Thursday
Feb212013

Philly Fed Weaker Than Expected

Today's release of the February Philly Fed report came in weaker than expected.  While economists were expecting a reading of 1.1, the actual reading came in at -12.5.  Without trying to sugarcoat today's release, we would note that the Philly Fed is a volatile report, where the actual monthly reading routinely either exceeds or misses the consensus forecast by more than ten points.  In fact, in each of three prior reports the actual reading either exceeded or missed forecasts by at least eleven points.  That being said, there is no escaping the fact that today's report was weak.  As shown in the table to the right, only four of the index's nine subcomponents were positive.  Making matters worse, the most positive subcomponent of them all was Prices Paid.

The chart below shows the headline Philly Fed report going back to 1980.  This morning's reading for February was the lowest since June.  As long as the headline index can stay above negative 12.8, the trend of higher lows from the recession lows will remain in place.  Keep your fingers crossed!

The charts below show the historical readings of each of the Philly Fed's nine subcomponents.  Like the headline index, most of these components have maintained the trend of higher lows that has been in place in the post recession period.

Thursday
Feb212013

Jobless Claims Higher Than Expected

Initial jobless claims for the latest week came in modestly higher than expected today.  While economists were looking for in increase to 355K, the actual level came in at 362K.  Yes, the level was higher than expected, but the spread was small to say the least.

This week's increase in claims brought the four-week moving average up to a level of 360.8K, which is nearly 10K above the post-recession low we saw in this indicator two weeks ago.  Next week the four-week moving average will drop 371K from the four-week count, so barring another increase in the weekly number, we should see the four-week moving average decrease.

On a non-seasonally adjusted basis, claims dropped by nearly 15K.  This is the lowest level for the current week since 2008, but it was only a modest decrease from last week's level.

Thursday
Feb142013

Initial Jobless Claims Surprise to the Downside

After two straight weeks of higher than expected increases, initial jobless claims surprised to the downside earlier this morning, falling from 368K down to 341K.  As highlighted in the chart below, the trend in jobless claims since Hurricane Sandy more than three months ago continues to mimic what we saw back in 2005 following Hurricane Katrina.

Even though claims fell this week, the four-week moving average actually saw a modest increase, rising from 351K up to 352.5K.  Barring another drop in claims next week, we can expect to see the four-week moving average increase again as the week falling off the count was a level of 330K.

The most impressive aspect of today's initial claims report was the non-seasonally adjusted number, which fell from 388.4K down to 359.4K.  For the current week, this level is the lowest we have seen since 2006, and it's well below the average we have seen for the current week going back to 2000 (418.4K).  Regular followers of this report may remember that in most weeks the non-seasonally adjusted claims number has been the lowest since 2007.  Therefore, this week's break of the 2007 threshold could be the beginning of a positive trend.

Thursday
Feb072013

Initial Jobless Claims Rise for Second Straight Week

Initial jobless claims came in higher than expected for the second week in a row today.  While economists were looking for a level of 360K, the actual number came in slightly higher at 366K.  After dropping as low as 330K two weeks ago, claims have seen a moderate increase in the last two weeks.  The increase is not entirely a surprise though.  Two weeks ago, we noted that based on the Katrina/Sandy comparison, we were expecting to see claims drift higher in the coming weeks.

Even though weekly claims have risen for the last two weeks, the four-week moving average has actually declined.  In fact, the four-week average for claims is currently at a post-recession low of 350.5K.  That being said, unless claims drop back down to the 330K level next week, the four-week moving average will begin to increase.

On a non-seasonally adjusted basis, initial claims rose to 386.2K.  This is the lowest level for this specific week since 2008, and it's below the historical average of 427.9K for the current week.

Tuesday
Feb052013

ISM Services Index Slightly Better Than Expected

Today's release of the ISM Services index for January (55.2) showed a modest decline from December (55.7), but it still managed to beat expectations by a slim margin (55.0).  Looking at both the ISM Manufacturing and ISM Services index on a combined basis shows that business activity during the month of January weakened a bit, falling from 55.4 down to 54.6.

The table below shows the change in the headline index and each of the ISM Services sub-components relative to December and January of last year.  Although the headline index declined this month, six out of ten sub-components actually increased during the month.  The employment component was especially notable as that rose to its highest level since February 2006!  Relative to last year at this time, the numbers were less robust, as the headline index and six out of ten subcomponents are down compared to last January.  Click here for charts of each sub-component.

