Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
Wednesday, September 30, 2015
ADP National Employment Report: September 2015
Today, 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 September as private employers added 200,000 jobs in the month bringing the total employment level 2.17% above the level seen in September 2014.
Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
Reading Rates: MBA Application Survey – September 30 2015
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 2 basis point to 3.97% since last week while the purchase application volume declined 6% and the refinance application volume declined 8% 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).
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 2 basis point to 3.97% since last week while the purchase application volume declined 6% and the refinance application volume declined 8% 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).
Tuesday, September 29, 2015
S&P/Case-Shiller: July 2015
On an annual basis, the National index increased 4.69% above the level seen in July 2014 while the Composite-10 city index increased 4.55% and the Composite-20 city index increased 4.96% over the same period.
On a peak basis, all three indices still show significant peak declines slumping 5.15% for the National index, -13.01% for the Composite-10 city index and -11.92% for the Composite-20 city index on a peak comparison basis.
Thursday, September 24, 2015
Weekly Unemployment Claims: Initial and Continued September 24 2015
Today’s jobless claims report showed an increase to initial unemployment claims and a decrease to continued unemployment claims as seasonally adjusted initial claims remained below the 300K level.
Seasonally adjusted “initial” unemployment claims increased by 3,000 to 267,000 claims while seasonally adjusted “insured” claims declined by 1,000 to 2.242 million resulting in an “insured” unemployment rate of 1.7%.
Seasonally adjusted “initial” unemployment claims increased by 3,000 to 267,000 claims while seasonally adjusted “insured” claims declined by 1,000 to 2.242 million resulting in an “insured” unemployment rate of 1.7%.
New Home Sales: August 2015
Today, the U.S. Census Department released its monthly New Residential Home Sales Report for August showing sales jumped a notable 5.7% from July rising 21.6% above the level seen in August 2014 but still remaining near an historically low level with 552K SAAR units.
The monthly supply declined to 4.7 months while the median selling price increased 0.34% and the average selling price declined 0.79% from the year ago level.
The following chart show the extent of sales decline to date (click for full-larger version).
The monthly supply declined to 4.7 months while the median selling price increased 0.34% and the average selling price declined 0.79% from the year ago level.
The following chart show the extent of sales decline to date (click for full-larger version).
The Chicago Fed National Activity Index: August 2015
The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that the national economic activity weakened in August with the index falling to a level of -0.41 from a level of 0.51 in July while the three month moving average improved to a level of 0.02.
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.
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.
Wednesday, September 23, 2015
Reading Rates: MBA Application Survey – September 23 2015
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 2 basis point to 3.99% since last week while the purchase application volume increased 9% and the refinance application volume increased 18% 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).
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 2 basis point to 3.99% since last week while the purchase application volume increased 9% and the refinance application volume increased 18% 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).
Wednesday, September 16, 2015
NAHB/Wells Fargo Home Builder Sentiment: September 2015
Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that overall assessments of housing activity generally improved in September with the composite HMI index climbing to 62 while the "buyer traffic" index rose to a level of 47 from 45 in the prior month.
Overall, conditions for new home construction appear to have remained stable recently but still remain below the peak assessments see prior to the Great Recession.
Overall, conditions for new home construction appear to have remained stable recently but still remain below the peak assessments see prior to the Great Recession.
Reading Rates: MBA Application Survey – September 16 2015
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 1 basis point to 4.00% since last week while the purchase application volume decreased 4% and the refinance application volume declined 9% 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).
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 1 basis point to 4.00% since last week while the purchase application volume decreased 4% and the refinance application volume declined 9% 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).
Friday, September 04, 2015
Employment Situation: Nonfarm Payrolls and Civilian Unemployment August 2015
Today's Employment Situation Report indicated that in August, net non-farm payrolls increased by a by 173,000 jobs overall with the private non-farm payrolls sub-component adding 140,000 jobs while the civilian unemployment rate declined to 5.1% over the same period.
Net private sector jobs increased 0.12% since last month climbing 2.37% above the level seen a year ago and climbing 4.00% above the peak level of employment seen in December 2007 prior to the Great Recession.
Net private sector jobs increased 0.12% since last month climbing 2.37% above the level seen a year ago and climbing 4.00% above the peak level of employment seen in December 2007 prior to the Great Recession.
Employment Situation: Unemployment Duration August 2015
Today's employment situation report showed that conditions for the long term unemployed worsened in August while still remaining distressed by historic standards.
Workers unemployed 27 weeks or more increased to 2.187 million or 27.7% of all unemployed workers while the median term of unemployment increased to 12.1 weeks and the average stay on unemployment increased to 28.4 weeks.
Workers unemployed 27 weeks or more increased to 2.187 million or 27.7% of all unemployed workers while the median term of unemployment increased to 12.1 weeks and the average stay on unemployment increased to 28.4 weeks.
Employment Situation: Total Unemployment August 2015
Today's Employment Situation report showed that in August “total unemployment” including all marginally attached workers declined slightly to 10.3% while the traditionally reported unemployment rate declined to 5.1%.
