by Calculated Risk on 5/04/2021 08:54:00 AM

The BEA released their estimate of light vehicle sales for April this morning. The BEA estimates sales of 18.51 million SAAR in April 2021 (Seasonally Adjusted Annual Rate), up 3.1% from the March sales rate, and up more than double from April 2020. 

This was the highest sales rate since 2005.

This was above the consensus estimate.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and the BEA's estimate for April (red).

The impact of COVID-19 was significant, and April 2020 was the worst month.

Since April 2020, sales have increased are now up compared to 2019.   

Sales-to-date are up 1.9% compared to the same period in 2019.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate of 18.51 million SAAR.

Sales in April were positively impacted by the American Rescue Plan Act.

by Calculated Risk on 5/04/2021 08:38:00 AM

From the Department of Commerce reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $74.4 billion in March, up $3.9 billion from $70.5 billion in February, revised.

March exports were $200.0 billion, $12.4 billion more than February exports. March imports were $274.5 billion, $16.4 billion more than February imports.
emphasis added

Click on graph for larger image.

Both exports and imports increased in March.

Exports are up 8.1% compared to March 2020; imports are up 18.1% compared to March 2020.

Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports much more than exports),

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, imports and exports of petroleum products are close to zero.

The trade deficit with China increased to $27.7 billion in March, from $11.8 billion in March 2020.

by Calculated Risk on 5/04/2021 08:00:00 AM

Notes: This CoreLogic House Price Index report is for March. The recent Case-Shiller index release was for February. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: Millennials Propel Home Buying: Strong Demand and Short Supply Push US Home Prices Higher in March, CoreLogic Reports

CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for March 2021.

As consumer confidence rebounds and the job market picks back up, the 2021 spring homebuying season is on track to outpace trends seen in 2019 and 2018. Millennials lead the homebuying charge with older millennials seeking move-up purchases and younger millennials entering peak homebuying years. As we look towards the second half of the year, further erosion of affordability may dampen purchase demand as prospective buyers continue to compete for the severely limited supply of for-sale homes. A pick-up in construction and an increase in for-sale listings as more people get vaccinated may help moderate surging home price growth.

“Despite the severe slowdown last year, the 2021 spring homebuying season is trending strong — reflecting the many positive signs of economic recovery,” said Frank Martell, president and CEO of CoreLogic. “With prospective buyers continuing to be motivated by historically low mortgage rates, we anticipate sustained demand in the summer and early fall."
...
Nationally, home prices increased 11.3% in March 2021, compared with March 2020. On a month-over-month basis, home prices increased by 2% compared to February 2021.

“Lower-priced homes are in big demand and short supply, driving up prices faster compared to their more expensive counterparts,” said Dr. Frank Nothaft, chief economist at CoreLogic. “First-time buyers seeking a starter home priced 25% or more below the local-area median saw prices jump 15.1% during the past year, compared with the overall 11.3% gain in our national index."
emphasis added

by Calculated Risk on 5/03/2021 09:00:00 PM

From Matthew Graham at Mortgage News Daily: MBS RECAP: Logical Reaction to Data Sets Stage For Interesting Week

The week began with bond markets reacting to weaker economic data with a logical rally. That's the sort of quintessential connection that's been fairly elusive for most of the post-pandemic era. Last month's super strong jobs report (and subsequent bond losses) suggested that trend may be changing. ... [30 year fixed 3.10%]
emphasis added

Tuesday:
• At 8:00 AM ET, Corelogic House Price index for March.

• At 8:30 AM, Trade Balance report for March from the Census Bureau. The consensus is the trade deficit to be $74.0 billion.  The U.S. trade deficit was at $71.1 Billion in February.

by Calculated Risk on 5/03/2021 06:33:00 PM

Note: I'm looking forward to not posting this daily! I've been posting this data daily for over a year, and I'll stop once all three of these criteria are met:
1) 70% of the population over 18 has had at least one dose of vaccine, and
2) new cases are under 5,000 per day, and
3) hospitalizations are below 3,000.

According to the CDC, 246.8 million doses have been administered. 40.6% of the population over 18 is fully vaccinated, and 56.3% of the population over 18 has had at least one dose (145.3 million people over 18 have had at least one dose).

And check out COVID Act Now to see how each state is doing. 

Over 1,000 US deaths were reported so far in May due to COVID.

Click on graph for larger image.

This graph shows the daily (columns) 7 day average (line) of positive tests reported.

Note: The ups and downs during the Winter surge were related to reporting delays due to the Thanksgiving and Christmas holidays.

This data is from the CDC.

The 7-day average is 48,165, down from 49,456 yesterday, and down from the recent peak of 69,881 on April 13, 2021. This is the lowest since October 8, 2020, but well above the post-summer surge low of 34,668.

The second graph shows the number of people hospitalized.

This data is also from the CDC.

The CDC cautions that due to reporting delays, the area in grey will probably increase.

The current 7-day average is 34,012, down from 36,000 reported yesterday, but well above the post-summer surge low of 23,000.

by Calculated Risk on 5/03/2021 04:00:00 PM

Note: This is as of April 25th.