Thursday
Jan242013

Jobless Claims Drop to a Five Year Low

Jobless claims came in considerably better than expected for the second straight week today.  While economists were looking for claims to rise to 460K, the actual reading came in at 430K.  This was down 5K from last week, and it was the lowest reading since January 2008.  Looking at the chart below, the trend in claims over the last several weeks following Hurricane Sandy has continued to follow the pattern of claims in the period following Huricane Katrina in 2005.  If the pattern continues, look for claims to drfit higher in the weeks and months ahead.

With today's drop in the weekly reading, the four-week moving average of jobless claims also fell to 351.8K.  This represents a new post-recession low, and it is the lowest level since March 2008.

Looking at initial claims on a non-seasonally adjusted (NSA) basis, today's report was not as positive.  As shown in the chart below, claims dropped from 556.7K down to 436.8K.  Although this is a large decline, it is typical to see claims decline at this time of year.  Furthermore, while this week's NSA reading in claims for this week is below the average for this particular week going back to 2000, last year at this time NSA claims were actually lower.

Thursday
Jan172013

Housing Starts and Building Permits Hit Multi-Year Highs

This morning's release of Housing Starts and Building permits for the month of December came in at their highest levels since the Summer of 2008.  While Building Permits actually came in slightly lower than expectations (903K vs. 905K), Housing Starts exceeded expectations by a wide margin (954K vs. 890K).  The charts below show Building Permits and Housing Starts in terms of both their levels and their year over year change (%).  As shown, Housing Starts rose by 36.8% y/y while building permits rose by 28.8% y/y.  For both of these indicators, y/y growth has been in the double-digits for 15 straight months.  Finally, while the numbers reported in today's release seem impressive based on the last several months worth of data, we would note that the levels of both indicators are closer to their historical lows than their historical highs. 

Thursday
Jan172013

Philly Fed Follows New York Into Negative Territory

Similar to its next door neighbor in New York, today's release of the Philadelphia Fed report for January was both negative and weaker than expected.  With consensus expectations calling for a level of 6.0, the actual reading came in at -5.8.  Although today's reading was negative, this indicator is rather volatile, so we would not put too much weight into readings that are below 10 on either side of zero.  

The individual components of the report were weak as well.  Of the nine sub-components to the report, seven were below zero.  Only Shipments and Prices Paid were above zero. The positive readings in Prices Paid for both the Philadelphia and Empire Manufacturing reports is noteworthy, if for no other reason than the fact that it is at odds with both the CPI and PPI reports, which were both at zero or below in their latest reads.

Thursday
Jan172013

Lowest Jobless Claims Reading Since January 2008

Initial jobless claims fell from 372K down to 335K in the last week, hitting their lowest level since January 2008.  Looking at the chart below, it is interesting to note that just as claims spiked and then hit a new multi-year low following Hurricane Katrina, they seem to be following a similar path in the aftermath of Hurricane Sandy.  If the pattern continues, look for claims to rise moderately in the next several weeks.

Interestingly, even though weekly claims saw a large drop this week, the four-week moving average did not make a new post-recession low.  At a current level of 359.3K, the four-week moving average is still slightly above the low of 359K that we saw two weeks ago. That being said, barring a complete reversal of this week's drop next week, new lows in the four-week moving average are just around the corner.

On a non-seasonally adjusted (NSA) basis, jobless claims rose by less than 3K to 555.7K.  While this is much higher than the seasonally adjusted reading, it is typical to see NSA claims near 52-week highs at this time of year.  In fact, for the current week NSA claims are at their lowest levels since 2008, and they remain well below their average of 629K for this time of year.

 

Wednesday
Jan162013

NAHB Index Weaker Than Expected For First Time Since April

This morning's release of the NAHB Homebuilder sentiment index came in unchanged from December (47), and was the first weaker than expected reading since last April.  That being said, in April 2012, the index was at 24, while today it is nearly twice that level (47).  The table to the right breaks out the NAHB Homebuilder index based on each of its components and regions.

While present sales were unchanged this month, homebuilders are seeing a decline in future sales even as traffic improved to its best level since April 2006.  Due likely in part to the onset of winter, builders were less optimistic in the Northeast and Midwest, and more optimistic in the South and the West.

