by Calculated Risk on 4/07/2024 08:21:00 AM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

Total originated carloads on U.S. railroads fell 3.5% (31,101 carloads) in March 2024 from March 2023, their third straight monthly decline. Total carloads averaged 216,716 per week in March 2024, the fewest for any March in our records that begin in January 1988. In the first quarter of 2024, total carloads were down 4.2%, or 122,088 carloads, from the same period in 2023.

The problem is coal. ...

U.S. railroads also originated 1.02 million intermodal containers and trailers in March, up 11.7% (106,903 units) over March 2023 and their seventh consecutive year-over-year gain.
emphasis added

Click on graph for larger image.

This graph from the Rail Time Indicators report shows the six-week average of U.S. Carloads in 2022, 2023 and 2024:

In March, total originated U.S. carloads fell 3.5% (31,101 carloads) from March 2023. They averaged 216,716 per week in March 2024, the fewest for any March in our records that begin in January 1988. Total carloads were down 4.2%, or 122,088 carloads, for the year to date.

The second graph shows the six-week average (not monthly) of U.S. intermodal in 2022, 2023 and 2024: (using intermodal or shipping containers):

U.S. railroads originated 1.02 million intermodal containers and trailers in March, up 11.7% (106,903 units) over March 2023. It’s their seventh straight year-over-year gain. ... U.S. intermodal volume in Q1 2024 was 3.27 million units, virtually the same as the average for the first quarters from 2014 to 2023 (3.28 million).

by Calculated Risk on 4/06/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Moody's: Apartment Vacancy Rate Unchanged in Q1; Office Vacancy Rate at Record High

• Freddie Mac House Price Index Increased in February; Up 5.9% Year-over-year

• ICE Mortgage Monitor: The Impact of "Golden-Handcuffs" on Mortgage Payments

• Asking Rents Mostly Unchanged Year-over-year

• Immigration and Household Formation

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

by Calculated Risk on 4/06/2024 08:11:00 AM

The key economic report this week is March CPI.

----- Monday, April 8th -----
No major economic releases scheduled.

----- Tuesday, April 9th -----
6:00 AM ET: NFIB Small Business Optimism Index for March.

----- Wednesday, April 10th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for March from the BLS. The consensus is for 0.4% increase in CPI (up 3.5% YoY) and a 0.3% increase in core CPI (up 3.7% YoY).

2:00 PM: FOMC Minutes, Meeting of March 19-20

----- Thursday, April 11th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 225 thousand initial claims, up from 221 thousand last week.

8:30 AM: The Producer Price Index for March from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI.

----- Friday, April 12th -----
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for April).

by Calculated Risk on 4/05/2024 07:21:00 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.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Hospitalizations have declined significantly from the winter high of 30,027 but are still above the low of 5,386 last year.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	7,401	8,705	≤3,0001
Deaths per Week2	1,002	1,198	≤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.

Weekly deaths have declined sharply from the recent peak of 2,553 but are still more than double the low of 490 last July.

And here is a graph I'm following concerning COVID in wastewater as of March 30th:

This appears to be a leading indicator for COVID hospitalizations and deaths.

Nationally, COVID in wastewater is now off more than 85% from the holiday peak at the end of December, and that suggests weekly hospitalizations and deaths will continue to decline.

by Calculated Risk on 4/05/2024 03:10:00 PM

From BofA:

Since our update last week, 1Q GDP tracking is down two-tenths to 2.0% q/q saar. Also, 4Q GDP came in at 3.4% q/q saar in the third and final estimate, close to our 3.5% forecast. [Apr 5th estimate]
emphasis added

From Goldman:

The details of the trade balance report were somewhat firmer than our previous expectations, and we boosted our Q1 GDP tracking estimate by 0.2pp to +2.5%. [Apr 4th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 2.5 percent on April 4, down from 2.8 percent on April 1. [April 4th estimate]

by Calculated Risk on 4/05/2024 11:59:00 AM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Declined in March

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were down in March compared to February. The Manheim Used Vehicle Value Index (MUVVI) fell to 203.1, a decline of 14.7% from a year ago. The decline in the index was driven by the seasonal adjustment, resulting in a 0.4% month-over-month decrease. The non-adjusted price in March increased by 3.1% compared to February, moving the unadjusted average price down 11.4% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices declined in March (seasonally adjusted) and were down 14.7% year-over-year (YoY).

by Calculated Risk on 4/05/2024 09:10:00 AM

The headline jobs number in the March employment report was above expectations; and January and February payrolls were revised up by 22,000 combined.   The participation rate and the employment population ratio both increased, and the unemployment rate decreased to 3.8%.

