by Calculated Risk on 8/18/2019 08:24:00 PM

Weekend:
• Schedule for Week of August 18, 2019

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 are up 15 and DOW futures are up 150 (fair value).

Oil prices were up over the last week with WTI futures at $55.23 per barrel and Brent at $59.07 barrel.  A year ago, WTI was at $66, and Brent was at $71 - so oil prices are down about 15% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.60 per gallon. A year ago prices were at $2.83 per gallon, so gasoline prices are down 23 cents year-over-year.

by Calculated Risk on 8/18/2019 08:11:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 10 August

The U.S. hotel industry reported mostly negative year-over-year results in the three key performance metrics during the week of 4-10 August 2019, according to data from STR.

In comparison with the week of 5-11 August 2018, the industry recorded the following:

• Occupancy: -1.4% to 74.1%
• Average daily rate (ADR): +0.4% to US$133.36
• Revenue per available room (RevPAR): -1.0% at US$98.88
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

Occupancy has been solid in 2019, close to-date compared to the previous 4 years - but has been a little soft YoY in recent weeks.

Seasonally, the occupancy rate will now start to decline as the peak summer travel season ends.

Data Source: STR, Courtesy of HotelNewsNow.com

by Calculated Risk on 8/17/2019 08:11:00 AM

The key reports this week are July New and Existing Home Sales.

Fed Chair Jerome Powell speaks on Friday at the Jackson Hole Symposium.

Also this week, the BLS will release the preliminary employment benchmark revision, and the CBO will release updated budget and economic projections

----- Monday, Aug 19th -----
No major economic releases scheduled.

----- Tuesday, Aug 20th -----
No major economic releases scheduled.

----- Wednesday, Aug 21st -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Existing Home Sales for July from the National Association of Realtors (NAR). The consensus is for 5.39 million SAAR, up from 5.27 million last month.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report 5.40 million SAAR.

10:00 AM: the Bureau of Labor Statistics (BLS) will release the preliminary estimate of the upcoming annual benchmark revision.

11:00 AM: CBO to Release Updated Budget and Economic Projections

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

2:00 PM: FOMC Minutes, Meeting of July 30-31, 2019

----- Thursday, Aug 22nd -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 215 thousand initial claims, down from 220 thousand last week.

11:00 AM: the Kansas City Fed manufacturing survey for August.

----- Friday, Aug 23rd -----
10:00 AM: New Home Sales for July from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 645 thousand SAAR, down from 646 thousand in June.

10:00 AM: Speech, Fed Chair Jerome Powell, Challenges for Monetary Policy, At the Jackson Hole Economic Policy Symposium: Challenges for Monetary Policy, Jackson Hole, Wyo.

by Calculated Risk on 8/16/2019 03:35:00 PM

From housing economist Tom Lawler: Early Read on Existing Home Sales in July

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.40 million in July, up 2.5% from June’s preliminary estimate and up 0.2% from last July’s seasonally adjusted pace.

On the inventory front, local realtor/MLS data, as well as data from other inventory trackers, suggest that the inventory of existing homes for sale at the end of June should be about 1.6% lower than last July.

Finally, local realtor/MLS data suggest that the median US existing single-family home sales price last month was up by about 4.7% from last July.

CR Note: Existing home sales for July are scheduled to be released on Wednesday, August 21st. The early consensus is the NAR will report sales of 5.40 million SAAR (same as Lawler).

by Calculated Risk on 8/16/2019 02:26:00 PM

From SacRealtor.org: July sales increase, price unchanged month-to-month

July wrapped up with 1,693 total sales, a 10.9% increase from the 1,527 sales of June. Compared to the same month last year (1,598), the current figure is up 5.9%.
...
The Active Listing Inventory increased 2.7% from 2,362 to 2,425 units. The Months of Inventory decreased from 1.5 to 1.4 Months. This figure represents the amount of time (in months) it would take for the current rate of sales to deplete the total active listing inventory. [Note: Compared to July 2018, inventory is down 15.7%] .
...
The Median DOM (days on market) increased from 10 to 11. The Average DOM increased from 22 to 23. “Days on market” represents the days between the initial listing of the home as “active” and the day it goes “pending.” Of the 1,693 sales this month, 77.6% (1,313) were on the market for 30 days or less and 91.5% (1,548) were on the market for 60 days or less.
emphasis added

1) Overall sales increased to 1,693 in July, up from 1,598 in July 2018. Sales were up 10.9% from June 2019 (previous month), and up 5.9% from July 2018.

2) Active inventory was at 2,425, down from 2,875 in July 2018. That is down 15.7% year-over-year.  This is the third consecutive YoY decline following 20 months of YoY increases in inventory.

