GDP (2ndQ 2020)

- Real GDP quarter/quarter seasonally adjusted, annualized rate 32.9%. Previous was -5.0%
- Real Consumer Spending - quarter/quarter seasonally adjusted, annualized rate -34.6%. Previous was -6.8%

The stay at home orders created some bizarre statistics.

Current-dollar personal income increased $1.39 trillion in the second quarter, compared with an increase of $193.4 billion in the first quarter.

Disposable personal income increased $1.53 trillion, or 42.1 percent, in the second quarter, compared with an increase of $157.8 billion, or 3.9 percent, in the first quarter. Real disposable personal income increased 44.9 percent, compared with an increase of 2.6 percent.

Personal outlays decreased $1.57 trillion, after decreasing $232.5 billion. The decrease in outlays was led by a decrease in PCE for services.

Personal saving was $4.69 trillion in the second quarter, compared with $1.59 trillion in the first quarter. The personal saving rate—personal saving as a percentage of disposable personal income—was 25.7 percent in the second quarter, compared with 9.5 percent in the first quarter.

Declining GDP is hardly a domestic issue. According to the World Bank, 92.9 percent of the world’s economies are contracting. The previous high was 83.8 percent during the Great Depression. A synchronous recession of this scale has never happened before.

A detailed look at the report will be in my weekly RateWatch newsletter.

Source: Bureau of Economic Analysis Details: https://www.bea.gov/data/gdp/gross-domestic-product

Initial Jobless Claims (week ended 7/25/2020)

- New Claims seasonally adjusted 1,434,000. Previous was 1,422,000
- New Claims unadjusted, totaled 1,205,871 in a decrease of 171,054 from previous
- 4-week Moving seasonally adjusted 1,369,000. Previous was 1,362,000

To some extent the seasonally adjustments are less useful than usual because they do not account for the fact that a pandemic is the driving force.

Source: Labor Department Details: https://www.dol.gov/ui/data.pdf

MBA Mortgage Applications (week ended 7/24/2020)

- Purchase Index week/week -2.0% . Previous weeks were +2.0%, -6.0%, +5.0%, -1.0%, -3.0%, +4.0%, +5.0%, +5.0%, +9.0%, +6.0%. +11.0%, +6.0%, +1.0%, and +12.0%

- Refinance Index week/week -0.4%. Previous weeks were +5.0, +12.0%, +0.4%, -2.0%, -12.0%, +10.0%, +11.0%, -9.0%, -0.2%, -6.0%, -3.0%, -2.0%, -7.0%, -1.0%, +10.0%, and -19.0%

- Composite Index week/week -0.8%. Previous weeks were 4.1%, +5.1%, +2.2%, -1.8%, -8.7%, +8.0%, +9.3%. -3.9%, +2.7%, -2.6%, +0.3%, +0.1%, -3.3%, -0.3%, and +7.3%

Purchase applications were +21.0%  year/year. Refi applications were +121.0%  year/year.

 

Source:  Mortgage Bankers Association  Details:  https://www.mba.org/2020-press-releases/july/mortgage-applications-decrease-in-latest-mba-weekly-survey-x271265

 

Goods Trade Deficit (June 2020)

- Deficit        $70.6 billion.  Previous was $75.3 billion

- Exports % change    13.9%.  Previous was 5.8%

- Imports % change    -4.8%.  Previous was -0.6%

Source:  Census Bureau   Details: https://www.census.gov/econ/indicators/advance_report.pdf

 

Retail Inventories (June 2020)

- month/month    -2.6%.  Previous was -6.2%

This is a component of 2ndQ GDP.

Source:  Census  Details: https://www.census.gov/retail/index.html

 

Wholesale Inventories (June 2020)

- month/month -2.0%    .  Previous was -1.2%

Source:  Census  Details: https://www.census.gov/wholesale/index.html

 

Pending Home Sales Index  (June 2020)

- - Pending Home Sales Index month/month +16.6% . Previous was +44.3%.

Pending Home Sales are those where there is a contract signed by both buyers and sellers.

