by Calculated Risk on 6/03/2024 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion. The PMI® was at 48.7% in May, down from 49.2% in April. The employment index was at 51.1%, up from 48.6% the previous month, and the new orders index was at 45.4%, down from 49.1%.

From ISM: Manufacturing PMI® at 48.7%; May 2024 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector contracted in May for the second consecutive month and the 18th time in the last 19 months, 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 Manufacturing PMI® registered 48.7 percent in May, down 0.5 percentage point from the 49.2 percent recorded in April. The overall economy continued in expansion for the 49th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index remained in contraction territory, registering 45.4 percent, 3.7 percentage points lower than the 49.1 percent recorded in April. The May reading of the Production Index (50.2 percent) is 1.1 percentage points lower than April’s figure of 51.3 percent. The Prices Index registered 57 percent, down 3.9 percentage points compared to the reading of 60.9 percent in April. The Backlog of Orders Index registered 42.4 percent, down 3 percentage points compared to the 45.4 percent recorded in April. The Employment Index registered 51.1 percent, up 2.5 percentage points from April’s figure of 48.6 percent.
emphasis added

This suggests manufacturing contracted in May.  This was below the consensus forecast.

by Calculated Risk on 6/03/2024 08:12:00 AM

Altos reports that active single-family inventory was up 1.7% week-over-week. Inventory is now up 22.4% from the February bottom, and at the highest level since August 2020.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of May 31st, inventory was at 605 thousand (7-day average), compared to 595 thousand the prior week.   

Inventory is still far below pre-pandemic levels. 

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2024.  The black line is for 2019.  Note that inventory is up 85% from the record low for the same week in 2021, but still well below normal levels.

Inventory was up 38.4% compared to the same week in 2023 (last week it was up 37.0%), and down 35.7% compared to the same week in 2019 (last week it was down 36.1%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels is slowly closing.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 6/02/2024 06:15:00 PM

Weekend:
• Schedule for Week of June 2, 2024

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.7, up from 49.2 in April.

• Also at 10:00 AM, Construction Spending for April. The consensus is for a 0.2% increase in construction spending.

• Late: Light vehicle sales for May. The consensus is for light vehicle sales to be 15.9 million SAAR in May, up from 15.7 million in April (Seasonally Adjusted Annual Rate).

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 4 and DOW futures are up 27 (fair value).

Oil prices were down over the last week with WTI futures at $76.85 per barrel and Brent at $81.00 per barrel. A year ago, WTI was at $72, and Brent was at $76 - so WTI oil prices are up about 7% 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 $3.54 per gallon, so gasoline prices are down $0.04 year-over-year.

by Calculated Risk on 6/02/2024 08:21:00 AM

From STR: U.S. hotel results for week ending 25 May

The U.S. hotel industry reported mixed performance results from the previous week but positive comparisons year over year, according to CoStar’s latest data through 25 May. ...

19-25 May 2024 (percentage change from comparable week in 2023):

• Occupancy: 67.7% (+1.6%)
• Average daily rate (ADR): US$160.67 (+2.3%)
• Revenue per available room (RevPAR): US$108.73 (+3.9%)
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 2024, blue is the median, and dashed light blue is for 2023.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking last year, and slightly above the median rate for the period 2000 through 2023 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate will increase seasonally when the summer travel season begins.

by Calculated Risk on 6/01/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 6.5% year-over-year in March

• Inflation Adjusted House Prices 2.2% Below Peak

• Fannie and Freddie: Single Family Serious Delinquency Rate Decreased in April, Multi-family Increased Slightly

• Final Look at Local Housing Markets in April and a Look Ahead to May Sales

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

by Calculated Risk on 6/01/2024 08:11:00 AM

The key report scheduled for this week is the May employment report.

Other key reports include the May ISM Manufacturing, Vehicle Sales and April trade balance.

----- Monday, June 3rd -----
10:00 AM: ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.7, up from 49.2 in April.

10:00 AM: Construction Spending for April. The consensus is for a 0.2% increase in construction spending.

Late: Light vehicle sales for May.

