by Calculated Risk on 1/16/2014 12:38:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.1% annualized rate) in December. The 16% trimmed-mean Consumer Price Index increased 0.2% (2.2% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.3% (3.6% annualized rate) in December. The CPI less food and energy increased 0.1% (1.3% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for December here. Fuel oil and motor fuels increased sharply in December.

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.1%, the trimmed-mean CPI rose 1.7%, and the CPI less food and energy rose 1.7%. Core PCE is for November and increased just 1.1% year-over-year.

On a monthly basis, median CPI was at 3.1% annualized, trimmed-mean CPI was at 2.2% annualized, and core CPI increased 1.3% annualized.

These measures suggest inflation remains below the Fed's target.

by Calculated Risk on 1/16/2014 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 56 in January, down from 57 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.

From the NAHB: Builder Confidence Slips One Notch in January

Builder confidence in the market for newly built, single-family homes fell one point to 56 in January from a revised December reading of 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
...
All three HMI components declined in January. The index gauging current sales conditions edged one point lower to 62, while the index gauging expectations for future sales fell two points to 60. The index gauging traffic of prospective buyers fell three points to 40.

Looking at the three-month moving averages for regional HMI scores, the Northeast and West each rose four points to 42 and 63, respectively, while the South held steady at 56. The Midwest fell a single point to 58.
emphasis added

Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

“Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead,” said NAHB Chief Economist David Crowe.

by Calculated Risk on 1/16/2014 08:35:00 AM

The DOL reports:

In the week ending January 11, the advance figure for seasonally adjusted initial claims was 326,000, a decrease of 2,000 from the previous week's revised figure of 328,000. The 4-week moving average was 335,000, a decrease of 13,500 from the previous week's revised average of 348,500.

The previous week was revised down from 330,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.

Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 335,000.

The current week (next report) will be the BLS reference period for the employment report.

by Calculated Risk on 1/15/2014 09:05:00 PM

Comment: Extending emergency unemployment benefits has always been a non-partisan issue when so many Americans are unemployed - especially when so many have been unemployed for a long period. Extending the benefits should happen immediately. This is good policy, good economics - and has always received the support of both parties.  Hopefully this will be extended soon.

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decline to 327 thousand from 330 thousand.

• Also at 8:30 AM, the Consumer Price Index for December. The consensus is for a 0.3% increase in CPI in December and for core CPI to increase 0.1%.

• At 10:00 AM, the Philly Fed manufacturing survey for January. The consensus is for a reading of 8.7, up from 7.0 last month (above zero indicates expansion).

• Also at 10:00 AM, the January NAHB homebuilder survey. The consensus is for a reading of 57.5, down from 58.0 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.

by Calculated Risk on 1/15/2014 05:46:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (conventional, REOs, and short sales).  For a long time, not much changed. But over the last 2 years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market, although some of this is due to investor buying.  Other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In December 2013, 18.8% of all resales (single family homes) were distressed sales. This was up from 15.5% last month, and down from 51.5% in December 2012.

The percentage of REOs was at 7.1%, and the percentage of short sales decreased to 11.7%.  The increase in December was seasonal (happens at the end of every year).

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales recently (blue). 

Active Listing Inventory for single family homes increased 44.2% year-over-year in December.  This is the eighth consecutive month with a year-over-year increase in inventory.

Cash buyers accounted for 19.5% of all sales, down from 25.0% a year ago (frequently investors).  This has been trending down, and it appears investors are becoming less of a factor in Sacramento.

Total sales were down 20% from December 2012, but conventional sales were up 33% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

As I've noted before, we are seeing a similar pattern in other distressed areas.  This suggests what will happen in other areas: 1) Flat or declining overall existing home sales, 2) but increasing conventional sales,  3) Less investor buying, 4) more inventory, and 5) slower price increases.