About 95% of Pending Sales close. Most common causes of Failures are: property inspection report causes buyers to back out and appraisal does not support purchase price.

 

Source:  National Association of Realtors  Details: https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales 

Redbook Chain Store Sales (week ended 7/25/2019)

- Same Store Sales year/year -7.2%. Previous was -7.5%.

- Same Store Sales month/month +1.1%. Previous was +1.9%.

Year/year is all about COVID. The month/month data shows that store re-openings have helped Chain Store Sales. It is not clear how long this will last as concern has heightened recently and month/month gains were lower.

Source: Redbook Research Inc.

 

Case-Shiller House Price Index (May 2020)

- 20-city, seasonally adjusted month/month 0.0%. Previous was 0.3%
- 20-city, not seasonally adjusted month/month 0.4%. Previous was 0.8%
- 20-city, not seasonally adjusted year/year 3.7%. Previous was 3.9%

Source: Core Logic

Flattened home prices are likely the result of COVID angst which, if nothing else, discourages buying a home in an area with high numbers of infections.

 

Consumer Confidence (July 2020)

- Consumer Confidence 92.6. Previous was 98.3

This is the metric from the Conference Board and is, in normal times, supposed to forecast Consumer Spending in the next 3-6 months. We are not in normal times.

Source: Conference Board

Durable Goods Orders (June 2020)

- New Orders month/month 7.3%. Previous was 15.1%
- Ex-transportation month/month 3.3%. Previous was 3.6%
- Core capital goods month/month 3.3%. Previous was 1.6%

Source: Census Bureau Details: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

Initial Jobless Claims (week ended 7/18/2020)

- Initial Claims seasonally adjusted 1,416,000. Previous was 1,307,000
- Initial Claims unadjusted, totaled 1,370,947 a decrease of 141,816 from previous
- 4-week Moving Average seasonally adjusted 1,360,000 . Previous was 1,377,000

One important issue being discussed in Congress is extension of the extra $600/week UI payment under the CARES act. Some folks are making
more from UI with the added $600 which does not encourage return to work.

The jobs market and, consequently, the economy are hurting big time.

Source: Labor Department Details:https://www.dol.gov/ui/data.pdf

 

Leading Indicators (June 2020)

- Leading Indicators month/month 2.0%. Previous was 3.2%

The leading economic indicators is a composite of 10 forward-looking components which should give a picture of GDP growth 6 months into the future. Under the present circumstances this may have less value than usual.

Source: Conference Board

Chicago Federal Reserve National Activity Index (June 2020)

- Level 4.11. Previous was 2.61
- 3 Month Moving Average -3.49. Previous was -6.36

This is a weighted average of 85 indicators of growth in national economic activity.

Source: Chicago Fed Details: file:///D:/Dick/Downloads/cfnai-june2020-pdf.pdf

Redbook Chain Store Sales (week ended 7/18/2019)

- Same Store Sales year/year -7.5%. Previous was -5.5%.
- Same Store Sales month/month +1.9%. Previous was +3.0%.

Yer/year is all about COVID. The month/month data shows that store re-openings have helped Chain Store Sales. It is not clear how long this will last as concern has heightened recently.

Source: Redbook Research Inc.

MBA Mortgage Applications (week ended 7/10/2020)

- Purchase Index week/week -6.0%. Previous weeks were +5.0%, -1.0%, -3.0%, +4.0%, +5.0%, +5.0%, +9.0%, +6.0%. +11.0%, +6.0%, +1.0%, +12.0%, -2.0%, and -2.0%
- Refinance Index Week/Week +12.0%. Previous weeks were +0.4%, -2.0%, -12.0%, +10.0%, +11.0%, -9.0%, -0.2%, -6.0%, -3.0%, -2.0%, -7.0%, -1.0%, +10.0%, -19.0%, +26.0%, and -34.0%
- Composite Index Week/Week +5.1$. Previous weeks were +2.2%, -1.8%, -8.7%, +8.0%, +9.3%. -3.9%, +2.7%, -2.6%, +0.3%, +0.1%, -3.3%, -0.3%, +7.3%, -17.9%, and +15.3%

This data is seasonally adjusted but seasonal adjustments are making for strange numbers. Purchase applications were +5.0% week/week and +16% year/year. the problem I have is that we are
usual seasonal adjustments based on what has happened in the past. What's happening at present is affected by the pandemic rendering reading of this data less useful than usual.

