Pending Home Sales: May 2016

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for May showing a notable pullback in sales activity with the seasonally adjusted national index falling 3.7% from April to stand 0.2% below the level seen in May 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).

Reading Rates: MBA Application Survey – June 29 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 1 basis points to 3.70% since last week while the purchase application volume declined 3% and the refinance application volume declined 2% 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).

S&P/Case-Shiller: April 2016

The latest release of the S&P/Case-Shiller (CSI) home price indices for April reported that the non-seasonally adjusted National index increased from March with prices rising 1.05% while the non-seasonally adjusted Composite-10 city index increased 0.99% and the Composite-20 city index increased 1.11% over the same period.

On an annual basis, the National index increased 5.03% above the level seen in April 2015 while the Composite-10 city index increased 4.89% and the Composite-20 city index increased 5.44% over the same period.

On a peak basis, all three indices still show significant peak declines slumping -3.21% for the National index, -11.27% for the Composite-10 city index and -9.63% for the Composite-20 city index on a peak comparison basis.

The Richmond Fed Survey of Manufacturing Activity: June 2016

Yesterday, the Federal Reserve Bank of Richmond released their Survey of Manufacturing Activity for June showing that the composite index, the broadest measure of manufacturing activity, worsened notably falling to a level of -7 from a level of -1 the prior month.

The most notable component measures also showed similar results with a weak Shipments level of -3, New Orders falling to -14 and Backlog of Orders falling to -17.

The Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey: June 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 June with the current general business activity index rising to a recessionary level of -18.3 while the future general business activity index also improved to a weak level of 2.6.

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.

Buy British!

What a great day for the people of the United Kingdom and what a wonderfully sweat and rare victory for sensible and responsible people everywhere.

I have to admit that I had my doubts that we would see a "Leave" outcome given (1) how long the U.K. has been within the EU, (2) all the fear mongering coming from the professional political class and the onslaught of "Nobel Laureate" economists, and (3) the distorting effects coming from the horrendous murder of MP Jo Cox.

BUT... the U.K. showed a level of courage that is nothing short of astonishing particularly considering how much "safer" it would have been to simply bend to the status quo,

WOW! Sociopathic statist elites everywhere must be quaking in their boots!

I got to thinking today that the U.K. is going to need our support particularly during their transition out of the EU when they will likely be most vulnerable to the thrashings that are bound to come from a Brussels seeking to make an example to other member states who dare to leave.

So, I say "Buy British"!

To that end, here is a great website for perusing British brands and buying British products and it even includes a pretty active blog on the subject including today's very interesting post on Brexit.

Possibly there are better ideas... travel, bonds, the pound even... who knows but even a token gesture seems sensible as the Brits deserve our support... they are a brave and inspiring people.

The Chicago Fed National Activity Index: May 2016

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity worsened in May with the index falling to a contraction level of -0.51 from a weak positive level of 0.05 a month earlier while the three month moving average weakened to a level of -0.36.

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: May 2016

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for May showing a decline with sales falling 6.0% from April but climbing 8.7% above the level seen in May 2015 and still remaining near an historically low level with 551K SAAR units.

The monthly supply increased to 5.3 months while the median selling price declined 9.3% and the average selling price declined 5.3% from the year ago level.

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

Weekly Unemployment Claims: Initial and Continued June 23 2016

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

Seasonally adjusted “initial” unemployment claims declined by 18,000 to 259,000 claims while seasonally adjusted "continued" unemployment claims declined by 20,000 to 2.142 million resulting in an “insured” unemployment rate of 1.6%.

Existing Home Sales Report: May 2016

Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report for May showing a notable increase with total home sales rising 1.8% since April climbing 4.5% above the level seen a year earlier.

Single family home sales also rose with sales climbing 1.9% from April rising 4.7% above the level seen a year earlier while the median selling price increased 4.6% over the same period.

Inventory of single family homes increased, rising 1.6% from April to 1.90 million units, falling 6.4% below the level seen in May 2015 which, along with the sales pace, resulted in a monthly supply of 4.7 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.

FHFA Monthly Home Prices: April 2016

Yesterday, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in March, nationally, home prices increased 0.23% from March rising 5.87% above the level seen in March 2015.

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.

Reading Rates: MBA Application Survey – June 22 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 3 basis points to 3.69% since last week while the purchase application volume declined 2% and the refinance application volume increased 2.9% 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).

SNAP Food Stamp Participation: March 2015

As a logical consequence of the prolonged weak economic conditions, participation in the federal food stamp program remains at historic levels.

The latest data released by the Department of Agriculture indicated that in March, 38,667 individual recipients were removed to the food stamps program with the current total declining 2.84% on a year-over-year basis.

Individuals receiving food stamp benefits declined to 44.34 million which, as a ratio of the overall civilian non-institutional population now stands at a whopping 17.54% of the population.

Households receiving food stamps benefits increased to 21.92 million households with the current total falling 2.52% below the level seen a year earlier

Total nominal benefit cost declined 3.33% on a year-over-year basis to $5.59 billion for the month.

Brexit or Bust!

Listening to Professor Alan Sked address the LSE on his support for leaving the European Union, it's clear that this is a rare and critical moment in history where a population of largely free people can utilize the most basic democratic function of a popular referendum to reverse decades of propaganda and coercion and shove a corrupt system of central command-and-control straight up the rear-end of their super-state bureaucratic overloads.

