by Calculated Risk on 6/16/2024 09:07:00 PM

Weekend:
• Schedule for Week of June 16, 2024

Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for June. The consensus is for a reading of -13.0, up from -15.6.

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

Oil prices were up over the last week with WTI futures at $78.45 per barrel and Brent at $82.62 per barrel. A year ago, WTI was at $72, and Brent was at $77 - so WTI oil prices are up about 8% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.43 per gallon. A year ago, prices were at $3.55 per gallon, so gasoline prices are down $0.12 year-over-year.

by Calculated Risk on 6/16/2024 08:21:00 AM

Note: I've received a number of requests lately to post this again, so here is another update of tracking employment during Presidential terms.  We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter, George H.W. Bush and Trump only served one term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.

There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr. Clinton (light blue) served for eight years without a recession.   And there was a pandemic related recession in 2020.

First, here is a table for private sector jobs. The previous top two private sector terms were both under President Clinton.  

1

Term	Private Sector Jobs Added (000s)
Biden	14,096
Clinton 1	10,876
Clinton 2	10,094
Obama 2	9,926
Reagan 2	9,351
Carter	9,039
Reagan 1	5,363
Obama 1	1,907
GHW Bush	1,507
GW Bush 2	443
GW Bush 1	-820
Trump	-2,192
1After 40 months.

Click on graph for larger image.

The first graph is for private employment only.

Private sector employment increased by 9,039,000 under President Carter (dashed green), by 14,714,000 under President Reagan (dark red), 1,507,000 under President G.H.W. Bush (light purple), 20,970,000 under President Clinton (light blue), lost 377,000 under President G.W. Bush, and gained 11,833,000 under President Obama (dark dashed blue).  During Trump's term (Orange), the economy lost 2,135,000 private sector jobs.

In the first 40 months of President Biden's term (Blue), the economy has added 14,096,000 private sector jobs, with the initial growth as the economy recovered from the pandemic.

 A big difference between the presidencies has been public sector employment.  Note: the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, 2010 and 2020. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).  However, the public sector declined significantly while Mr. Obama was in office (down 263,000 jobs).  During Trump's term, the economy lost 528,000 public sector jobs.

In the first 40 months of President Biden's term, the economy has added 1,531,000 public sector jobs (about 92% of public job growth has been for state and local governments, and about 55% for education).

And a table for public sector jobs. Public sector jobs increased have increased the most during Biden's term, just ahead of the number during Reagan's 2nd term.  Public sector jobs declined the most during Obama's first term.

Term	Public Sector Jobs Added (000s)
Biden	1,5311
Reagan 2	1,438
Carter	1,304
Clinton 2	1,242
GHW Bush	1,127
GW Bush 1	900
GW Bush 2	844
Clinton 1	692
Obama 2	447
Reagan 1	-24
Trump	-528
Obama 1	-710
1After 40 months.

by Calculated Risk on 6/15/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Q1 Update: Delinquencies, Foreclosures and REO

• Part 1: Current State of the Housing Market; Overview for mid-June 2024

• Part 2: Current State of the Housing Market; Overview for mid-June 2024

• 3rd Look at Local Housing Markets in May

• 2nd Look at Local Housing Markets in May

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

by Calculated Risk on 6/15/2024 08:11:00 AM

The key reports this week are May Retail Sales, Housing Starts and Existing Home Sales.

For manufacturing, Industrial Production, and the NY and Philly Fed manufacturing surveys, will be released this week.

----- Monday, June 17th -----
8:30 AM: The New York Fed Empire State manufacturing survey for June. The consensus is for a reading of -13.0, up from -15.6.

----- Tuesday, June 18th -----
8:30 AM: Retail sales for May is scheduled to be released.  The consensus is for a 0.3% increase in retail sales.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). 

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for May.

This graph shows industrial production since 1967.

The consensus is for a 0.2% increase in Industrial Production, and for Capacity Utilization to increase to 78.6%.

----- Wednesday, June 19th -----
All US markets will be closed in observance of Juneteenth National Independence Day

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: The June NAHB homebuilder survey. The consensus is for a reading of 46, up from 45 last month. Any number above 50 indicates that more builders view sales conditions as poor than good.
----- Thursday, June 20th -----
8:30 AM ET: Housing Starts for May.

This graph shows single and total housing starts since 1968.

The consensus is for 1.380 million SAAR, up from 1.360 million SAAR in April.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 240 thousand initial claims, down from 242 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for June. The consensus is for a reading of 4.5, unchanged from 4.5 last month.

