RSS Feed by Calculated Risk on 9/07/2024 08:11:00 AM
Saturday, September 07, 2024
Schedule for Week of September 8, 2024
The key economic report this week is the August Consumer Price Index (CPI).
No major economic releases scheduled.
6:00 AM: NFIB Small Business Optimism Index for August.
8:00 AM: Corelogic House Price index for July
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 August from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI. The consensus is for CPI to be up 2.6% year-over-year (down from 2.9% in July) and core CPI to be up 3.2% YoY (unchanged from 3.2% in July).
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 225 thousand initial claims, down from 227 thousand last week.
8:30 AM: The Producer Price Index for August from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.
12:00 PM: Q2 Flow of Funds Accounts of the United States from the Federal Reserve.
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for September).
Friday, September 06, 2024
September 6th COVID Update: Wastewater Measure Has Peaked
by Calculated Risk on 9/06/2024 07:31:00 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.
| COVID Metrics | ||||
|---|---|---|---|---|
| Now | Week Ago | Goal | ||
| Deaths per Week🚩 | 971 | 891 | ≤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.
Although weekly deaths met the original goal to stop posting, I'm going to continue to post now that deaths are above the goal again.
Weekly deaths are triple the low of 302 in early June.
This appears to be a leading indicator for COVID hospitalizations and deaths.COVID in wastewater turned down in most areas recently and this suggests weekly deaths will likely decline in a few weeks (until the winter surge).
Q3 GDP Tracking: Low-to-Mid 2%
by Calculated Risk on 9/06/2024 06:17:00 PM
From BofA:
Since our last weekly publication, the 3Q GDP tracking estimate went down three tenths to 2.3% q/q saar while our 2Q GDP tracking estimate remains unchanged at 3.0% q/q saar since the second official estimate. [Sept 6th estimate]From Goldman:
emphasis added
The details of the trade balance report were somewhat softer than our previous assumptions while the details of the factory orders report were roughly in line with our expectations. On net, we lowered our Q3 GDP tracking estimate by 0.2pp to +2.5% (quarter-over-quarter annualized) and left our Q3 domestic final sales forecast unchanged at 2.6%. [Sept 4th estimate]And from the Atlanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 2.1 percent on September 4, up from 2.0 percent on September 3. After this morning’s releases from the US Census Bureau, an increase in the nowcast of third-quarter real gross private domestic investment growth from -0.6 percent to 0.0 percent was slightly offset by a decrease in the nowcast of third-quarter real personal consumption expenditures growth from 3.3 percent to 3.2 percent. [Sept 4th estimate]
Catching Up: New Home Sales Increased to 739,000 Annual Rate in July
by Calculated Risk on 9/06/2024 12:03:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Catching Up: New Home Sales Increased to 739,000 Annual Rate in July
Brief excerpt:
I'm back from Africa! I’ll be catching up on recent data over the next few days, and I’ll post some photos / videos from my trip.There is much more in the article.
...
Last week the Census Bureau reported New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 739 thousand. The previous three months were revised up sharply, combined.
...
The next graph shows new home sales for 2023 and 2024 by month (Seasonally Adjusted Annual Rate). Sales in July 2024 were up 21.3% from July 2023.
New home sales, seasonally adjusted, have increased year-over-year in 15 of the last 16 months.
Comments on August Employment Report
by Calculated Risk on 9/06/2024 09:12:00 AM
The headline jobs number in the August employment report was below expectations, and June and July payrolls were revised down by 82,000 combined. The participation rate and the employment population ratio were unchanged, and the unemployment rate decreased to 4.2%.
Construction employment increased 34 thousand and is now 665 thousand above the pre-pandemic level.
Manufacturing employment decreased 24 thousand and is now 147 thousand above the pre-pandemic level.
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 August to 83.9% from 84.0% in July.
The 25 to 54 employment population ratio was unchanged at 80.9% from 80.9% the previous month.
Both are above pre-pandemic levels and near the highest level this millennium.
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).
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 3.8% YoY in August.
Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.8% YoY in August.
Part Time for Economic Reasons
From the BLS report:"The number of people employed part time for economic reasons was little changed at 4.8 million in August. This measure is up from 4.2 million a year earlier. These individuals would have preferred full-time employment but 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 increased in August to 4.83 million from 4.57 million in July. This is above the pre-pandemic levels.
These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.9% from 7.8% 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 1.533 million workers who have been unemployed for more than 26 weeks and still want a job, essentialy unchanged from 1.535 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 above pre-pandemic levels.
Job Streak
Summary:
The headline jobs number in the August employment report was below expectations, and June and July payrolls were revised down by 82,000 combined. The participation rate and the employment population ratio were unchanged, and the unemployment rate decreased to 4.2%.
This is above pre-pandemic levels.
Job Streak
Through August 2024, the employment report indicated positive job growth for 44 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939). It appears this streak will survive the annual benchmark revision (that will revise down job growth).
| Headline Jobs, Top 10 Streaks | ||
|---|---|---|
| Year Ended | Streak, Months | |
| 1 | 2019 | 100 |
| 2 | 1990 | 48 |
| 3 | 2007 | 46 |
| 4 | 1979 | 45 |
| 5 | 20241 | 44 |
| 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 August employment report was below expectations, and June and July payrolls were revised down by 82,000 combined. The participation rate and the employment population ratio were unchanged, and the unemployment rate decreased to 4.2%.
