ISM Non-Manufacturing Report on Business: February 2016

Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity went flat in February with the overall non-manufacturing index falling to 53.4 from last months reading of 53.5.

At 57.8 the business activity index improved significantly since last month but still dropped 2.69% below the level seen a year earlier.

Weekly Unemployment Claims: Initial and Continued March 03 2016

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

Seasonally adjusted “initial” unemployment claims increased by 6,000 to 278,000 claims while seasonally adjusted "continued" unemployment claims increased by 3,000 to 2.257 million resulting in an “insured” unemployment rate of 1.7%.

ADP National Employment Report: February 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 February as private employers added 214,000 jobs in the month bringing the total employment level 2.08% above the level seen in February 2015.

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

Reading Rates: MBA Application Survey – March 02 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) declined 4 basis points to 3.75% since last week while the purchase application volume decreased 1% and the refinance application volume decreased 7% 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: January 2016

Today, the U.S. Census Bureau released their latest read of construction spending showing mixed results January with total private residential construction spending going flat, non-residential construction spending rising and single family residential construction spending falling on the month.

On a month-to-month basis, total residential construction spending went flat with an increase of just 0.01% on the month but rising 7.7% above the level seen a year earlier while still remaining well below the peak level seen in 2006.

Single family residential construction spending declined, dropping 0.2% on the month but rising 6.6% above the level seen a year earlier while remaining well below it's peak level reached in 2006.

Non-residential construction spending increased 1% on the month and rose 11.5% above the level seen a year earlier but still remained 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.

ISM Manufacturing Report on Business: February 2016

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity remained weak in February continuing to contract for a fifth consecutive month.

At 49.5 the purchasing manager’s composite index (PMI) rose 2.7% from January but slumped 6.43% below the level seen a year earlier giving a solid indication of contraction for manufacturing.

The Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey: February 2016

Today, the Federal Reserve Bank of Dallas released their latest read on manufacturing in their region indicating that assessments of manufacturing activity remained in contraction in February with the current general business activity index improving slightly to a recessionary level of -31.8 while the future general business activity index improved to a weak lecel of -2.1.

These results are an indication (consistent with other regional and national manufacturing activity data-points) that the U.S. manufacturing sector has clearly slumped into recessionary levels as of late and provides yet another likely harbinger of what is to come in 2016 for the general economy.

Pending Home Sales: January 2016

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for January showing that pending home sales declined with the seasonally adjusted national index falling a notable 2.5% from December to stand 1.4% above the level seen in January 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).

GDP: Q4 2015 (Second Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q4 2015 GDP report showing that the economy grew weakly in the fourth quarter with real GDP improving at an annualized rate of 1.0% from Q3 2015.

On a year-over-year basis, real GDP increased 1.8% while the quarter-to-quarter non-annualized percent change was an increase of 0.25%.

Notable categories of weakness include, Nonresidential investment in fixed structures and equipment which declined at 1.9%, Exports of goods which declined at 5.8%, while notable categories of strength include Personal Consumption Expenditures which increased at 2.0% and residential fixed investment which increased 8.0%.

Kansas City Fed Manufacturing Survey: February 2016

The Federal Reserve Bank of Kansas City, like other district FRBs (New York, Philadelphia, Richmond and Dallas), tracks its region’s manufacturing activity by surveying a number of important indicators such as general activity, production, shipments, orders, employment and prices for raw materials and finished products.

The latest results are indicating that the assessments of manufacturing activity continued to indicate contraction falling to a level of -12 in February with ALL component measures declining on the month.

It's important to note that the current level of the Composite index is roughly equivalent to the level seen during the middle of the Great Recession seemingly indicating, yet again, that our current expansion has drawn to a close.

FHFA Monthly Home Prices: December 2015

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in December, nationally, home prices increased 0.45% from November rising 5.6% above the level seen in December 2014.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

Advance Report on Durable Goods Shipments, Inventories and Orders: January 2016

Today, the U.S. Census Department released its advanced monthly Durable Goods Manufacturers’ Shipments, Inventories and Orders Report for January showing new orders for durable goods improved notably rising 4.9% from December and rising 1.75% above the level seen in January 2015.

Much of the strength came from the sub-components of new orders of non-defense aircraft parts (up 54.42) and communications equipment (up 9.6%).

Weekly Unemployment Claims: Initial and Continued February 25 2016

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 10,000 to 272,000 claims while seasonally adjusted “insured” claims declined by 19,000 to 2.253 million resulting in an “insured” unemployment rate of 1.7%.

New Home Sales: January 2016

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for January showing sales declined a notable 9.2% from December falling 5.2% below the level seen in January 2015 and remaining near an historically low level with 494K SAAR units.

The monthly supply increased to 5.8 months while the median selling price declined 4.52% and the average selling price increased 2.72% from the year ago level.

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

Reading Rates: MBA Application Survey – February 24 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 4 basis points to 3.79% since last week while the purchase application volume increased 2% 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).