Leisure and hospitality gained 49 thousand jobs in March and is now above pre-pandemic levels.

Construction employment increased 39 thousand and is now 596 thousand above the pre-pandemic level. 

Manufacturing employment was unchanged and is now 176 thousand above the pre-pandemic level.

Earlier: March Employment Report: 303 thousand Jobs, 3.8% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate decreased in March to 83.4% from 83.5% in February, and the 25 to 54 employment population ratio was unchanged at to 80.7% from 80.7% the previous month.

Both are above pre-pandemic levels.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.1% YoY in March.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.3 million, changed little in March. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in March to 4.31 million from 4.36 million in February. This is at pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that was unchanged at 7.3% from 7.3% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.246 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.203 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is close to pre-pandemic levels.

Job Streak

Through March 2024, the employment report indicated positive job growth for 39 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	39
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the March employment report was above expectations; and January and February payrolls were revised up by 22,000 combined. The participation rate and the employment population ratio both increased, and the unemployment rate decreased to 3.8%.  Another strong report.

by Calculated Risk on 4/05/2024 08:30:00 AM

From the BLS:

Total nonfarm payroll employment rose by 303,000 in March, and the unemployment rate changed little at 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, government, and construction.
...
The change in total nonfarm payroll employment for January was revised up by 27,000, from +229,000 to +256,000, and the change for February was revised down by 5,000, from +275,000 to +270,000. With these revisions, employment in January and February combined is 22,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 303 thousand in March.  Private payrolls increased by 232 thousand, and public payrolls increased 71 thousand.

Payrolls for January and February were revised up 22 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In March, the year-over-year change was 2.93 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was increased to 62.7% in March, from 62.5% in February. This is the percentage of the working age population in the labor force.

The Employment-Population ratio increased to 60.3% from 60.1% (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate decreased to 3.8% in March from 3.9% in February.

This was well above consensus expectations; and January and February payrolls were revised up by 22,000 combined.  

I'll have more later ...

by Calculated Risk on 4/04/2024 08:33:00 PM

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

Friday:
• At 8:30 AM ET, 8:30 AM: Employment Report for March.   The consensus is for 200,000 jobs added, and for the unemployment rate to be unchanged at 3.9%.

by Calculated Risk on 4/04/2024 05:03:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for March. The consensus is for 200,000 jobs added, and for the unemployment rate to be unchanged at 3.9%.

There were 275,000 jobs added in February, and the unemployment rate was at 3.9%.

From Goldman Sachs economist Spencer Hill

We estimate nonfarm payrolls rose by 240k in March—above consensus ... We estimate that the unemployment rate fell one tenth to 3.8% ... We assume a flat-to-up labor force participation rate of 62.5%. We estimate average hourly earnings rose 0.25% month-over-month, which would lower the year-on-year rate by three tenths to 4.0%—somewhat below consensus.
emphasis added

From BofA:

In the March employment report, we forecast nonfarm payrolls to rise by 200k. Despite solid employment, we do not expect to see signs of an economy that is overheating. We think average hourly earnings likely rose by 0.3% m/m, or 4.1% y/y, and average weekly hours likely ticked higher to 34.4. Finally, we expect the unemployment rate to remain at 3.9% and for the participation rate to rise by one-tenth to 62.6%.

• ADP Report: The ADP employment report showed 184,000 private sector jobs were added in March.  This suggests job gains slightly above consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM services are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index increased in 47.4%, up from 45.9% the previous month.   This would suggest about 35,000 jobs lost in manufacturing. The ADP report indicated 1,000 manufacturing jobs added in March.

The ISM® services employment index decreased to 48.5%, from 8.0%.   This would suggest about 35,000 jobs added in the service sector. Combined this suggests few jobs added in March, far below consensus expectations.

• Unemployment Claims: The weekly claims report showed a larger number of initial unemployment claims during the reference week from 202,000 in February to 212,000 in March.  This suggests slightly more layoffs in March compared to February.

•  COVID: As far as the pandemic, the number of patients hospitalized during the reference week in March was around 10,000, down from 17,000 in February.  

• Conclusion: Based on the ISM surveys and weekly claims, my guess is employment gains will be below consensus expectations.