a weak August.  The longer term trend remains upward for Existing Home Sales which are buoyed by Single-Family Housing Starts which are still low.

 

 

Leading Indicators  (September 2015)

- Leading Indicators month/month  -0.2%. Previous was +0.0%.

LEI is a composite index of 10 leading indicators. I don't see this index as being particularly useful lately.  Part of the problem is that monetary policy  has had little effect on the economy.

MBA Mortgage Applications  (week ended 10/16/2015)

- Purchase Index Week/Week +16.0%. Previous weeks were -34.0%, +27.0%, -6.0%, +9.0%, -4.0%, -1.0%, +4.0%, +2.0%, -1.0%, -4.0%, +3.0%, +0.8%, and -0.1% .

- Refinance Index Week/Week +9.0%. Previous weeks were -23.0%, +24.0%, -8.0%, +18.0%, -9.0%, -10.0%, +17.0%, -1.0%, +7.0%, +3.0%, +6.0%, and +2.0%.

- Composite Index Week/Week  +11.8%. Previous weeks were -27.6%, +25.5%, -6.7%, +13.9%, -7.0%, -6.2%, +11.3%, +0.2%, +3.6%, -0.1%, +0.8%, and -1.9%.

This data and the data for the 2 previous weeks offer no insight into what is really happening with mortgage applications as they relate to real estate transactions.  These wild fluctuations are the product of the new TRID disclosures which caused some folks to apply early.

These new disclosures will in all likelihood will negatively affect Existing and New Home Sales in November and December.

Housing Starts (September 2015)

- Starts seasonally adjusted, annualized  1,206,000. Previous was 1,132,000

- Permits seasonally adjusted, annualized  1,103,000. Previous was 1,161,000

While the gain is good because it provides needed housing it is less encouraging for folks in the mortgage business because almost all of the gain is in multi-family.  Construction of SFR was up 0.4% month-on-month.  Building Permits for SFR was down 0.3%. This could  be due to the fact that jobs and people are moving into cities  where multi-family construction is more prevalent.  It may also be the case that fewer people can afford homes but that is something which needs to be looked at on a longer scale than month-to-month.

 

Redbook Chain Store Sales (week ended 10/17/2015)

- Chain Store Sales year/year  +1.3%. Previous was +1.1%.

Chain Store sales are soft.  This reflects, in part, a trend to online shopping.  Some Chain Stores are facing serious issues as witnessed by Wal-Mart's report of last week.  It should also be noted that this particular piece of data has a lot of weekly variation due to thing such as holidays, sales, and weather.

Housing Market Index (October 2015)

- Housing Market Index  64. Previous was 61.

This survey index is produced by The National Association of Home Builders and blends views about the housing market and the economy in general. The data considered is present sales of new homes, sale of new homes expected in the next six months, and traffic of prospective buyers in new homes. It does not account for Existing Home Sales. 

This week has other housing data: Housing Starts Tuesday, Existing Home Sales and FHFA House Price Index Thursday, and the weekly MBA Mortgage Applications Wednesday.