2008-07-17 US Economic Releases


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Housing Starts (Jun)

Survey 960K
Actual 1066K
Prior 975K
Revised 977K

Karim writes:

Starts up 9.1%, due to the following.

*New York City enacted a new set of construction codes

effective for permits authorized as of July 1, 2008. In June there

was a large increase in building permits issued for multifamily

residential buildings in New York City.

Multi-family starts in Northeast up 102.6%.

Single family starts down 9.2% in northeast, and down 5.3% nationally.

Same effect on permits (up 73% for mult-family in northeast).

Single family permits down 3.5% nationally.

Initial claims rise from 348k to 366k.4wk average falls from 381k to 376k.

Continuing claims drop from 3203k to 3122k; 4wk average rises from 3126k to 3142k.

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Building Permits (Jun)

Survey 965K
Actual 1091K
Prior 969K
Revised 978K

James writes:

Total starts were up 9.1% but single family was down -5.3% while multi-fam was up 42.5%. Then look at the regional break down. Multi-fams were up 102.6% m/m in the northeast which apparently has something to do w/ a tax abatement for rushing into some starts and permits in the NY area. Don’t know the details there but what matters to the broader market is that single family starts and permits declined. Less supply to compete w/ tons of inventory is what we want to see so the net/net = positive.

Right, thanks, either way housing starts are muddling around the 1 million mark, down from about 2 million not long ago.

Actual inventories of new homes are falling quickly; so seems to me a shortage is developing.

The weekly applications are steady at levels that used to be associated with maybe 1.5 million annual starts.

Starts peaked at 2.6 million units around 1972 with only about 215 million population.

They can return to 1.5 million pretty quickly, and I’d still consider that a depressed level.

4 week average jobless claims again moved down a bit, as did continuing claims.

Corporate earnings pretty good so far.

Q2 GDP looking like maybe 2% to be released July 31.

Government deficit spending moving up nicely -the tide that’s lifting all boats- and supporting prices/’inflation’ which turns the relative value story into an inflation story.

Dems ready with more fiscal packages to fire off as needed.

While shoes do keep falling, each one seems to do less damage and pass more quickly than the prior bumps. The agencies were the latest, the USD at stake were the largest, and the ‘crisis’ didn’t even last a week.

With stocks on the move there will be more talk within the FOMC of the low Fed Funds rate creating an asset bubble like they think it did in 1999 and 2003.

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Initial Jobless Claims (Jul 12)

Survey 380K
Actual 366K
Prior 346K
Revised 348K

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Continuing Jobless Claims (Jul 5)

Survey 3180K
Actual 3122K
Prior 3202K
Revised 3203K

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Philadelphia Fed (Jul)

Survey -15.0
Actual -16.3
Prior -17.1
Revised n/a

Hanging tough off the bottom, but still depressed.

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Philadelphia Fed TABLE (Jul)

Prices paid jumped to 75.6 from numbers that were already way too high.


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2008-04-16 US Economic Releases

  • MBA Mortgage Applications
  • Bloomberg Global Confidence
  • Consumer Price Index
  • Housing Starts
  • Building Permits
  • Industrial Production
  • Capacity Utilization

2008-04-16 MBAVPRCH Index

MBAVPRCH Index (Apr 11)

Survey n/a
Actual 381.6
Prior 384.7
Revised n/a

Holding in its new, lower range.


2008-04-16 MBAVREFI Index

MBAVREFI Index (Apr 11)

Survey n/a
Actual 2866.0
Prior 2724.7
Revised n/a

Doing ok in this prime time for resets, which are peaking and then falling off.


2008-04-16 Bloomberg Global Confidence

Bloomberg Global Confidence (Apr)

Survey n/a
Actual 14.54
Prior 13.08
Revised n/a

Still down, but signs of a bottom.


In my humble opinion, inflation is ripping, and the Fed’s in a very bad place. April’s food and energy price hikes, along with hosts of others, and the weaker USD all are pointing to an upward surge for prices on a forward looking basis.The Fed’s forecasting models should be showing higher inflation as well.And futures markets continue to be an unreliable forecasting tool for the Fed.

2008-04-16 Consumer Price Index MoM

Consumer Price Index MoM (Mar)

Survey 0.3%
Actual 0.3%
Prior 0.0%
Revised n/a

2008-04-16 CPI Ex Food & Energy MoM

CPI Ex Food & Energy MoM (Mar)

Survey 0.2%
Actual 0.2%
Prior 0.0%
Revised n/a

2008-04-16 Consumer Price Index YoY

Consumer Price Index YoY (Mar)

Survey 4.0%
Actual 4.0%
Prior 4.0%
Revised n/a

2008-04-16 CPI Ex Food & Energy YoY

CPI Ex Food & Energy YoY (Mar)

Survey 2.4%
Actual 2.4%
Prior 2.3%
Revised n/a

From Karim:

Headline/Core divergence->limited passthrough

  • Headline 0.343% and stays at 4% y/y

  • Core rises 0.152% (after 0.04% last month), showing limited pass-through from headline and even more limited pass-through from wholesale level (PPI from yday).

