by Calculated Risk on 7/02/2023 07:48:00 PM

Weekend:
• Schedule for Week of July 2, 2023

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for June. The consensus is for the ISM to be at 47.2, up from 46.9 in May. 

• Also, at 10:00 AM, Construction Spending for May. The consensus is for a 0.5% increase in construction spending.

• Late in the day, Light vehicle sales for June. The consensus is for light vehicle sales to be 15.3 million SAAR in June, up from 15.1 million in May (Seasonally Adjusted Annual Rate). Wards Auto is forecasting sales of 15.9 million SAAR in June.

• US markets will close at 1:00 PM ET prior to the Independence Day Holiday.

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

Oil prices were up over the last week with WTI futures at $70.64 per barrel and Brent at $75.41 per barrel. A year ago, WTI was at $110, and Brent was at $119 - so WTI oil prices are down about 36% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.50 per gallon. A year ago, prices were at $4.81 per gallon, so gasoline prices are down $1.31 per gallon year-over-year.

by Calculated Risk on 7/02/2023 08:21:00 AM

Here is another monthly update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16th. I've now switched to a new physically-delivered Lumber Futures contract that was started in August 2022. Unfortunately, this impacts long term price comparisons.

This graph shows CME random length framing futures through May 16th (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

LBR is currently at $528.50 per 1000 board feet.

Click on graph for larger image.

The year-over-year change is estimated using the previous series.

There is somewhat of a seasonal demand for lumber, and lumber prices usually peak in April or May.

We didn't see a significant runup in prices this Spring due to the housing slowdown.

by Calculated Risk on 7/01/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• New Home Sales increase to 763,000 Annual Rate in May

• Case-Shiller: National House Price Index Decreased 0.2% year-over-year in April

• Inflation Adjusted House Prices 3.8% Below Peak

• Fannie and Freddie Serious Delinquencies in May: Single Family Declined, Multi-Family Increased

• Freddie Mac House Price Index Increased Slightly in May; Up 0.4% Year-over-year

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

You can subscribe at https://calculatedrisk.substack.com/

Most content is available for free (and no Ads), but please subscribe!

by Calculated Risk on 7/01/2023 08:11:00 AM

The key report scheduled for this week is the June employment report to be released on Friday.

Other key reports include the June ISM Manufacturing survey, June Vehicle Sales, May Job Openings and the Trade Deficit for May.

----- Monday, July 3rd -----
10:00 AM: ISM Manufacturing Index for June. The consensus is for the ISM to be at 47.2, up from 46.9 in May. 

10:00 AM: Construction Spending for May. The consensus is for a 0.5% increase in construction spending.

Late in the day: Light vehicle sales for June.

The consensus is for light vehicle sales to be 15.3 million SAAR in June, up from 15.1 million in May (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the sales rate for last month.

Wards Auto is forecasting sales of 15.9 million SAAR in June.

US markets will close at 1:00 PM ET prior to the Independence Day Holiday.

----- Tuesday, July 4th -----
All US markets will be closed in observance of Independence Day

----- Wednesday, July 5th -----
8:00 AM: Corelogic House Price index for May.

2:00 PM: FOMC Minutes, Meeting of June 13-14, 2023

----- Thursday, July 6th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for June. This report is for private payrolls only (no government). The consensus is for 236,000 payroll jobs added in June, down from 278,000 in May.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 245 thousand initial claims, up from 239 thousand last week.

8:30 AM: Trade Balance report for May from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. 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.

The consensus is the trade deficit to be $69.8 billion.  The U.S. trade deficit was at $74.6 billion the previous month.

10:00 AM ET: Job Openings and Labor Turnover Survey for May from the BLS.

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

Jobs openings increased in April to 10.1 million from 9.7 million in March.

The number of job openings (yellow) were down 14% year-over-year and quits were down 16% year-over-year.

10:00 AM: the ISM Services Index for June.   The consensus is for a reading of 50.5, up from 50.3.