Tuesday
Jan152013

Empire Manufacturing Starts off the Year Slow

Manufacturing in the state of New York started off the year on a slow note as the January Empire Manufacturing report came in weaker than expected (-7.8 vs. 0.0) this morning.  This is now the sixth month in a row where this indicator has been below zero.  The table to the right lists the current conditions as well as the outlook six months out for the headline index and each of the index's subcomponents.  As shown, this month's report was weak across the board.  The only two components that were above zero were Prices Paid and Prices Received.  Looking out six months from now, manufacturers in New York are a lot more optimistic (not surprisingly), as none of the components are below zero.

The top chart below shows the General Business Index of the Empire Manufacturing index for current conditions and six months out.  Interestingly, even as the current conditions component has been declining, the outlook six months out has been improving.  The current spread between the two indices is the widest it has been since April 2012.  Let's hope that manufacturers are not getting overly optimistic and actually have reason to be more optimistic.

The second chart below shows the outlook for capital expenditures and technology spending over the next six months.  As shown, both indices have been in multi-month downtrends.  In fact, the outlook for capital expenditures (4.3) is the lowest since July 2009.

Thursday
Jan102013

Jobless Claims Increase Modestly

Initial jobless claims for the latest week showed a modest increase, rising from 367K to 371K.  Even though the increase was modest, the current level is now the highest since the last week of November, so there has been a slow creep up.  In fact, in each of the last four weeks, claims have shown increases.

On four-week moving average basis, claims rose 365.8K, which was up 6.8K from last week's post-recession low of 359K.

Finally, on a non-seasonally adjusted basis, jobless claims saw a huge increase of just under 62K, rising to 552K.  While this increase may seem large, you have place the move in context with other years where claims typically rise during the first week of January.  In fact, for the current week claims were the lowest since 2008, and well below the average of 615.5K going back to 2000.

Thursday
Jan032013

Jobless Claims Rise, But Still Trending Lower

Initial jobless claims for the latest week were released earlier this morning and showed a modest increase over last week's upwardly revised figure (372K vs. 362K).  Today's reading was also higher than the consensus forecast of 360K.

The four-week moving average was essentially unchanged this week at 360K, which is a post-recession low.

On a non-seasonally adjusted (NSA) basis, jobless claims rose from 440.9K up to 495.6K.  This may sound like a large increase, but it is typical to see claims rise following the Christmas holiday.  In fact, this week's reading is the lowest for the current week going all the way back to 2005, and well below the historical average of 559K for the current week going back to 2000.

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Wednesday
Jan022013

ISM Manufacturing Back Above 50

This morning's release of the ISM Manufacturing report for December came in better than expected (50.7 vs. 50.5) and moved back into growth territory with a reading above 50.  The table below shows the current reading of the ISM Manufacturing and each of its ten subcomponents relative to last month and one year ago.  While today's reading was only slightly above 50, seven of the ten subcomponents were above fifty and seven also showed improvement relative to last month.  Compared to last year, though, the results were a little less robust.  For both the headline index and six out of ten subcomponents, December 2012 was weaker than December 2011.

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Thursday
Dec272012

Jobless Claims Make a Post Recession Low

Jobless claims fell by 12K down to 350K from last week's level of 362K.  While the weekly number is not the lowest level we have seen during this recession, jobless claims are clearly trending lower following the post-Sandy spike.

With this week's decline, the four-week moving average of claims fell to 356.8K from last week's level of 368K.  After 38 straight weeks without making a new post-recession low, the four-week moving average finally ended its longest streak of weeks without a new low so far in this recession.

On a non-seasonally adjusted (NSA) basis, initial claims rose from 401.4K to 440.9K.  While this increase may seem large, it is typical to see a large increase in claims at this time of year.  In fact, for the current week, non-seasonally adjusted jobless claims have not been this low since the same week in 2006, and they're well below their historical average for the current week going back to 2000 (495.1K).

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Thursday
Dec202012

Jobless Claims Rise More Than Expected

Initial jobless claims rose slightly more than expected this week, coming in at a level of 361K versus expectations of 360K.  Regardless of the increase, it appears as though jobless claims have now worked themselves back into a normal range following the impact of Hurricane Sandy.