  • Core rises from 2.3% to 2.4%, equates to about 1.9-2.0% on core PCE basis due to measurement differences

  • Food up 0.2% and gas up 1.3%

  • OER up 0.2%, apparel down 1.3%, vehicles down 0.1%

  • Lodging away from home down 0.6% and medical up only 0.1%, a bit below trend

Housing starts not looking good. The glimmer of hope is that prior months have been revised up for the last two reports, so there’s a chance this number could be revised substantially as well.

2008-04-16 Housing Starts

Housing Starts (Mar)

Survey 1010K
Actual 947K
Prior 1065K
Revised 1075K

2008-04-16 Building Permits

Building Permits (Mar)

Survey 970K
Actual 927K
Prior 978K
Revised 984K

From Karim:

Housing data shows drag continuing with at least the same intensity

  • Starts down 11.9%, boding poorly for current GDP

  • Permits down 5.8%, boding poorly for future GDP

  • Best news is not adding to inventories

2008-04-16 Industrial Production

Industrial Production (Mar)

Survey -0.1%
Actual 0.3%
Prior -0.5%
Revised -0.7%

May be due to exports, which are keeping GDP and employment muddling through


2008-04-16 Capacity Utilization

Capacity Utilization (Mar)

Survey 80.3%
Actual 80.5%
Prior 80.9%
Revised 80.3%

Staying too high for the typical recession.

2008-03-18 US Economic Releases

2008-03-18 Producer Price Index MoM

Producer Price Index MoM (Feb)

Survey 0.4%
Actual 0.3%
Prior 1.0%
Revised n/a

2008-03-18 PPI Ex Food & Energy MoM

PPI Ex Food & Energy MoM (Feb)

Survey 0.2%
Actual 0.5%
Prior 0.4%
Revised n/a

2008-03-18 Producer Price Index YoY

Producer Price Index YoY (Feb)

Survey 6.8%
Actual 6.4%
Prior 7.4%
Revised n/a

2008-03-18 PPI Ex Food & Energy YoY

PPI Ex Food & Energy YoY (Feb)

Survey 2.1%
Actual 2.4%
Prior 2.3%
Revised n/a

Troubling as the Fed has indicated it’s getting passed through to core CPI measures.


2008-03-18 Housing Starts

Housing Starts (Feb)

Survey 995K
Actual 1065K
Prior 1012K
Revised 1071K

More indications of a possible bottom in housing, meaning it won’t be subtracting as much from GDP for the rest of the year.

Karim Basta:

Housing starts fall 0.6% in Feb, but January revised higher by 5.8%.

One notable trend is single vs multi-family starts. The latter has now risen for 3 straight months, whereas the former continues to decline across most regions. A couple explanations out there-foreclosures, real income weakness driving trend towards apartments/condos vs homes.

Permits fall another 7.8%; suggesting more declines in housing contribution to GDP going forward.

Margin squeeze evident in PPI as headline rises 0.3% and core by 0.5%.


2008-03-18 Building Permits

Building Permits (Feb)

Survey 1020K
Actual 978K
Prior 1048K
Revised 1061K

Looking down, but the prior revision might be more relevant.


2008-03-18 FOMC Rate Decision

FOMC Rate Decision (Mar 18)

Survey 2.25%
Actual 2.25%
Prior 3.00%
Revised n/a

2008-03-18 ABC Consumer Confidence

ABC Consumer Confidence (Mar 16)

Survey n/a
Actual -31
Prior -30
Revised n/a

Yet another chart that may have bottomed?

2008-02-20 US Economic Releases

2008-02-20 MBAVPRCH Index

MBAVPRCH Index (Feb 15)

Survey n/a
Actual 357.6
Prior 403.9
Revised n/a

2008-02-20 MBAVREFI Index

MBAVREFI Index (Feb 15)

Survey n/a
Actual 3533.8
Prior 4901.5
Revised n/a

These look very weak.

Banks are not included, so there’s a chance the banks could be taking market share from the mortgage bankers.


2008-02-20 Consumer Price Index MoM

Consumer Price Index MoM (Jan)

Survey 0.3%
Actual 0.4%
Prior 0.3%
Revised 0.4%

2008-02-20 CPI Ex Food & Energy MoM

CPI Ex Food & Energy MoM (Jan)

Survey 0.2%
Actual 0.3%
Prior 0.2%
Revised n/a

2008-02-20 Consumer Price Index YoY

Consumer Price Index YoY (Jan)

Survey 4.2%
Actual 4.3%
Prior 4.1%
Revised n/a

2008-02-20 CPI Ex Food & Energy YoY

CPI Ex Food & Energy YoY (Jan)

Survey 2.4%
Actual 2.5%
Prior 2.4%
Revised n/a

Today’s CPI report shows inflation is moving up sharply. If it was above Yellen the dove’s comfort zone last week it even further above it now. Same with Mishkin, who more than once said the FOMC had to be prepared to reverse course as needed.

