by Calculated Risk on 12/20/2019 03:03:00 PM

From the BLS: Regional and State Employment and Unemployment Summary

Unemployment rates were lower in November in 7 states, higher in 5 states, and stable in 38 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Seven states had jobless rate decreases from a year earlier, 2 states had increases, and 41 states and the District had little or no change. The national unemployment rate, 3.5 percent, was little changed over the month and from November 2018.
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Vermont had the lowest unemployment rate in November, 2.3 percent. The rates in Alabama (2.7 percent), Alaska (6.1 percent), Georgia (3.3 percent), Illinois (3.8 percent), Oregon (3.9 percent), and South Carolina (2.4 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.1 percent.
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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 a series low (since 1976).  Two states and the D.C. have unemployment rates above 5%; Alaska and Mississippi.

A total of thirteen states are at a series low: Alabama, Alaska, California, Colorado, Florida, Georgia, Illinois, Maine, Oregon, South Carolina, Texas, Utah and Washington.

by Calculated Risk on 12/20/2019 02:31:00 PM

From Merrill Lynch

We continue to track 4Q GDP growth at 1.5%. [Dec 20 estimate]
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From Goldman Sachs:

Following today’s data, we boosted our Q4 GDP tracking estimate by one tenth to +1.8% (qoq ar). [Dec 20 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 1.3% for 2019:Q4 and 1.6% for 2020:Q1. [Dec 20 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2019 is 2.1 percent on December 20, down from 2.3 percent on December 17 [Dec 20 estimate]

CR Note: These estimates suggest real GDP growth will be between 1.3% and 2.1% annualized in Q4.

by Calculated Risk on 12/20/2019 11:00:00 AM

From the Kansas City Fed: Tenth District Manufacturing Activity Decreased Further in December

The Federal Reserve Bank of Kansas City released the December Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity decreased further in December while expectations for future activity remained positive.

“Regional factory activity declined for the sixth straight month in December, driven again by weaker activity in durable goods manufacturing,” said Wilkerson. “About half of District firms said weakening in other goods-producing sectors (such as energy and agriculture) has negatively affected business in their area.”
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The month-over-month composite index was -8 in December, down from -3 in both November and October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The decrease in district manufacturing activity continued to be driven by weak activity at durable goods plants, especially from declines in: wood products, nonmetallic mineral products, primary metal, fabricated metal products, machinery, and computer and electronic products manufacturing. Most month-over-month indexes fell in December. The shipments index turned negative and the production, new orders, order backlog, and employment indexes declined further. Aside from the index for raw materials prices, only the supplier delivery time index remained slightly positive.
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Another weak regional manufacturing report.

by Calculated Risk on 12/20/2019 10:05:00 AM

The BEA released the Personal Income and Outlays report for November:

Personal income increased $101.7 billion (0.5 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $87.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $64.9 billion (0.4 percent).

Real DPI increased 0.4 percent in November, and real PCE increased 0.3 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

The November PCE price index increased 1.5 percent year-over-year and the November PCE price index, excluding food and energy, increased 1.6 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through November 2019 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was above expectations,  and the increase in PCE was at expectations.

Note that core PCE inflation was up 1.6% YoY.

Using the two-month method to estimate Q4 PCE growth, PCE was increasing at a 2.2% annual rate in Q4 2019. (using the mid-month method, PCE was increasing at 2.3%). This suggests slower PCE growth in Q4 than in Q3.

by Calculated Risk on 12/20/2019 08:35:00 AM

From the BEA: Gross Domestic Product, Third quarter 2019 (third estimate); Corporate Profits, Third quarter 2019 (revised estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the third quarter of 2019, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.0 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 2.1 percent. With the third estimate for the third quarter, upward revisions to personal consumption expenditures (PCE) and nonresidential fixed investment were offset by a downward revision to private inventory investment.
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PCE growth was revised up to 3.2% from 2.9% in the second estimate. Residential investment was revised down to 4.6% from 5.1%.

