The Chicago Fed National Activity Index: November 2016

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity worsened in November with the index falling to a contraction level of -0.27 from a weak level of -0.05 a month earlier while the three month moving average rose to a level of -0.14.

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.

New Home Sales: November 2016

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for November showing an increase with sales rising 5.2% from October climbing 16.5% above the level seen in November 2015 but still remaining near an historically low level with 592K SAAR units.

The monthly supply declined to 5.1 months while the median selling price declined 3.66% and the average selling price declined 4.49% from the year ago level.

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

Employment Situation: Nonfarm Payrolls and Civilian Unemployment November 2016

The latest Employment Situation Report indicated that in November, net non-farm payrolls increased by 178,000 jobs overall with the private non-farm payrolls sub-component adding 156,000 jobs while the civilian unemployment decreased to 4.6% over the same period.

Net private sector jobs increased 0.13% since last month climbing 1.68% above the level seen a year ago and climbing 5.96% above the peak level of employment seen in December 2007 prior to the Great Recession.

Employment Situation: Unemployment Duration November 2016

The latest employment situation report showed that conditions for the long term unemployed improved in November.

Workers unemployed 27 weeks or more declined to 1.856 million or 24.8% of all unemployed workers while the median term of unemployment declined to 10.1 weeks and the average stay on unemployment declined to 26.3 weeks.

Employment Situation: Total Unemployment November 2016

The latest Employment Situation report showed that in November “total unemployment” including all marginally attached workers decreased to 9.3% while the traditionally reported unemployment rate declined to 4.6%.

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.

Pending Home Sales: October 2016

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for October showing an improvement in sales activity with the seasonally adjusted national index rising 0.1% from September to stand 1.8% above the level seen in October 2015.

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

ADP National Employment Report: November 2016

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 November as private employers added 216,000 jobs in the month bringing the total employment level 1.83% above the level seen in November 2015.

Look for Friday’s BLS Employment Situation Report to likely show, more or less, similar trends.

S&P Core Logic Case-Shiller: September 2016

The latest release of the S&P/Case-Shiller (CSI) home price indices for September reported that the non-seasonally adjusted National index decreased from August with prices falling 0.37% while the non-seasonally adjusted Composite-10 city index decreased 0.12% and the Composite-20 city index decreased 0.13% over the same period.

On an annual basis, the National index increased 5.46% above the level seen in September 2015 while the Composite-10 city index increased 4.28% and the Composite-20 city index increased 5.08% over the same period.

On a peak basis, the non-seasonally adjusted National index just surpassed the record high level seen prior the onset of the great recession rising 0.10% above the level seen in 2006 while the Composite-10 index remained -9.07% below the peak level and the Composite-20 remained -7.14% below.

Reading Rates: MBA Application Survey – November 30 2016

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 10 basis points to 4.14% since last week while the purchase application volume declined 0.2% and the refinance application volume declined 16% 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).

Employment Situation: Nonfarm Payrolls and Civilian Unemployment October 2016

The latest Employment Situation Report indicated that in October, net non-farm payrolls increased by 161,000 jobs overall with the private non-farm payrolls sub-component adding 142,000 jobs while the civilian unemployment decreased to 4.9% over the same period.

Net private sector jobs increased 0.12% since last month climbing 1.78% above the level seen a year ago and climbing 5.81% above the peak level of employment seen in December 2007 prior to the Great Recession.

Employment Situation: Unemployment Duration October 2016

The latest employment situation report showed that conditions for the long term unemployed generally went flat in October.

Workers unemployed 27 weeks or more increased to 1.979 million or 25.2% of all unemployed workers while the median term of unemployment declined to 10.2 weeks and the average stay on unemployment declined to 27.2 weeks.

Employment Situation: Total Unemployment October 2016

The latest Employment Situation report showed that in October “total unemployment” including all marginally attached workers decreased to 9.5% while the traditionally reported unemployment rate declined to 4.9%.

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.

Existing Home Sales Report: September 2016

This week, the National Association of Realtors (NAR) released their Existing Home Sales Report for September showing an increase with total home sales rising 3.2% since August climbing 0.6% above the level seen a year earlier.

Single family home sales also rose with sales climbing 4.1% from August rising 0.6% above the level seen a year earlier while the median selling price increased 5.6% over the same period.

Inventory of single family homes increased, rising 1.1% from August to 1.80 million units, falling 7.2% below the level seen in September 2015 which, along with the sales pace, resulted in a monthly supply of 4.4 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply.

Weekly Unemployment Claims: Initial and Continued October 21 2016

This weeks’s jobless claims report showed a notable increase to initial and a modest increase to continued unemployment claims as seasonally adjusted initial claims remained well below the 300K level.

Seasonally adjusted “initial” unemployment claims increased by 13,000 to 260,000 claims while seasonally adjusted "continued" unemployment claims increased by 7,000 to 2.057 million resulting in an “insured” unemployment rate of 1.5%.

New Residential Construction Report: September 2016

This week's New Residential Construction Report showed mixed results with total permit activity rising 6.3% since August while total starts declined a notable 9.0% over the same period.

Single family housing permits, the most leading of indicators, rose 0.4% from August to 739K single family units (SAAR), rising 4.4% above the level seen a year earlier and still remained well below levels seen at the peak in September 2005.