A weaker than expected report, and the three-month average employment growth has slowed to 116 per month. The unemployment rate is up from a low of 3.4% in early 2023 to 4.2% in August (although down slightly from July).
August Employment Report: 142 thousand Jobs, 4.2% Unemployment Rate
by Calculated Risk on 9/06/2024 08:30:00 AM
From the BLS: Employment Situation
Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in construction and health care.
...
The change in total nonfarm payroll employment for June was revised down by 61,000, from +179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to +89,000. With these revisions, employment in June and July combined is 86,000 lower 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 142 thousand in August. Private payrolls increased by 118 thousand, and public payrolls increased 24 thousand.
Payrolls for June and July were revised down 86 thousand, combined.
Payrolls for June and July were revised down 86 thousand, combined.
The second graph shows the year-over-year change in total non-farm employment since 1968.In August, the year-over-year change was 2.36 million jobs. Employment was up solidly year-over-year (Although the annual benchmark revision will lower the year-over-year change).
The third graph shows the employment population ratio and the participation rate.
The Labor Force Participation Rate was unchanged at 62.7% in August, from 62.7% in July. This is the percentage of the working age population in the labor force. The Employment-Population ratio was unchanged at 60.0% from 60.0% in July (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 4.2% in August from 4.3% in July.
This was below consensus expectations, and June and July payrolls were revised down by 82,000 combined.
Thursday, September 05, 2024
Friday: Employment Report
by Calculated Risk on 9/05/2024 07:09:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
Friday:
• At 8:30 AM ET, Employment Report for August. The consensus is for 164,000 jobs added, and for the unemployment rate to decreased to 4.2%.
August Employment Preview
by Calculated Risk on 9/05/2024 03:47:00 PM
On Friday at 8:30 AM ET, the BLS will release the employment report for August. The consensus is for 164,000 jobs added, and for the unemployment rate to decreased to 4.2%.
There were 114,000 jobs added in July, and the unemployment rate was at 4.3%.
From Goldman Sachs:
We are below consensus on payroll growth at 155k but in line on the unemployment rate at 4.2%.• ADP Report: The ADP employment report showed 99,000 private sector jobs were added in August. This was below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.
We are below consensus on payroll growth because August payrolls have exhibited a consistent negative bias in initial prints over the last decade, Big Data indicators continued to slow, and the immigration boost to labor force and employment growth should be slowing (although still well above trend). On the positive side, we should see some rebound from severe weather in July.
We expect the unemployment rate fell 0.1pp on a rounded basis to 4.2%, a low hurdle from an unrounded 4.25% in July, reflecting the reversal of some of the temporary layoffs in July linked to summer auto plant retooling shutdowns or extreme heat.
emphasis added
• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires). The ISM® manufacturing employment index increased to 46.0%, up from 43.4% the previous month. This would suggest about 40,000 jobs lost in manufacturing. The ADP report indicated 8,000 manufacturing jobs lost in August.
The ISM® services employment index decreased to 50.2%, from 51.1%. This would suggest 80,000 jobs added in the service sector. Combined this suggests 40,000 jobs added in August, far below consensus expectations.
• Unemployment Claims: The weekly claims report showed fewer initial unemployment claims during the reference week at 233,000 in July compared to 245,000 in July. This suggests fewer layoffs in August compared to July.
• Conclusion: My guess is employment gains will be below consensus expectations.
Calculated Risk Returns! Existing Home Sales Increased to 3.95 million SAAR in July
by Calculated Risk on 9/05/2024 12:16:00 PM
Today, in the CalculatedRisk Real Estate Newsletter: Calculated Risk Returns! Existing Home Sales Increased to 3.95 million SAAR in July
Excerpt:
I'm back from Africa! I’ll be catching up on recent data over the next week, and I’ll post some photos / videos from my trip.
...
Sales Year-over-Year and Not Seasonally Adjusted (NSA)
The fourth graph shows existing home sales by month for 2023 and 2024.
Sales declined 2.5% year-over-year compared to July 2023. This was the thirty-fifth consecutive month with sales down year-over-year.
ISM® Services Index Increases to 51.5% in August
by Calculated Risk on 9/05/2024 10:04:00 AM
(Posted with permission). The ISM® Services index was at 51.5%, up from 51.4% last month. The employment index decreased to 50.2%, from 51.1%. Note: Above 50 indicates expansion, below 50 in contraction.
From the Institute for Supply Management: Services PMI® at 51.5% August 2024 Services ISM® Report On Business®
Economic activity in the services sector expanded for the second consecutive month in August, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® registered 51.5 percent, indicating sector expansion in six of eight months in 2024. This month’s reading indicates sector expansion for the 48th time in 51 months.The PMI was slightly above expectations.
The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In August, the Services PMI® registered 51.5 percent, 0.1 percentage point higher than July’s figure of 51.4 percent. The reading in August marked the sixth time the composite index has been in expansion territory in 2024. The Business Activity Index registered 53.3 percent in August, which is 1.2 percentage points lower than the 54.5 percent recorded in July and indicated continuing expansion after one month of contraction in June. The New Orders Index expanded to 53 percent in August, 0.6 percentage point higher than July’s figure of 52.4 percent. The Employment Index expanded for the third time in 2024; the reading of 50.2 percent is a 0.9-percentage point decrease compared to the 51.1 percent recorded in July.
emphasis added