Here is a Comparison of Second and Advance Estimates.

by Calculated Risk on 12/19/2019 06:49:00 PM

Friday:
• At 8:30 AM ET, Gross Domestic Product, 3nd quarter 2018 (Third estimate). The consensus is that real GDP increased 2.1% annualized in Q3, unchanged from the second estimate of GDP.

• At 10:00 AM, Personal Income and Outlays for November. The consensus is for a 0.3% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.1%.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (Final for December). The consensus is for a reading of 99.2.

• Also at 10:00 AM, State Employment and Unemployment (Monthly) for November 2018

• At 11:00 AM, the Kansas City Fed manufacturing survey for December.

by Calculated Risk on 12/19/2019 12:24:00 PM

Earlier: NAR: Existing-Home Sales Decreased to 5.35 million in November

A few key points:

1) Existing home sales were up 2.7% year-over-year (YoY) in November. This was the fifth consecutive month with a YoY increase - following 16 consecutive months with a YoY decrease in sales

2) Inventory is still low, and was down 5.7% year-over-year (YoY) in November.

Click on graph for larger image.

3) Year-to-date sales are down about 1.1% compared to the same period in 2018.   On an annual basis, that would put sales around 5.28 million in 2019, down from 5.34 million in 2018.

Sales slumped at the end of 2018 and in January 2019 due to higher mortgage rates, the stock market selloff, and fears of an economic slowdown.

The comparisons will be easy in December of this year, and with lower mortgage rates, sales will probably finish the year mostly unchanged from 2018.

The second graph shows existing home sales Not Seasonally Adjusted (NSA).

Sales NSA in November (404,000, red column) were slightly below sales in November 2018 (406,000, NSA).   Note: There were fewer selling days in November 2019 compared to 2018.

Overall this was a solid report.

by Calculated Risk on 12/19/2019 10:10:00 AM

From the NAR: Existing-Home Sales Descend 1.7% in November

Existing-home sales fell in November, taking a small step back after October’s gains, according to the National Association of Realtors®. The Northeast and Midwest both reported growth last month, while the South and West saw sales decline.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.7% from October to a seasonally-adjusted annual rate of 5.35 million in November. However, sales are up 2.7% from a year ago (5.21 million in November 2018).
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Total housing inventory at the end of November totaled 1.64 million units, down approximately 7.3% from October and 5.7% from one year ago (1.74 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, down from 3.9 months in October and from the 4.0-month figure recorded in November 2018. Unsold inventory totals have declined for five consecutive months, constraining home sales.
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Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in November (5.35 million SAAR) were down 1.9% from last month, and were 2.7% above the November 2018 sales rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.64 million in November from 1.77 million in October.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was down 5.7% year-over-year in November compared to November 2018.

Months of supply decreased to 3.7 months in November.

This was lower than the consensus forecast.  For existing home sales, a key number is inventory - and inventory is still low. I'll have more later …

by Calculated Risk on 12/19/2019 08:42:00 AM

From the Philly Fed: Current Manufacturing Indexes Suggest Flat Growth in December

Manufacturing activity in the region was flat this month, according to results from the December Manufacturing Business Outlook Survey. The survey's broad indicator for current activity dropped to a reading near zero this month, although indicators for new orders, shipments, and employment remained at higher positive readings. The survey’s future activity indexes remained positive, suggesting continued optimism about growth for the next six months.

The diffusion index for current general activity fell 10 points this month to 0.3, its lowest reading in six months … Manufacturers continued to report expanding employment this month, although the current employment index decreased 4 points to 17.8.
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This was slightly above the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through December), and five Fed surveys are averaged (blue, through November) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through November (right axis).

These early reports suggest the ISM manufacturing index will probably be weak again in December.

by Calculated Risk on 12/19/2019 08:33:00 AM

The DOL reported:

In the week ending December 14, the advance figure for seasonally adjusted initial claims was 234,000, a decrease of 18,000 from the previous week's unrevised level of 252,000. The 4-week moving average was 225,500, an increase of 1,500 from the previous week's unrevised average of 224,000.
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The previous week was unrevised.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 225,500.

This was higher than the consensus forecast.