Single family housing starts rose 8.1% from August to 783K units (SAAR) rising 5.4% above the level seen a year earlier but still remained well below the levels seen at the peak in September 2005.

NAHB/Wells Fargo Home Builder Sentiment: October 2016

This week, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that overall assessments of housing activity generally worsened in October with the composite HMI index falling to 63 while the "buyer traffic" index declined slightly to a level of 46.

Industrial Production and Capacity Utilization: September 2016

This week, the Federal Reserve released their monthly read of industrial production and capacity utilization showing slightly improving results in September with total industrial production rising 0.06% from August but dropping 1.03% below the level seen in September 2015.

Capacity utilization went flat from August dropping 1.38% below the level seen in September 2015 to stand at 75.36%.

It's important to note that industrial production is still showing significant weakness which, if all past periods were to serve at least as a rough guide, now clearly indicates notable trouble for the macro-economy.

Industrial Production and Capacity Utilization: August 2016

Today, the Federal Reserve released their monthly read of industrial production and capacity utilization showing weakening results in August with total industrial production declining 0.43% from July dropping 1.11% below the level seen in August 2015.

Capacity utilization also declined dropping 0.47% from April dropping 1.51% below the level seen in August 2015 to stand at 75.52%.

It's important to note that industrial production is still showing significant weakness which, if all past periods were to serve at least as a rough guide, now clearly indicates notable trouble for the macro-economy.

Retail Sales: August 2016

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing worsening activity in August with sales falling 0.3% from July but rising 1.9% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales declined 0.96% from July and fell 0.16% below the level seen in August 2015 while, adjusting for inflation, “real” discretionary retail sales declined 0.96% on the month and fell 1.05% since August 2015.

The Philly Fed Business Outlook Survey: September 2016

The September release of the Federal Reserve Bank of Philadelphia Business Outlook Survey (BOS) indicated improvement of the regions manufacturing activity with the current activity index rising to a level of 12.8 while assessments the future activity worsened slightly falling to a level of 37.5.

The above chart shows the current and future activity indexes both with their corresponding 3-month moving averages. The red line marks the threshold between contraction and expansion for these diffusion indexes.

The Empire State Manufacturing Survey: September 2016

The Empire State Manufacturing Survey consists of a series of diffusion indices distilled from a monthly survey of New York regional manufacturing executives and seeks to identify trends across 22 different current and future manufacturing related activities.

Today’s report showed an overall improvement for both current and future assessments of manufacturing activity with the current activity index rising to a still contraction level of -1.99 while future activity also increased rising to a level of 35.43.

Current prices paid increased to 16.96 while current new orders declined to -7.45 while assessments of future new orders increased to 31.89.

Weekly Unemployment Claims: Initial and Continued September 15 2016

Today’s jobless claims report showed modest increases to both initial and continued unemployment claims as seasonally adjusted initial claims remained well below the 300K level.

Seasonally adjusted “initial” unemployment claims increased by 1,000 to 260,000 claims while seasonally adjusted "continued" unemployment claims increased by 1,000 to 2.143 million resulting in an “insured” unemployment rate of 1.6%.

ISM Non-Manufacturing Report on Business: August 2016

Yesterday, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity worsened notably in August with the overall non-manufacturing index falling to a weak 51.4 from last months reading of 55.5.

At 51.8 the business activity index also worsened notably since last month.

Construction Spending: July 2016

Today, the U.S. Census Bureau released their latest read of construction spending for July showing generally flattening in spending for residential construction while non-residential spending increased.

On a month-to-month basis, total residential construction spending increased 032% on the month rising 6.97% above the level seen a year earlier but still remained well below the peak level seen in 2006.

Single family construction spending declined a slight 0.015% on the month rising 9.62% above the level seen a year earlier but still remained well below it's peak level reached in 2006.

Non-residential construction spending increased 1.67% on the month climbing 7.60% above the level seen a year earlier and surging well above the level reached at the peak of the Great Recession in 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.

ISM Manufacturing Report on Business: August 2016

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity worsened notably in August with the overall PMI falling into contraction.

At 49.4 the purchasing manager’s composite index (PMI) declined 6.08% from July and slumped over 6% below the level seen a year earlier.

Weekly Unemployment Claims: Initial and Continued September 01 2016

Today’s jobless claims report showed an increase to both initial and continued unemployment claims as seasonally adjusted initial claims remained well below the 300K level.

Seasonally adjusted “initial” unemployment claims increased by 2,000 to 263,000 claims while seasonally adjusted "continued" unemployment claims increased by 14,000 to 2.159 million resulting in an “insured” unemployment rate of 1.6%.

Pending Home Sales: July 2016

Yesterday, the National Association of Realtors (NAR) released their Pending Home Sales Report for July showing an improvement in sales activity with the seasonally adjusted national index rising 1.3% from June to stand 1,4% above the level seen in July 2015.

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

ADP National Employment Report: August 2016

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 August as private employers added 177,000 jobs in the month bringing the total employment level 1.92% above the level seen in August 2015.

Look for Friday’s BLS Employment Situation Report to likely show, more or less, similar trends.

NAHB/Wells Fargo Home Builder Sentiment: August 2016

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that overall assessments of housing activity generally went flat in August with the composite HMI index remaining increasing to 60 while the "buyer traffic" index declined to a level of 44.