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.
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.
Thursday, September 03, 2015
Weekly Unemployment Claims: Initial and Continued September 03 2015
Today’s jobless claims report showed an increase to initial unemployment claims and a decrease to continued unemployment claims as seasonally adjusted initial claims remained below the 300K level.
Seasonally adjusted “initial” unemployment claims increased by 12,000 to 282,000 claims while seasonally adjusted “insured” claims declined by 9,000 to 2.257 million resulting in an “insured” unemployment rate of 1.7%.
Seasonally adjusted “initial” unemployment claims increased by 12,000 to 282,000 claims while seasonally adjusted “insured” claims declined by 9,000 to 2.257 million resulting in an “insured” unemployment rate of 1.7%.
Wednesday, September 02, 2015
Irrational Credibility
Interpreting economic events these days is complex to say the least.
Back in the “housing bubble” days (when this blog was originally launched) the story was much simpler… housing was overvalued resulting in an economy that was far too leveraged (dangerously so) to the housing sector and to the irrational belief in the continuation of its exceptional expansion.
It only took a consensus agreement of this fact (in clear contradiction to the prevailing “contained” story promulgated by the Fed) for the wheels to finally come off the cart.
The “tech-boom” of the 90s had a similarly concise story… the enthusiasm for tech stocks got way out of hand (understandably considering the notable technological improvements of the internet and telecommunications in general) and led to price-to-earnings multiples that were clearly irrational.
But today, the irrational exuberance is not over one specific sector or asset class, it concerns a concept with much less tangible and understandable dynamics… it’s over the credibility of Fed itself.
Let’s face it, the “Greenspan Put” model of the Fed, whereby the Fed extends an “easing” hand to the markets every time there is a potentially systemic shock (i.e. Crash of 87, LTCM, post-tech wreck 1% FF rate), took a hideous turn for the worse in the wake of the housing collapse resulting in a string of unprecedented interventions that any rational observer could see would be difficult to reverse or, in the Feds parlance, “normalize”.
The belief that the Fed can, in fact, successfully “normalize” and the associated underlying anxiety that they might NOT be able to bears a strong resemblance to the physiological tug-of-war that was present during the prior housing and tech booms whereby most participants (households, firms, investors) continued to play along even though there was at least some degree, even if very diminished and subconscious, of understanding that circumstances could be out-of-line and that a reversal was possible.
So, in a sense, the ability for the Fed to successfully earn back its credibility by creating room for its traditional policy tool (the Fed Funds rate) and thereby reestablishing some semblance of normalcy is tantamount, conceptually, to housing actually “never going down” or to the tech stock boom actually ushering in the “end of the business cycle”.
That is, it is the best case scenario… the one that avoids the ugly reveal of the truly awry circumstances we all inherently know, even subconsciously, to exist.
That’s not to say that the Fed can’t succeed… but the key here is to acknowledge how high the stakes truly are… this is a pivotal moment to say the least.
If the Fed blinks in September as a result of the recent stock market turmoil and leaves the Fed Funds rate at the zero-bound, that could work (more that any other prior event) towards tipping the collective psychology one major step in the direction of loss in confidence of the Fed.
Also, recent speculation that declining stocks is equivalent to Fed tightening thereby giving the Fed some cover for inaction in the September meeting misses the point entirely.
The Feds ability to build more room in their primary “normal” policy tool has NOTHING to do with the Fed Funds rate’s text-book function and all to do with proving to the world that the Fed is credible and, more importantly, that their ability to “normalize” is truly rational.
ADP National Employment Report: August 2015
Today, 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 August as private employers added 190,000 jobs in the month bringing the total employment level 2.22% above the level seen in August 2014.
Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.
Reading Rates: MBA Application Survey – September 02 2015
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 1 basis point to 4.00% since last week while the purchase application volume increased 4% and the refinance application volume jumped 17% 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).
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 1 basis point to 4.00% since last week while the purchase application volume increased 4% and the refinance application volume jumped 17% 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: July 2015
Yesterday, the U.S. Census Bureau released their latest read of construction spending showing improved results for July with total private construction spending, single family construction spending and non-residential construction spending all increasing over the month.
On a month-to-month basis, total residential spending increased 1.1% from June rising 15.6% above the level seen in July 2014 and remained well below the peak level seen in 2006.
Single family construction spending increased 2.1% from June and rose 15.8% since July 2014 but remaining well below it's peak level reached in 2006.
Non-residential construction spending increased 1.5% from June and rose 18.2% above the level seen in July 2014 but 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.
On a month-to-month basis, total residential spending increased 1.1% from June rising 15.6% above the level seen in July 2014 and remained well below the peak level seen in 2006.
Single family construction spending increased 2.1% from June and rose 15.8% since July 2014 but remaining well below it's peak level reached in 2006.
Non-residential construction spending increased 1.5% from June and rose 18.2% above the level seen in July 2014 but 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.
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