----- Friday, June 21st -----
10:00 AM: Existing Home Sales for May from the National Association of Realtors (NAR). The consensus is for 4.10 million SAAR, down from 4.14 million.

The graph shows existing home sales from 1994 through the report last month.

by Calculated Risk on 6/14/2024 07:23:00 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✅	311	314	≤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 June 6th:

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

COVID in wastewater is increasing - especially in the West - and this suggest deaths might increase again. 

by Calculated Risk on 6/14/2024 02:01:00 PM

From BofA:

Since last week,1Q GDP tracking is down from 1.6% q/q saar to 1.5% q/q saar and 2Q GDP tracking is up two-tenths to 1.8%. [June 14th estimate]
emphasis added

From Goldman:

Our 2024Q2 GDP growth tracking estimate is now down to 2.1% (vs. the Atlanta Fed at 3.1%) and our 2024 Q4/Q4 GDP growth forecast is now down to 2% but still above consensus. [June 10th 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 3.1 percent on June 7, up from 2.6 percent on June 6. [June 7th estimate]

by Calculated Risk on 6/14/2024 09:46:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in May

A brief excerpt:

The National Association of Realtors (NAR) is scheduled to release May Existing Home Sales on Friday June 21st at 10 AM ET. The early consensus is for 4.10 million SAAR, down from 4.14 million in April, and down from 4.23 million in May 2023.
...
In May, sales in these markets were down 0.6% YoY. Last month, in April, these same markets were up 7.6% year-over-year Not Seasonally Adjusted (NSA). However, there were two more working days in April 2024 than in April 2023, so seasonally adjusted, sales were down YoY last month.

Sales in all of these markets are down compared to May 2019.
...
This is a small year-over-year decrease NSA for these markets. There were the same number of working days in May 2024 compared to May 2023, so the year-over-year change in the seasonally adjusted sales will be about the same as the NSA data suggests.
...
Many more local markets to come!

There is much more in the article.

by Calculated Risk on 6/14/2024 08:11:00 AM

From STR: U.S. hotel results for week ending 8 June

The U.S. hotel industry reported higher performance results from the previous week but mixed comparisons year over year, according to CoStar’s latest data through 8 June. ...

2-8 June 2024 (percentage change from comparable week in 2023):

• Occupancy: 69.1% (-0.1%)
• Average daily rate (ADR): US$160.90 (+1.8%)
• Revenue per available room (RevPAR): US$111.26 (+1.7%)
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 is 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 now increase seasonally with the summer travel season.

by Calculated Risk on 6/13/2024 05:55:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For April, Realtor.com reported inventory was up 35.2% YoY, but still down almost 34% compared to April 2017 to 2019 levels. 

 Now - on a weekly basis - inventory is up 36.0% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending June 8, 2024

• Active inventory increased, with for-sale homes 36.0% above year-ago levels

For the 31st straight week, there were more homes listed for sale versus the prior year, giving homebuyers more options. This past week, the inventory of homes for sale grew by 36.0% compared with last year. This growth in inventory is primarily driven by housing markets in the South, which saw a 47.2% year-over-year increase in inventory in May.

• New listings—a measure of sellers putting homes up for sale—were up this week, by 8.0% from one year ago

Seller activity continued to climb annually last week, accelerating compared to the previous two weeks’ growth. With recent mortgage rates fluctuating around 7%, potential sellers are closely monitoring these changes and adjusting their listing decisions accordingly.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 31st consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels although up year-over-year.

by Calculated Risk on 6/13/2024 02:01:00 PM

The BLS reported yesterday:

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 3.3 percent over the last 12 months to an index level of 308.163 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U and is not seasonally adjusted (NSA).

• In 2023, the Q3 average of CPI-W was 301.236.

The 2023 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year.

Click on graph for larger image.

This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.

Note: The year labeled is for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year).

CPI-W was up 3.3% year-over-year in May, and although this is very early - we need the data for July, August and September - my very early guess is COLA will probably be between 2.5% and 3.0% this year, the smallest increase since 1.3% in 2021.

Contribution and Benefit Base

The contribution base will be adjusted using the National Average Wage Index. This is based on a one-year lag. The National Average Wage Index is not available for 2023 yet, although we know wages increased solidly in 2023. If wages increased 5% in 2023, then the contribution base next year will increase to around $177,000 in 2025, from the current $168,600.

Remember - this is a very early look. What matters is average CPI-W, NSA, for all three months in Q3 (July, August and September).