First of all, apologies for not putting this up last week, but the weekend and real life commitments called. Besides, you didn't need me to tell you that the data last week stunk, right?
This week, bad news on the mortgage application front only got worse. The MBA mortgage indexes for the week ending July 2:
While the refinancing news is a definite silver lining, it seems nowhere enough to offset the running-into-brick-wall thud of the origination market.
The Refinance Index increased 9.2 percent from the previous week and is the highest Refinance Index observed in the survey since the week ending May 15, 2009. The seasonally adjusted Purchase Index decreased 2.0 percent from one week earlier. The Purchase Index has decreased eight of the last nine weeks. The unadjusted Purchase Index decreased 2.3 percent compared with the previous week and was 34.7 percent lower than the same week one year ago.
New auto sales declined in June to 11.1 million vehicles on an annualized basis. After rebounding strongly late last year, auto sales have stagnated in the last 4 months. I suspect this is Oil price related, but that explanation is for another post.
Turning to the other weekly indicators:
The ICSC reported same store sales for the week ending July 2
rose 3.9% in the July 3 week vs. a year earlier, fueled by pre-July 4 buys and hot temps, the Int'l Council of Shopping Centers said. June comps likely rose at the high end of a 3%-4% target, ICSC said.For the month of June there was a gain of 3.0%.
Meanwhile, Shoppertrak reported sales for the week ending June 26 rose a strong 6.3% YoY, while down 8.0% from the prior week.
Gas held stead at $2.73. The 4 week average of usage is up substantially from last year up 2%-4% YoY in the last couple of weeks, the first time since early this year that this has happened -- showing consumers remain very responsive to price changes at the pump.
The BLS reported 454,000 new jobless claims this week. In the next 3 weeks, we may finally break out of the range these have been in since the beginning of the year -- but if so the reason is most likely that GM in particular is keeping its auto plants open in July, so typical seasonal layoffs aren't happening. (On that score, the hot new Cadillac CTS Coupe has begun to hit the showrooms this week, so be sure to stop in and drool).
Railfax showed an improvement in cyclical and intermodal loads this week, inching forward compared with last year. Baseline traffic remained worrisomely stuck at last year's levels.
Weekly M1 and M2 were reported up 1% and up 0.2% respectively. On a month over month basis they are up 1% and 0.5% respectively. This will be a mild positive for the June LEI, which will still probably be very negative due to housing permits, manufacturing hours, and the stock market. Real M1 and M2 remain up about 4% and 0.8% YoY, respectively. There was never been a recession since 1920 with a positive real M1.
The American Staffing Association reported another .05% increase for the week of June 21–27, 2010, and also:
U.S. staffing employment is 32% higher than the level reported for the first week of the current year and is 26% higher than the same weekly period in 2009.There is good news and bad news as to the Daily Treasury Statement. June concluded with 8% grains compared to 2009, the best comparison of any month in 2 years: $144.4 Billion s vs. $133.5 billion in June 2009. July started out with a bit of a thud, and 4 days in is running slightly behind last year, $33.0 B to $34.7 B. For the last 20 reporting days, however, we are still up a solid 5.5%, $128.4 B vs. $121.8 B.
In general, coincident indicators continue to show strength, but leading indicators -- especially purchase mortgage applications, which are the most important metric of all right now-- are of real concern.
Watch for retail sales this coming week, especially ex-gasoline.
P.S.: In case you missed it, Mish replied to my criticisms from yesterday. His bottom line:
I may even agree with the second paragraph, but notice that he finally had to do (some of) his homework, and this point is far more qualified than his original, incorrect point.
Still think retail sales are up? If they are, it's not by much and it's
only in comparison to amazingly weak numbers from a year ago....
Whatever rise there was in retail sales (if any), it has come too late to matter given the current enormous mess in state budgets. Moreover, please note that states are still hugely in trouble after siphoning off huge tax increases.
h/t Constant Learner
UPDATE: I just double-checked Mish's tax increase arguments:
1. He cites an article from July 2009 w/r/t tax increases in many states that rose earlier in 2009. Any of those increases already in effect in May 2009 are equally applicable to both years and support the data I cited.
2. He cites a California article that references the many tax increases that took place beginning in April 2009. Again these are applicable to both years and so support my point.
3. He cites an increase in New York City taxes. This is irrelevant to State revenues.
Only his argument about Texas appears to hold water, and Texas has been the laggard throughout (what's up with Jersey, though?).
BTW, thanks to all commenters. I may not always reply (there's that life thing), but I always appreciate your input.
In the meantime, enjoy the weekend. Rumor has it, this week there may be doggies....