by Calculated Risk on 4/16/2018 08:38:00 AM

On a monthly basis, retail sales increased 0.6 percent from February to March (seasonally adjusted), and sales were up 4.5 percent from March 2017.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for March 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $494.6 billion, an increase of 0.6 percent from the previous month, and 4.5 percent above March 2017. ... The January 2018 to February 2018 percent change was unrevised from down 0.1 percent.

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline were up 0.6% in March.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 4.2% on a YoY basis.

The increase in March was above expectations, however sales in January and February were revised down slightly.

by Calculated Risk on 4/15/2018 07:27:00 PM

Weekend:
• Schedule for Week of Apr 15, 2018

Monday:
• At 8:30 AM ET, Retail sales for March will be released.  The consensus is for a 0.4% increase in retail sales.

• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for April. The consensus is for a reading of 18.2, down from 22.5.

• At 10:00 AM, The April NAHB homebuilder survey. The consensus is for a reading of  70, unchanged from 70 in March. Any number above 50 indicates that more builders view sales conditions as good than poor.

• Also at 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for February.  The consensus is for a 0.6% increase in inventories.

From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 are up 18, and DOW futures are up 185 (fair value).

Oil prices were up over the last week with WTI futures at $67.14 per barrel and Brent at $72.22 per barrel.  A year ago, WTI was at $53, and Brent was at $55 - so oil prices are up about 30% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.71 per gallon. A year ago prices were at $2.40 per gallon - so gasoline prices are up 31 cents per gallon year-over-year.

by Calculated Risk on 4/15/2018 11:57:00 AM

By request, a couple more graphs based on the February Personal Income and Outlays report.

The first graph is for the personal saving rate.

Click on graph for larger image.

The saving rate increased to 3.4% in February.

Personal saving was $497.4 billion in February and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.4 percent.

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the February Personal Income report.

After increasing sharply during the recession, and remaining around 6% for several years, the personal saving rate has decreased over the last couple of years.

The second graph shows real personal income less transfer payments in 2009 dollars. This was slow to recover following the recession, but is now increasing steadily.

From the BEA:

Personal current transfer receipts: Consists of income payments to persons for which no current services are performed and net insurance settlements.

Examples of transfer payments are Social Security (retirement and disability), Medicare, unemployment insurance and other social programs.

by Calculated Risk on 4/14/2018 08:11:00 AM

The key economic reports this week are March Housing Starts and Retail Sales.

For manufacturing, March industrial production, and the April New York, and Philly Fed manufacturing surveys, will be released this week.

----- Monday, Apr 16th -----
8:30 AM ET: Retail sales for March will be released.  The consensus is for a 0.4% increase in retail sales.

This graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 3.9% on a YoY basis in February.

8:30 AM ET: The New York Fed Empire State manufacturing survey for April. The consensus is for a reading of 18.2, down from 22.5.

10:00 AM: The April NAHB homebuilder survey. The consensus is for a reading of  70, unchanged from 70 in March. Any number above 50 indicates that more builders view sales conditions as good than poor.

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for February.  The consensus is for a 0.6% increase in inventories.

----- Tuesday, Apr 17th -----

8:30 AM: Housing Starts for March.

This graph shows single and total housing starts since 1968.

The consensus is for 1.269 million SAAR, up from 1.236 million SAAR in February.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for March.

This graph shows industrial production since 1967.

The consensus is for a 0.4% increase in Industrial Production, and for Capacity Utilization to decrease to 78.0%.

----- Wednesday, Apr 18th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

During the day: The AIA's Architecture Billings Index for March (a leading indicator for commercial real estate).

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, Apr 19th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 226 thousand initial claims, down from 233 thousand the previous week.

8:30 AM: the Philly Fed manufacturing survey for April. The consensus is for a reading of 20.1, down from 22.3.

----- Friday, Apr 20th -----
10:00 AM: State Employment and Unemployment (Monthly) for March 2018

by Calculated Risk on 4/13/2018 08:42:00 PM

Note: The Chinese New Year boosted inbound traffic in February, and slowed inbound traffic in March this year.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was down 1.0% compared to the rolling 12 months ending in February.   Outbound traffic was down 0.2% compared to the rolling 12 months ending in February.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.

Trade has been strong - especially inbound - and setting record volumes most months recently.

