New Home Sales: May 2014

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for May showing a notable improvement with sales climbing 18.6% from April rising a whopping 16.9% above the level seen in May 2013 but still remaining near an historically low level with 504K SAAR units.

The monthly supply declined to 4.5 months while the median selling price increased 6.94% and the average selling price increased 1.66% from the year ago level.

The following chart show the extent of sales decline to date (click for full-larger version).

S&P/Case-Shiller: April 2014

Today's release of the S&P/Case-Shiller (CSI) home price indices for April reported that the non-seasonally adjusted Composite-10 price index increased with prices climbing 1.02% from March while the Composite-20 index rose 1.15% over the same period.

The 10-city composite index increased 10.84% as compared to April 2013 while the 20-city composite increased 10.82% over the same period.

Both of the broad composite indices still show significant peak declines slumping -19.01% for the 10-city national index and -18.31% for the 20-city national index on a peak comparison basis.

The Chicago Fed National Activity Index: May 2014

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that the national economic activity strengthened in May with the index rising to a very weak level of 0.21 from a level of -0.15 in April while the three month moving average worsened to a weak level of 0.18.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

Reading Rates: MBA Application Survey – June 11 2014

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 7 basis points to 4.23% since last week while the purchase application volume increased 9% and the refinance application volume increased 11% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

SNAP Food Stamp Participation: March 2014

As a logical consequence of the prolonged economic downturn, participation in the federal food stamp program is continuing to rise.

The latest data released by the Department of Agriculture indicated that in March, 79,476 individual recipients were removed from the food stamps program with the current total declining 3.41% on a year-over-year basis.

Individuals receiving food stamp benefits declined to 46.09 million which, as a ratio of the overall civilian non-institutional population now stands at a whopping 18.69% of the population.

Households receiving food stamps benefits went flat at 22.47 million households with the current total falling 2.76% below the level seen a year earlier

Total nominal benefit cost declined 8.93% on a year-over-year basis to $5.77 billion for the month.

Employment Situation: Nonfarm Payrolls and Civilian Unemployment May 2014

The latest Employment Situation Report indicated that in May, net non-farm payrolls increased by 217,000 jobs overall with the private non-farm payrolls sub-component adding 216,000 jobs while the civilian unemployment rate went flat at 6.3% over the same period.

It's important to note that with today's release (and revisions), the private non-farm payroll level has risen to the highest level seen in over six years and finally climbed higher then the level seen before the start of the Great Recession.

Net private sector jobs increased 0.19% since last month climbing 2.07% above the level seen a year ago and climbing 0.8% above the peak level of employment seen in December 2007 prior to the Great Recession.

Employment Situation: Unemployment Duration May 2014

Today's employment situation report showed that conditions for the long term unemployed improved in May while still remaining distressed by historic standards.

Workers unemployed 27 weeks or more declined to 3.374 million or 34.6% of all unemployed workers while the median term of unemployment declined to 14.6 weeks and the average stay on unemployment went declined to 34.5 weeks.

Looking at the charts below (click for super interactive versions) you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.

Employment Situation: Total Unemployment May 2014

Today's Employment Situation report showed that in May “total unemployment” including all marginally attached workers declined to 12.2% while the traditionally reported unemployment rate went flat at 6.3%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

Weekly Unemployment Claims: Initial and Continued June 05 2014

Today’s jobless claims report showed an increase to initial unemployment claims and a decline to continued unemployment claims as seasonally adjusted initial claims hovered very near the 300K level.

Seasonally adjusted “initial” unemployment claims increased 8,000 to 312,000 claims from 304,000 claims for the prior week while seasonally adjusted “continued” claims declined by 20,000 to 2.603 million resulting in an “insured” unemployment rate of 2.0%.

ADP National Employment Report: May 2014

Yesterday, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in May as private employers added 179,000 jobs in the month bringing the total employment level 2.06% above the level seen in May 2013.

Look for Friday’s (possibly postponed) BLS Employment Situation Report to likely show somewhat similar trends.

Reading Rates: MBA Application Survey – June 04 2014

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) decreased 4 basis points to 4.16% since last week while the purchase application volume declined 4% and the refinance application volume declined 3% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Construction Spending: April 2014

Today, the U.S. Census Bureau released their latest read of construction spending showing mixed results for April with total private construction spending and single family construction spending rising since March while non-residential construction spending declined over the same period.

On a month-to-month basis, total residential spending increased 0.10% from March climbing 17.2% above the level seen in April 2013 and remaining well below the peak level seen in 2006.

Single family construction spending increased 1.30% from March rising 14.50% since April 2013 remaining well below it's peak level reached in 2006.

Non-residential construction spending declined 0.10% from March but rose 5.60% above the level seen in April 2012 and remaining a well below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.