This week, the four-week moving average dropped to 367.8K from last week's reading of 381.5K.  While it isn't quite there yet, the four-week moving average is finally getting back near its post-recession low of 363K, which is a level that we haven't seen in 38 weeks now.  Barring any revisions or an increase above 375K next week, we could finally see a new post-recession low in this number next week.

 On a non-seasonally adjusted basis, jobless claims fell to 400.4K from last week's reading of 429.2K.  For the current week, this represents the lowest reading in this indicator since 2007, and it is below the average of 441.5K for the current week dating back 2000.

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Wednesday
Dec192012

New Home Sales Weaker Than Expected

Housing starts for the month of November came in slightly weaker than expected this morning (861K vs 871K) and declined slightly from last month's level of 888K.  In the charts below, we show the changes in housing starts going back to 1959 on both an absolute (left side) and year over year basis (right side).  In both sets of charts, recessions are highlighted in gray.  In terms of the breakdown between single and multi family units, single family units (down 24K units) accounted for the bulk of the drop which is considered a modest negative.  On a year over year basis, housing starts rose by 21.6%, but here we saw stronger growth relative to last year in single family units versus multi family units.
The charts below show changes in Housing Starts on a regional basis.  Starts were weakest in the West where we saw nearly a 20% decline from 213K last month to 172K in November.  In the Midwest and Southern regions, Housing Starts actually bucked the broader trend and saw modest growth of 3%.  With memories of the housing bust still fresh in investors minds, today's drop in starts may cause some to think that we are on the verge of another decline, but it is important to remember the old adage that one month does not make a trend.

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Tuesday
Dec182012

NAHB Sentiment Index Hits Six and a Half Year High

Today's release of the December NAHB Housing Sentiment Survey was inline with expectations (47), which was enough to send the index to its highest level in more than six and a half years.

As shown in the table to the right, although Future Sales were down marginally, Present Sales rose above 50 for the first time since April 2006.  It was also the first time since early 2006 that both Present and Future Sales were above 50.

In terms of regions, the Northeast saw a big bounce back from last month's Sandy depressed level of 30, but the region still remains the weakest in the country.  The Midwest is still the only region where sentiment is above 50.

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Thursday
Dec132012

Initial Jobless Claims Post Fourth Straight Weekly Drop

With a decline of 29K claims in the latest week, initial jobless claims have now declined for four straight weeks, erasing all of the increase seen since Hurricane Sandy.  At a level of 343K, jobless claims are now at their lowest level since October 5th.  Furthermore, with a decline of 108K over the last four weeks, jobless claims have now more than erased the 90K spike we saw in the aftermath of Sandy.

As a result of this week's large decline in jobless claims, the four-week moving average declined by 27K, which was the largest one-week decline in this measure since August 1992.  In spite of the large decline, though, the four-week moving average remains 18.5K above its post-recession low of 363K.  It has now been 37 weeks since the four-week moving average made its last low.

 On a non-seasonally adjusted basis, jobless claims declined from 500.9K down to 428.8K.  For the current week, this is the lowest level since 2007, and it's below the average for the current week going back to 2000 (464.1K).

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Wednesday
Dec052012

ISM Services Surprises to the Upside

Today's release of the ISM Non Manufacturing report for November came in better than expected (54.7 vs. 53.5) and was the best level since March.  Combining both the ISM Manufacturing and Non-Manufacturing reports based on their weights in the economy, the combined reading came in at 54.1, which is a modest increase from last month's reading of 53.7. 

The table below breaks down ISM Non-Manufacturing based on each of its ten sub-components and compares them to their levels from last month and one-year ago.  Currently, seven out of ten components are above the 50 level, while Supplier Deliveries, Inventories, and Export Orders are the only three below 50.  Relative to a month ago, six out of ten subcomponents increased, led by Import Orders and Business Activity.  Prices saw the biggest decline from 65.6 down to 57.0.  Given the volatility that we see in the Prices component, this month's decline was only the largest since April.  The employment component saw the second largest decline during the month, and while that component fell by considerably less than Prices Paid (4.6 vs. 8.6), it was the largest decline for the Employment component since March 2009.  Relative to one year ago, even though the headline index increased from 52.6 to 54.7, only four components of the ISM Non Manufacturing Index increased relative to a year ago.

 

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