Monthly statistics this week showed some inflation at the producer level at 0.4%, but virtually none at the consumer level at 0.1%. YoY CPI is 1.1%. Consumer confidence decline, but the portion which is contained in the LEI - expecations - rose to a 4 month high. And consumers are spending as if they are confident: retail sales were up 0.4% in September after an upwardly revised 1.1% in August. In the third quarter retail sales were increasing at nearly a 7% annual clip. The Pavlovian fear response from spring has clearly passed. Finally, the Empire State Index surprisingly turned up, indicating at least some renewed vigor in manufacturing.
Let's turn now to the high frequency weekly data. These continue to generally be generally positive.
The Mortgage Bankers' Association reported that its Refinance Index increased 21.0% from the previous week, hitting a new high for the year, in response to record low 15 and 30 year mortgage rates (for example, a 15 year rate can be had for 3.5%, meaning interest on a $100,000 mortgage is $3,500 for the first year, or less than $300/month). The seasonally adjusted Purchase Index, however, increased a whopping 8.5% from one week before. The purchase index is right back where it was before last week's 9.3% bounce, clearly better than July's lows, but going sideways over the last several months at a rate well below last year. Low interest rates like this, and declining prices, will eventually reignite this market - but not just yet.
The ICSC reported same store sales for the week ending October 3 rose 0.8% week over week, reversing the prior week's loss, and were up 2.6% YoY, still a weak performance compared with recent gains. Shoppertrak did not make a report weekly, but did report that for the month of September, YoY sales rose 2.4%.
Gas prices rose 9 cents to $2.82 a gallon, and at usage at 8.812 million gallons was below last year's 9256. Gasoline stocks continue to be 10% above their normal range for this time of year. This also reflects a slowdown, as Oil continues to be priced near $85 a barrel. This is a bad omen, as the price of Oil continues to act as a choke collar on growth.
The BLS reported 463,000 new jobless claims. The four week average rose 3,000 to 459,000. While we are back from the depressing July-August excursion to 500,000 we remain unable to break through to new lows.
Railfax once again showed rail traffic improving last week, and improving at a rate slightly better than one year ago. Economically sensitive waste and scrap metal improved again, but still is running no better than last year's levels. Auto loads increased compared with last year.
The American Staffing Association reported that for the week ending October 3, temporary and contract employment remained at 100.0, equalling its two year high. Nevertheless, the trend here is very bullish. If it continues, in a few month we should see more permanent hiring.
M1 rose 0.6% last week, and also increased about 1.3% month over month, and up about 6.5% YoY, so “real M1” is up 5.4%. M2 increased again 0.2% last week, +0.7% month over month, and up 3.2% YoY, so “real M2” is up 2.1%. "Real" M2 is now close to breaking out of the "red zone" of +2.5%, which would give us the "all clear" as to any "double dip."
Weekly BAA commercial bond rates increased a whopping 0.01% last week to 5.59%. The DJ Bond Index once again made a new high at 274.28. Yields are falling while stocks are increasing, continuing the bullish sign.
Eight days into October, the Daily Treasury Statement is up $58.7 B vs. $53.4 B a year ago, a gain of ~10%. For the last 20 days, receipts are up $128.6 B vs. $120.2 B a year ago, a gain of about 7%.
The Mortgage Bankers' Association reported that its Refinance Index increased 21.0% from the previous week, hitting a new high for the year, in response to record low 15 and 30 year mortgage rates (for example, a 15 year rate can be had for 3.5%, meaning interest on a $100,000 mortgage is $3,500 for the first year, or less than $300/month). The seasonally adjusted Purchase Index, however, increased a whopping 8.5% from one week before. The purchase index is right back where it was before last week's 9.3% bounce, clearly better than July's lows, but going sideways over the last several months at a rate well below last year. Low interest rates like this, and declining prices, will eventually reignite this market - but not just yet.
The ICSC reported same store sales for the week ending October 3 rose 0.8% week over week, reversing the prior week's loss, and were up 2.6% YoY, still a weak performance compared with recent gains. Shoppertrak did not make a report weekly, but did report that for the month of September, YoY sales rose 2.4%.
Gas prices rose 9 cents to $2.82 a gallon, and at usage at 8.812 million gallons was below last year's 9256. Gasoline stocks continue to be 10% above their normal range for this time of year. This also reflects a slowdown, as Oil continues to be priced near $85 a barrel. This is a bad omen, as the price of Oil continues to act as a choke collar on growth.
The BLS reported 463,000 new jobless claims. The four week average rose 3,000 to 459,000. While we are back from the depressing July-August excursion to 500,000 we remain unable to break through to new lows.
Railfax once again showed rail traffic improving last week, and improving at a rate slightly better than one year ago. Economically sensitive waste and scrap metal improved again, but still is running no better than last year's levels. Auto loads increased compared with last year.
The American Staffing Association reported that for the week ending October 3, temporary and contract employment remained at 100.0, equalling its two year high. Nevertheless, the trend here is very bullish. If it continues, in a few month we should see more permanent hiring.
M1 rose 0.6% last week, and also increased about 1.3% month over month, and up about 6.5% YoY, so “real M1” is up 5.4%. M2 increased again 0.2% last week, +0.7% month over month, and up 3.2% YoY, so “real M2” is up 2.1%. "Real" M2 is now close to breaking out of the "red zone" of +2.5%, which would give us the "all clear" as to any "double dip."
Weekly BAA commercial bond rates increased a whopping 0.01% last week to 5.59%. The DJ Bond Index once again made a new high at 274.28. Yields are falling while stocks are increasing, continuing the bullish sign.
Eight days into October, the Daily Treasury Statement is up $58.7 B vs. $53.4 B a year ago, a gain of ~10%. For the last 20 days, receipts are up $128.6 B vs. $120.2 B a year ago, a gain of about 7%.
This continues the evidence that the "double dip" is passing. The one bad piece of news is Oil. We will not get strong growth on a persistent basis if it continues to or near $90 a barrel every time growth picks up.
