- by New Deal democrat
[Special note to Seeking Alpha readers: In addition to Hale Stewart a/k/a Bonddad, Silver Oz, myself, and every once in a blue moon Invictus (from The Big Picture) write posts at the Bonddad Blog. I started writing this column at the end of every week about 2 years ago to check on whether the "green shoots" were real. Reports that are issued every week are the first sign of whether or not there is a turn in the economy, and they can do so in virtual "real time."]
This was a slow week for monthly reports, so let's turn immediately to the high-frequency weekly indicators:
Probably the most important news is that Oil was trading at $111.75 a barrel midday on Friday, the fifth full week it has been above $100. It remains at a level above 4% of GDP. Gas at the pump increased $.08 to $3.68 a gallon. Gasoline usage at 8853 M gallons was 2.5% lower than last year's 9057. This YoY comparison has turned negative and deteriorated further in the last week.
The BLS reported that Initial jobless claims last week were 382,000. The 4 week average is 389,500. This is the seventh week in a row that this number has been initially reported below 400,000. On the other hand, this series has not made a new low in five weeks.
Railfax was up 11.2% YoY, the best relative showing in months. Baseline traffic for the third week is no higher than last year's levels, intermodal traffic turned significantly higher last week, driving the improvement. Waste materials continued below last year's levels (this may be fallout from municipal funding cuts for recycling). Shipments of motor vehicles, however, continued to improve YoY. This was a good week.
The Mortgage Bankers' Association reported a decrease of 6.7% in seasonally adjusted mortgage applications last week. This series has meandered generally in a flat range since last June. Refinancing decreased 6.7%, and is close toits lows since last July. The silver lining is that neither series has hit a new low in 9 months - the longest such period since the housing bust began half a decade ago.
The American Staffing Association Index increased one point to 92, after stalling at he 90-91 level for 7 weeks. This is improvement for this year, but this series is making no relative headway against its pre-recession peak.
The ICSC reported that same store sales for the week of April 2 rose 2.3% YoY, and increased 2.8% week over week. Shoppertrak reported an 8.7% YoY decline for the week ending April 2, and a WoW decline of 2.0%. Unlike almost every other series, these two series' YoY comparisons have been remaining steady or improving over the last month. Shoppertrak cautioned that calendar affects (Easter week this year vs. last year) strongly affected this week's result. The ICSC YoY result is about average for this year so far.
Weekly BAA commercial bond rates increased.05% to 6.05%. This compares with a 09% increase in the yields of 10 year treasuries to 3.47%. Over the last 6 months both series have seen higher interest rates, but government bonds have generally been weaker. There is no sign of corporate distress here.
Adjusting +1.07% due to the recent tax compromise, the Daily Treasury Statement showed that for this first 4 days in April, $41.9 B was collected vs. $35.5 B a year ago, for a gain of $6.4 B YoY. For the last 20 days, $155.8 B was collected vs. $138.3 B a year ago, for a gain of $17.5 B, or +12.6%. I suggest using this series with extra caution, because the adjustment for the withholding tax compromise is only a best guess, and may be significantly incorrect.
M1 was up 0.7% w/w, up 0.5% M/M, and up a strong 10.0% YoY, so Real M1 is up 7.8%. M2 was unchanged w/w, up 0.1% M/M and up 4.5% YoY, so Real M2 is up 2.3%. Although Real M1 is still strongly in the "green zone" where it has been since before the end of the "great recession," Real M2 has been fading back into the "yellow zone" below 2.5%. Additionally, the weak +0.2% M/M reading means that, depending on inflation, it could become yet another of the 10 components of the LEI to go negative in March.
This was a pretty decent week, but the continued slide in YoY comparisons of gasoline usage shows that Oil prices are taking a bite out of consumer spending. So far, only a slowdown and not a reversal in the economy seems to be in order.
Have a nice weekend!