Stocks are sensing they may be ‘on their own’ if the Fed is constrained by inflation.

Yes, the economy is weak, growth near 0 (see housing below), but demand is high enough to keep pushing food, crude, and import/export prices ever higher.

The Fed seeks an output gap/GDP growth consistent with inflation within their comfort zone.

Stronger growth will increase their inflation forecasts, while weaker growth is expected to bring inflation down.

Higher prices for food and crude are also presumed to bring out supply side responses, thereby bringing prices down.

But they also believe this has to happen before inflation expectations elevate, otherwise the higher prices get ‘monetized’ and a relative value story turns into an inflation story.

The data is now showing that is starting to happen, and for most FOMC time has probably run out. They may now feel they have used up all the past ‘credibility’ that has kept inflation expectations ‘well anchored’ trying to ‘forestall’ a financial collapse.


2008-02-20 Housing Starts

Housing Starts (Jan)

Survey 1010K
Actual 1012K
Prior 1006K
Revised 1004K

A glimmer of hope, but not much, but still winter numbers. Better picture will emerge by March.


2008-02-20 Building Permits

Building Permits (Jan)

Survey 1050K
Actual 1048K
Prior 1068K
Revised 1080K

No sign of a turn here.

From Karim:

Core up 0.311%; with headline spurred by food and energy (each up 0.7%). Y/Y up to 2.5% from 2.4%

OER up another 0.3% and medical up 0.5%

Some items unlikely to repeat next month are lodging away from home, which was up 1.1%.

Also, apparel (which was up 0.4%) has now risen 5 straight months. This series usually chops around and like lodging away from home, has seasonal adjustment issues. Tobacco up 1.1% after 0.8% prior month. Expect all of these to reverse over next 1-2 months.

Maybe, maybe not. With import prices and local costs rising, cost-push-inflation can keep things moving up until all catches up with food/energy numbers.

Also, many wage agreements, including government, and other contracts have CPI escalators, which sustain demand for the ever higher prices.

Housing starts tick up 0.8% from downwardly revised December number; single family starts down another 3% to lowest since 1/91

Building permits down another 3% (typically leads starts)

Bottom line is Fed is likely to believe that the pattern of growth and inflation of the past two easing cycles will repeat itself (chart attached); that is inflation typically peaks about 2-3 years after the peak in growth. Fed Member Stern (voter) referred to this yesterday where he said he expected core to come down over the next several years but not anytime soon, and that recent rate cuts were ‘wholly appropriate’.

Agreed, they may believe that, but they also believe that if inflation expectations elevate, the higher prices get ‘monetized’ and don’t revert.

That’s why they are so focused on the inflation expectation indicators, which they also know are difficult to read and not considered completely reliable.

2008-01-17 US Economic Releases

2008-01-17 Housing Starts

Housing Starts (Dec)

Survey 1145K
Actual 1006K
Prior 1187K
Revised 1173K

2008-01-17 Building Permits

Building Permits (Dec)

Survey 1135K
Actual 1068K
Prior 1152K
Revised 1162K

Both still in free fall – may be weather distorted some, but they don’t look good.


2008-01-17 Initial Jobless Claims

Initial Jobless Claims (Jan 12)

Survey 331K
Actual 301K
Prior 322K
Revised n/a

All the way back down. Seems out of line with housing and Philly Fed.

Could be the government spending kicking in that will subsequently support housing and other spending. (See previous posts on government spending.)

Spending resuming its growth after sagging for a couple of quarters as spending got moved forward.


2008-01-17 Continuing Claims

Continuing Claims (Jan 5)

2008-01-17 Continuing Claims from 1980

Continuing Claims since 1980

Survey 2750K
Actual 2751K
Prior 2702K
Revised 2685K

Back up, but this is a tiny blip on the longer term chart.


2008-01-17 Philadelphia Fed.

Philadelphia Fed. (Jan)

Survey -1.0
Actual -20.9
Prior -5.7
Revised n/a

Falling off a cliff.


2008-01-17 Philadelphia Fed. TABLE

Philadelphia Fed. TABLE

Weakness in every category – except prices paid and received, which skyrocketed.

Adds to the fed’s dilemma.


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2007-12-18 US Economic Releases

2007-12-18 Housing Starts

Housing Starts (Nov)

Survey 1176K
Actual 1187K
Prior 1229K
Revised 1232K

2007-12-18 Building Permits

Building Permits (Nov)

Survey 1150K
Actual 1152K
Prior 1178K
Revised 1170K

While housing is still down and out, I’m going out on a limb and saying it’s not going to get much worse, and the next meaningful move is up, particularly if exports hold up. December, January, and February are slow months, and the data doesn’t tell me much; so, it will be ninety days before we get any clarity of where it’s actually going.


2007-12-18 ABC Consumer Confidence

ABC Consumer Confidence (Dec 16)

Survey n/a
Actual -17
Prior -23
Revised n/a

The CNBC Effect wearing off some?


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