- by New Deal democrat
This week in the monthly indicators we found out that manufacturing was definitely slowing (Empire State, Philly Fed) while Industrial Production was up again in August. Inflation is back (which is better than deflation), and August retail sales were quite good. Consumer confidence, however, tanked. In short, the leading data was soft (and confidence outright poor), while the coincident data remained favorable.
I started tracking high frequency weekly indicators to gauge the staying power of the recovery. This they have done, as generally they have never turned negative on a YoY basis. More recently, they have started to bounce back from summer weekly declines, but this week they were more mixed.
The Mortgage Bankers' Association reported that its Refinance Index decreased 10.8% from the previous week, as slightly higher mortgage rates dissuaded applications, while the seasonally adjusted Purchase Index decreased slightly by 0.4% from one week before. Purchase mortgage activity has rebounded off its summer lows for the second week in a row, which is good news, although it means far below its level from earlier this year.
The ICSC reported same store sales for the week ending September 12 increased 0.8% week over week, and up 2.6% YoY. This is still the second weakest YoY performance in several months. On ther other hand, Shoppertrak reported that for the week ending September 11, YoY sales increased 5.7% percent, and were also up 3.0% compared with the previous week.
Gas prices rose $.04 to $2.72 a gallon, and at 9.029 usage again was virtually identical to one year ago. Gasoline stocks continue to be near record territory.
The BLS reported 450,000 new jobless claims, for the second week in a row. It looks like my conjecture that census and municipal/education layoffs were mainly responsible for the June - August spike, as well as a few states recording renewed claims after Congress extended benefits, as "new" claims, was correct.
Railfax showed that all sectors of rail traffic declined last week. This is not unusual due to seasonality, but the decrease was more than last year in all sectors, and economically sensitive waste and scrap metal continued to run below last year's levels.
The American Staffing Association reported that for the week ending September 5, temporary and contract employment decreased 1% to 96.0, the first decrease in a month, but this index still exceeds its 2008 as well as 2009 levels.
M1 increased +0.5% in the last week, about 2.5% month over month, and up 6.8% YoY, so “real M1” is up 5.6%. M2 increased 0.1% in the last week, +0.7% month over month, and up 3.0% YoY, so “real M2” is up 1.8%. Real M1 strongly indicates no double-dip recession, and real M2 has been gradually improving in the last few months. This is its best reading in over 6 months, and it is now only 0.7% into the caution zone.
Weekly BAA commercial bond rates rose for the second week in a row, up another .08% to 5.67%. This is still a very low rate.
Ten days into September, the Daily Treasury Statement is up $70.8 B vs. $62.4 B a year ago, a gain of ~13.5%. For the last 20 reporting days, withholding taxes are up $122.3 B vs. $111.6 B a year ago, for a gain of ~9.6%. This is the best showing in several months.
In general the recent action in these high frequency indicators tell me that the May-August declines in housing starts continue to ripple through the rest of the economy, especially in manufacturing, but other stressors (the Euro, Oil, municipal layoffs) have abated.
Next week we will see Housing Permits which will complete the Leading Indicators. So far they seem to remain "converging on zero."