This is another market that picked up in July, and with the decline in mortgage rates in August, we will probably see a further pickup in coming months.

by Calculated Risk on 8/16/2019 11:21:00 AM

From Merrill Lynch:

The data boosted our 3Q GDP tracking estimate by 0.4pp to 2.1% qoq saar. 2Q was unchanged at 1.8%. [Aug 15 estimate]
emphasis added

From Goldman Sachs:

we left our Q3 GDP tracking estimate unchanged on a rounded basis at +2.1% (qoq ar). [Aug 16 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 1.8% for 2019:Q3. [Aug 16 estimate].

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2019 is 2.2 percent on August 16, unchanged from August 15 after rounding. After this morning's new residential construction report from the U.S. Census Bureau, the nowcast of third-quarter real residential investment growth increased from -1.2 percent to 0.7 percent. [Aug 16 estimate]

CR Note: These early estimates suggest real GDP growth will be around 2% annualized in Q3.

by Calculated Risk on 8/16/2019 10:45:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Unemployment rates were lower in July in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Three states had jobless rate decreases from a year earlier, 1 state had an increase, and 46 states and the District had little or no change. The national unemployment rate, 3.7 percent, was unchanged over the month and little changed from July 2018.
...
Vermont had the lowest unemployment rate in July, 2.1 percent. The rates in Alabama (3.3 percent), Arkansas (3.4 percent), Maine (3.0 percent), and New Jersey (3.3 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.3 percent.
emphasis added

Click on graph for larger image.

This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976.

At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red).

Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue).  Note that Alaska is at the series low (since 1976).  Two states and the D.C. have unemployment rates above 5%; Alaska and Mississippi.

A total of nine states are at a series low: Alabama, Alaska, Arkansas, California, Maine, New Jersey, Oregon, Texas and Vermont.

by Calculated Risk on 8/16/2019 08:56:00 AM

Earlier: Housing Starts decline to 1.191 Million Annual Rate in July

Total housing starts in July were below expectations, and starts for May and June were revised down.  The weakness was in the volatile multi-family sector.

The housing starts report showed starts were down 4.0% in July compared to June, and starts were up 0.6% year-over-year compared to July 2018.

Single family starts were up 1.9% year-over-year, and multi-family starts were down 4.7% YoY.

This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red).

Click on graph for larger image.

Starts were up 0.6% in July compared to July 2018.

Year-to-date, starts are down 3.1% compared to the same period in 2018.

Last year, in 2018, starts were strong early in the year, and then fell off in the 2nd half - so the early comparisons this year were the most difficult.

My guess was starts would be down slightly year-over-year in 2019 compared to 2018, but nothing like the YoY declines we saw in February and March. Now it is possible starts will be up slightly in 2019 compared to 2018.

Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).

These graphs use a 12 month rolling total for NSA starts and completions.

The blue line is for multifamily starts and the red line is for multifamily completions.

The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently.  Completions (red line) had lagged behind - then completions caught up with starts.

As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR).

The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.

Note the relatively low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions.

by Calculated Risk on 8/16/2019 08:38:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,191,000. This is 4.0 percent below the revised June estimate of 1,241,000, but is 0.6 percent above the July 2018 rate of 1,184,000. Single‐family housing starts in July were at a rate of 876,000; this is 1.3 percent above the revised June figure of 865,000. The July rate for units in buildings with five units or more was 303,000.

Building Permits:
Privately‐owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,336,000. This is 8.4 percent above the revised June rate of 1,232,000 and is 1.5 percent above the July 2018 rate of 1,316,000. Single‐family authorizations in July were at a rate of 838,000; this is 1.8 percent above the revised June figure of 823,000. Authorizations of units in buildings with five units or more were at a rate of 453,000 in July.
emphasis added

Click on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years.

Multi-family starts (red, 2+ units) were down sharply in July compared to June.   Multi-family starts were down 2.8% year-over-year in July.

Multi-family is volatile month-to-month, and  has been mostly moving sideways the last several years.

Single-family starts (blue) increased in July, and were up 1.9% year-over-year.

The second graph shows total and single unit starts since 1968.

The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low).

Total housing starts in July were below expectations, and starts for May and June were revised down.   The weakness was in the multi-family sector.

I'll have more later …

by Calculated Risk on 8/15/2019 06:55:00 PM

Friday:
• At 8:30 AM ET: Housing Starts for July. The consensus is for 1.260 million SAAR, up from 1.253 million SAAR in June.

• At 10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for August).

• At 10:00 AM: State Employment and Unemployment (Monthly) for July 2019