In general imports have been increasing, and exports are mostly moving sideways recently.

by Calculated Risk on 4/13/2018 04:02:00 PM

A few comments from Steven Kopits of Princeton Energy Advisors LLC on Apr 13, 2018:

• Total US oil rigs were up, +7 to 815

• Horizontal oil rigs were flat at 717
...
• Not a lot of enthusiasm for adding horizontal oil rigs, high oil prices notwithstanding.

• Last week’s impression remains: Shale production growth is going to underperform expectations.

• Global oil demand growth has been running hot; +2.0 mbpd / year since November (EIA), explaining high oil prices and draws notwithstanding 1.6 mbpd US crude + ngl production growth over the last year.

• The Brent spread is above $5 / barrel – quite bullish

Click on graph for larger image.

CR note: This graph shows the US horizontal rig count by basin.

Graph and comments Courtesy of Steven Kopits of Princeton Energy Advisors LLC.

by Calculated Risk on 4/13/2018 03:29:00 PM

Here are few Q1 GDP forecast.

From Merrill Lynch:

We continue to track 1.8% for 1Q GDP. [April 13 estimate].

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 2.0 percent on April 10, down from 2.3 percent on April 5. [April 10 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 2.8% for 2018:Q1 and 2.9% for 2018:Q2. [April 13 estimate]

CR Note: It looks like another quarter around 2% or so, although there might still be some residual seasonality in the first quarter.

by Calculated Risk on 4/13/2018 12:08:00 PM

According to NBER, the four longest expansions in U.S. history are:

1) From a trough in March 1991 to a peak in March 2001 (120 months).

2 Tied) From a trough in February 1961 to a peak in December 1969 (106 months).

2 Tied) From a trough in June 2009 to today, April 2018 (106 months and counting).

4) From a trough in November 1982 to a peak in July 1990 (92 months).

So the current expansion is currently tied for the second longest, and it seems very likely that the current expansion will surpass the '90s expansion in the Summer of 2019.

As I noted last year in Is a Recession Imminent? (one of the five questions I'm frequently asked)

Expansions don't die of old age! There is a very good chance this will become the longest expansion in history.

A key reason the current expansion has been so long is that housing didn't contribute for the first few years of the expansion.  Also the housing recovery was sluggish for a few more years after the bottom in 2011.  This was because of the huge overhang of foreclosed properties coming on the market. Single family housing starts and new home sales both bottomed in 2011 - so this is just the seventh year of expansion - and I expect further increases in starts and sales over the next couple of years.

Recently the story has changed, but I still think the current expansion will end up being the longest in U.S. history.

Note: Here are five questions that people ask me all the time and my answers late last year.
1. Are house prices in a bubble?
2. Is a recession imminent (within the next 12 months)?
3. Is the stock market a bubble?
4. Can investors use macro analysis?
5. Will Mr. Trump have a negative impact on the economy?

by Calculated Risk on 4/13/2018 10:07:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 6.1 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.5 million and 5.2 million, respectively. Within separations, the quits rate was unchanged at 2.2 percent and the layoffs and discharges rate was little changed at 1.1 percent. ...

The number of quits was little changed at 3.2 million in February. The quits rate was 2.2 percent. The number of quits was little changed for total private and for government. Quits decreased in other services (-41,000). The number of quits was little changed in all four regions.
emphasis added

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

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for February, the most recent employment report was for March.

Click on graph for larger image.


Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings decreased in February to 6.052 million from 6.228 in January.

The number of job openings (yellow) are up 7.7% year-over-year.

Quits are up 6.3% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Job openings are near the highest level since this series started, and quits are increasing year-over-year. This was a solid report.

by Calculated Risk on 4/12/2018 09:12:00 PM

Friday:
• At 10:00 AM ET, Job Openings and Labor Turnover Survey for February from the BLS.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for April). The consensus is for a reading of 100.8, down from 101.4.

From Matthew Graham at Mortgage News Daily: Mortgage Rates Bounce Back

A day after hitting the lowest levels in more than 2 months, mortgage rates bounced back up today. The good news is that they didn't land too far from yesterday's levels in the grand scheme of things, and are still technically closer to the bottom of their March/April range. [30YR FIXED - 4.5%]
emphasis added

Here is a table from Mortgage News Daily:

Home Loan Rates

View More Refinance Rates