Source: Mortgage Bankers Association Details: https://www.mba.org/2020-press-releases/july/mortgage-applications-increase-in-latest-mba-weekly-survey-x271130

Import and Export Prices (June 2020)

- Import Prices month/month 1.4%. Previous was 0.8%
- Export Prices month/month 1.4%. Previous was 0.4%
- Import Prices year/year -3.8%. Previous was -6.2%
- Export Prices year/year -4.4%. Previous was 6.2%

Source: BLS Details: https://www.bls.gov/news.release/pdf/ximpim.pdf

 

Industrial Production (June 2020)

- Production month/month 5.4%. Previous was 1.4%
- Manufacturing month/month 7.2%. Previous was 3.8%
- Capacity Utilization Rate 68.6%. Previous was 64.8%

Industrial Production is 10.9% below its pre-pandemic February level. The current wave of reclosings is not going to help.

Source: Federal Reserve Details: https://www.federalreserve.gov/releases/g17/current/default.htm

CPI (June 2020)

- CPI month/month 0.6%. Previous was -0.1%
- CPI year/year 0.6%. Previous was +0.1%
- CPI less food & energy month/month 0.2%. Previous was -0.1%
- CPI less food & energy year/year 1.2%. Previous was +1.2%

A +0.6% change in CPI would normally hammer Treasury yields and mortgage rates but this +0.6% comes after 3 consecutive months of decline.

Source: Bureau of Labor Statistics Details: https://www.bls.gov/cpi/

NFIB Small Business Optimism Index (June 2020)

- level 100.6. Previous was 94.4

This is a survey index. These folks are or at least were looking to reopen. In normal times Small Business Optimism is a leading indicator of jobs growth.

Source: National Federation of Independent Business (NFIB) Details: https://www.nfib.com/surveys/small-business-economic-trends/

Redbook Chain Store Sales (week ended 7/11/2019)

- Same Store Sales year/year -5.5%. Previous was -6.9%.
- Same Store Sales month/month +3.0%. Previous was -0.6%.

The month/month data shows that store re-openings have helped Chain Store Sales. It is not clear how long this will last.

Source: Redbook Research Inc.

PPI (Wholesale Inflation) June 2020

- PPI-FD month/month -0.2%. Previous was +0.4%
- PPI-FD year/year -0.8%. Previous was -0.8%
- PPI-FD less food & energy month/month -0.3%. Previous was -0.1%
- PPI-FD less food & energy year/year 0.1%. Previous was +0.3%
- PPI-FD less food, energy & trade services month/month 0.3%. Previous was +0.1%
- PPI-FD less food, energy & trade services year/year -0.1%. Previous was -0.4%

Source: BLS Details: https://www.bls.gov/ppi/

Initial Jobless Claims (week ended 7/4/2020)

- New Claims seasonally adjusted 1,314,000. Previous was 1,413,000
- New Claims unadjusted, totaled 1,399,699 a decrease of 31,644 from previous
- 4-week Moving Average 1,437,000. Previous was 1,500,000
- Total seasonally adjusted number of people receiving regular UI was 18,062,000 -698,000 from previous.
- The number of people receiving Pandemic Unemployment Assistance was 14,363,143 up +1,509,659 from previous

While still terrible this is less terrible than previous.

Source: Labor Department Details: https://www.dol.gov/ui/data.pdf

 

Wholesale Trade (May 2020)

- Inventories month/month 5.4%. Previous was +0.3%

This is a component of 2ndQ GDP.

Source: Census Details: https://www.census.gov/wholesale/pdf/mwts/currentwhl.pdf