The consensus is for light vehicle sales to be 15.9 million SAAR in May, up from 15.7 million in April (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.


----- Tuesday, June 4th -----
10:00 AM ET: Job Openings and Labor Turnover Survey for April from the BLS.

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

Jobs openings decreased in March to 8.49 million from 8.81 million in February. The number of job openings (black) were down 12% year-over-year.

----- Wednesday, June 5th -----
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 May. This report is for private payrolls only (no government). The consensus is for 174,000 payroll jobs added in May, down from 192,000 in April.

10:00 AM: the ISM Services Index for May.   The consensus is for a reading of 50.5, up from 59.4.

----- Thursday, June 6th -----
8:30 AM: Trade Balance report for April from the Census Bureau.

This 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 surplus, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $69.7 billion.  The U.S. trade deficit was at $69.4 Billion in March.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 215 thousand initial claims, down from 219 thousand last week.

----- Friday, June 7th -----
8:30 AM: Employment Report for May.   The consensus is for 180,000 jobs added, and for the unemployment rate to be unchanged at 3.9%.

There were 175,000 jobs added in April, and the unemployment rate was at 3.9%.

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

12:00 PM: Q1 Flow of Funds Accounts of the United States from the Federal Reserve.

by Calculated Risk on 5/31/2024 07:10:00 PM

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

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

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations, however hospitalizations were at a pandemic low three weeks ago.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	378	391	≤3501
1my goals to stop weekly posts, 🚩 Increasing number weekly for Deaths ✅ Goal met.

Click on graph for larger image.

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

Weekly deaths have declined from the recent peak of 2,561 and are now below the previous pandemic low of 491 last July.

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

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

Nationally, COVID in wastewater is now off about 90% from the holiday peak at the end of December - and also near the lows of last year - and that suggests weekly deaths will continue to decline.   However, there was a pickup recently, especially in the West.

by Calculated Risk on 5/31/2024 01:01:00 PM

From BofA:

1Q GDP was revised down by three-tenths to 1.3% q/q saar, which was broadly in line with our expectations. Meanwhile, our estimate of 2Q GDP ended up unchanged at 1.8% q/q saar from a week ago. [May 31st estimate]
emphasis added

From Goldman:

The consumption details in this morning’s report indicate weak spending momentum to start the quarter, and we lowered our Q2 GDP tracking estimate by 0.4pp to +2.8% (qoq ar) and our domestic final sales estimate by the same amount to +2.1%. [May 31st estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 2.7 percent on May 31, down from 3.5 percent on May 24. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, a decrease in the nowcast of second-quarter real personal consumption expenditures growth from 3.4 percent to 2.6 percent was partly offset by an increase in the nowcast of second-quarter real gross private domestic investment growth from 5.1 percent to 6.3 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth decreased from -0.06 percentage points to -0.60 percentage points. [May 31st estimate]

by Calculated Risk on 5/31/2024 09:48:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Fannie and Freddie: Single Family Serious Delinquency Rate Decreased in April, Multi-family Increased Slightly

Brief excerpt:

Single-family serious delinquencies decreased in April, and multi-family serious delinquencies increased slightly.
...
Freddie Mac reports that the multi-family delinquencies rate increased to 0.35% in April, up from 0.34% in March, and down from 0.44% in January.

This graph shows the Freddie multi-family serious delinquency rate since 2012. Rates were still high in 2012 following the housing bust and financial crisis.

The multi-family rate increased following the pandemic and has increased recently as rent growth has slowed, vacancy rates have increased, and borrowing rates have increased sharply. The rate surged higher in January but declined in February and March. This will be something to watch as more apartments come on the market.

There is much more in the article.

by Calculated Risk on 5/31/2024 08:57:00 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 April 2024.

CPI Shelter was up 5.5% year-over-year in April, down from 5.6% in March, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 5.6% YoY in April, down from 5.8% in March, and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will continue to slow over the next year.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 6 months (annualized):

Key measures are above the Fed's target on a 6-month basis. Note: There appears to be some residual seasonality distorting PCE, especially in January.