----- Friday, July 7th -----
8:30 AM: Employment Report for June.   The consensus is for 200,000 jobs added, and for the unemployment rate to be unchanged at 3.7%.

There were 339,000 jobs added in May, and the unemployment rate was at 3.7%.

This graph shows the jobs added per month since January 2021.

by Calculated Risk on 6/30/2023 07:11:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Due to changes at the CDC, weekly cases are no longer updated.

After the first few weeks, the pandemic low for weekly deaths had been the week of July 7, 2021, at 1,690 deaths (until recently).  

For COVID hospitalizations, the previous low was 9,821 (until recently).

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	5,758	6,233	≤3,0001
Deaths per Week2	522	624	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

For deaths, I'm currently using 3 weeks ago for "now", since the most recent two weeks will be revised significantly.

by Calculated Risk on 6/30/2023 12:52:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Increased Slightly in May; Up 0.4% Year-over-year

A brief excerpt:

On a year-over-year basis, the National FMHPI was up 0.4% in May, from up 0.7% YoY in April.  The YoY increase peaked at 19.2% in July 2021. ...

In May, 15 states and D.C. were below their 2022 peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peak were in D.C. (-9.1%), Idaho (-7.2%), Nevada (-7.1%), Hawaii (-5.5%), Arizona (-5.2%), Utah (-4.9%), Washington (-4.3%), California (-3.7%), Oregon (-3.6%) and Wyoming (-5.0%).

For cities (Core-based Statistical Areas, CBSA), here are the 30 cities with the largest declines from the peak, seasonally adjusted.
...
The FMHPI is suggesting the YoY change in the Case-Shiller index will be close to unchanged for the next couple of months.

The big question is “Will house prices decline further later this year?” And I’ll post some thoughts on this next week.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 6/30/2023 12:00:00 PM

From BofA:

Personal spending came in slight below expectations and with a downward revision in April. Overall, this decreased our personal consumption expenditure tracking estimate for 2Q. After rounding, it left our 2Q US GDP tracking estimate unchanged at 1.5%. [June 30th estimate]
emphasis added

From Goldman:

[W]e left our Q2 GDP tracking estimate unchanged at +2.2% (qoq ar). [June 30th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 2.2 percent on June 30, up from 1.8 percent on June 27. [June 30th estimate]

by Calculated Risk on 6/30/2023 08:47:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through May 2023.

CPI Shelter was up 8.0% year-over-year in May, down from 8.1% in April, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 8.3% YoY in May, down from 8.4% in April (April was the cycle peak).

Since asking rents are soft and Year-over-year Rent Growth Continues to Decelerate these measures will slow further in coming months.

by Calculated Risk on 6/30/2023 08:37:00 AM

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

Personal income increased $91.2 billion (0.4 percent at a monthly rate) in May, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $86.7 billion (0.4 percent) and personal consumption expenditures (PCE) increased $18.9 billion (0.1 percent).

The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Real DPI increased 0.3 percent in May and real PCE decreased by less than 0.1 percent; goods decreased 0.4 percent and services increased 0.2 percent
emphasis added

The May PCE price index increased 3.8 percent year-over-year (YoY), down from 4.3 percent YoY in April, and down from the recent peak of 7.0 percent in June 2022.

The PCE price index, excluding food and energy, increased 4.6 percent YoY, down from 4.7 percent in April, and down from the recent peak of 5.4 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2023 (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.

Personal income was at expectations, and PCE was slightly below expectations.

Inflation was slightly below expectations.

Using the two-month method to estimate Q2 real PCE growth, real PCE was increasing at a 0.7% annual rate in Q2 2023. (Using the mid-month method, real PCE was increasing at 0.8%).  This suggests weak PCE growth in Q2.

by Calculated Risk on 6/29/2023 08:45:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Personal Income and Outlays, May 2023. The consensus is for a 0.4% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.4%.  PCE prices are expected to be up 3.8% YoY, and core PCE prices up 4.7% YoY.

• At 9:45 AM, Chicago Purchasing Managers Index for June.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for June). The consensus is for a reading of 63.9.