From the MBA: Share of Mortgage Loans in Forbearance Slightly Decreases to 4.47%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 4.49% of servicers’ portfolio volume in the prior week to 4.47% as of April 25, 2021. According to MBA’s estimate, 2.23 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 points to 2.42%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.02%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 13 basis points to 8.55%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.70%, and the percentage of loans in forbearance for depository servicers also declined 2 basis points to 4.62%.

"The share of loans in forbearance decreased for the ninth straight week, dropping by 2 basis points. The rate of exits has slowed the past two weeks, with this week’s exit rate reaching the lowest since February,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased forbearance share for other loans that are not federally backed.”

Added Fratantoni, “Job market and housing market data remain strong. We expect that further gains in hiring will help to support many homeowners as they exit forbearance in the months ahead.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has trended down since then.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%."

by Calculated Risk on 5/03/2021 02:13:00 PM

From the Federal Reserve: The April 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices

Regarding loans to businesses, respondents to the April survey indicated that, on balance, they eased their standards on commercial and industrial (C&I) loans to firms of all sizes over the first quarter. Banks reported weaker demand, on net, for C&I loans to large and middle-market firms, and demand for C&I loans from small firms remained basically unchanged. Standards on commercial real estate (CRE) loans secured by nonfarm nonresidential properties remained basically unchanged, while banks tightened standards on construction and land development loans and eased standards on multifamily loans. Banks reported stronger demand for construction and land development and multifamily loans and reported weaker demand for nonfarm nonresidential loans.

For loans to households, banks eased standards across most categories of residential real estate (RRE) loans, on net, and reported stronger demand for most types of RRE loans over the first quarter. Banks also eased standards across all three consumer loan categories—credit card loans, auto loans, and other consumer loans. Meanwhile, demand for credit card and other consumer loans remained basically unchanged, and demand for auto loans moderately strengthened.
emphasis added

Click on graph for larger image.

This graph on Residnetial Real Estate lending is from the Senior Loan Officer Survey Charts.

This shows that banks have eased standards (tightened for subprime), and that there is increased demand for RRE loans.

by Calculated Risk on 5/03/2021 10:39:00 AM

One of the key questions for 2021 is: Will inventory increase as the pandemic subsides, or will inventory decrease further in 2021?

Tracking inventory will be very important this year.

Click on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.

As of April 30th, inventory was at 307 thousand (7 day average), compared to 738 thousand the same week a year ago.  That is a decline of 58%.

A week ago, inventory was at 310 thousand, and was down 58% YoY.  Seasonally, inventory might be at a bottom - this is the same level as three weeks ago at 307 thousand.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 5/03/2021 10:18:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, 0.2 percent above the revised February estimate of $1,509.9 billion. The March figure is 5.3 percent above the March 2020 estimate of $1,436.7 billion.
emphasis added

Private spending increased and public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $1,169.2 billion, 0.7 percent above the revised February estimate of $1,160.9 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $343.9 billion, 1.5 percent below the revised February estimate of $349.0 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Residential spending is 7% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 7% above the previous peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 6% above the previous peak in March 2009, and 31% above the austerity low in February 2014.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 23.3%. Non-residential spending is down 9.1% year-over-year. Public spending is down 4.6% year-over-year.

Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential will be under pressure. For example, lodging is down 24% YoY, multi-retail down 31.5% YoY, and office down 4.2% YoY.

This was well below consensus expectations of a 2.0% increase in spending, and construction spending for the previous two months was revised down.

by Calculated Risk on 5/03/2021 10:04:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion in April. The PMI® was at 60.7% in April, down from 64.7% in March. The employment index was at 55.1%, down from 59.6% last month, and the new orders index was at 64.3%, down from 68.0%.

From ISM: April 2021 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector grew in April, with the overall economy notching an 11th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The April Manufacturing PMI® registered 60.7 percent, a decrease of 4 percentage points from the March reading of 64.7 percent. This figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. The New Orders Index registered 64.3 percent, declining 3.7 percentage points from the March reading of 68 percent. The Production Index registered 62.5 percent, a decrease of 5.6 percentage points compared to the March reading of 68.1 percent. The Backlog of Orders Index registered 68.2 percent, 0.7 percentage point higher compared to the March reading of 67.5 percent. The Employment Index registered 55.1 percent, 4.5 percentage points lower than the March reading of 59.6 percent. The Supplier Deliveries Index registered 75 percent, down 1.6 percentage points from the March figure of 76.6 percent. The Inventories Index registered 46.5 percent, 4.3 percentage points lower than the March reading of 50.8 percent. The Prices Index registered 89.6 percent, up 4 percentage points compared to the March reading of 85.6 percent. The New Export Orders Index registered 54.9 percent, an increase of 0.4 percentage point compared to the March reading of 54.5 percent. The Imports Index registered 52.2 percent, a 4.5-percentage point decrease from the March reading of 56.7 percent.”
emphasis added

This was well below expectations.

This suggests manufacturing expanded at a slower pace in April than in March.