If having the U.S.'s own statist-in-chief President Obama (a supposed "leader" who has a big Federal Government policy solution for virtually any and all "problems") make a special visit to the U.K. just to wag his finger at its citizens lecturing and fear mongering in support of staying in the EU didn't make you reflexively reach for the "LEAVE" lever, listening to Professor Sked enumerate the litany of clear reasons for the U.K. to regain its national sovereignty will surely do the trick.

Frankly, I have yet to hear even ONE argument for staying in the EU that couldn't be made identically for every other independent nation.... why not make the same arguments for Canada joining the EU... or the U.S.?? .. why don't ALL nations of the world simply join the EU so we can all share the great benefits of being within its one free trade zone while "benefiting" from its "superior" standards, regulatory environment and freedom of immigration?

Obviously, that is absurd and so is a defacto notion that the U.K. should stay in the EU.

Industrial Production and Capacity Utilization: May 2016

Today, the Federal Reserve released their monthly read of industrial production and capacity utilization showing weakening results in May with total industrial production declining 0.42% from April dropping 1.4% below the level seen in May 2015.

Capacity utilization also declined dropping 0.43% from April dropping 2.19% below the level seen in May 2015 to stand at 74.937%.

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.

The Empire State Manufacturing Survey: June 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 level of 6.01 while future activity also improved to a level of 34.84.

Current prices paid rose to 18.37 while current new orders increased to 10.9 and assessments of future new orders rose to 38.24.

Reading Rates: MBA Application Survey – June 15 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 7 basis points to 3.72% since last week while the purchase application volume declined 5% and the refinance application volume declined 1% 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).

Weekly Unemployment Claims: Initial and Continued June 09 2016

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

Seasonally adjusted “initial” unemployment claims declined by 4,000 to 264,000 claims while seasonally adjusted "continued" unemployment claims declined by 77,000 to 2.095 million resulting in an “insured” unemployment rate of 1.5%.

Labor Market Conditions Index: May 2016

Today, the Federal Reserve released their latest read on Labor Market Conditions showing that conditions worsened in May with the index falling to a weak level of -4.8 from April's reading of -3.4.

The Labor Market Conditions Index (LMCI) is a recent innovation by the Fed, conveniently incorporating the latest dynamics of 19 different labor market indicators into one simple series which has become a favorite economic measure for many labor market watchers, including the current Fed Chair Janet Yellen.

The chart above displays the LMCI alongside the monthly change to the Labor Department's Total Nonfarm Payrolls series (a constituent of the LMCI).

ISM Non-Manufacturing Report on Business: May 2016

Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity worsened notably in May with the overall non-manufacturing index falling to 52.9 from last months reading of 55.7.

At 55.1 the business activity index weakened since last month falling 7.39% below the level seen a year earlier.

Employment Situation: Nonfarm Payrolls and Civilian Unemployment May 2016

Today's Employment Situation Report indicated that in May, net non-farm payrolls increased by only a slight 38,000 jobs overall with the private non-farm payrolls sub-component added just 25,000 jobs while the civilian unemployment remained declined to 4.7% over the same period.

Net private sector jobs increased 0.02% since last month climbing 1.92% above the level seen a year ago and climbing 5.03% above the peak level of employment seen in December 2007 prior to the Great Recession.

Employment Situation: Unemployment Duration May 2016

Today's employment situation report showed that conditions for the long term unemployed generally improved in May.

Workers unemployed 27 weeks or more decreased to 1.885 million or 25.1% of all unemployed workers while the median term of unemployment declined to 10.7 weeks and the average stay on unemployment declined to 25.1 weeks.

Employment Situation: Total Unemployment May 2016

Today's Employment Situation report showed that in April “total unemployment” including all marginally attached workers wen flat at 9.7% while the traditionally reported unemployment rate went flat declined to 4.7%.

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.

ADP National Employment Report: May 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 May as private employers added 173,000 jobs in the month bringing the total employment level 2.04% above the level seen in May 2015.

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

Weekly Unemployment Claims: Initial and Continued June 02 2016

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

Seasonally adjusted “initial” unemployment claims declined by 1,000 to 267,000 claims while seasonally adjusted "continued" unemployment claims increased by 12,000 to 2.172 million resulting in an “insured” unemployment rate of 1.6%.

Construction Spending: April 2016

Today, the U.S. Census Bureau released their latest read of construction spending showing generally worsening results in April with total private residential, private single family residential and private non-residential construction spending all declining on the month.

On a month-to-month basis, total residential construction spending declined 1.5% on the month rising 8.0% 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 0.004% on the month rising 12.9% above the level seen a year earlier but still remained well below it's peak level reached in 2006.

Non-residential construction spending declined 1.5% on the month climbing 3.4% above the level seen a year earlier.

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: May 2016

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity improved slightly in May staying just above the contraction level for a third straight month.

At 51.3 the purchasing manager’s composite index (PMI) increased 0.98% from April but fell 2.84% below the level seen a year earlier.

Reading Rates: MBA Application Survey – June 01 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 2 basis points to 3.77% since last week while the purchase application volume declined 5% and the refinance application volume declined 4% 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).