Saturday, January 12, 2013

Weekly indicators: consumers on track, rail loads derailed edition

- by New Deal democrat

There was little in the way of monthly data for December this week. Consumer confidence increased. Import and export prices decreased. The trade balance worsened. None of these are particularly big numbers.

So let's turn to the high frequency weekly indicators:

Housing metrics

Housing prices
  • YoY this week. +2.4%
Housing prices bottomed at the end of November 2011 on Housing Tracker, and have averaged an increase of +2.0% to +2.5% YoY for the last year.

Real estate loans, from the FRB H8 report:
  • +0.2% w.w

  •  +2.3% YoY

  • +2.9% from its bottom
Loans turned up at the end of 2011 and have recently shown more strength.
Mortgage applications
  • +13% w/w purchase applications

  • -8% YoY purchase applications

  • +12% w/w refinance applications
Purchase applications have been going sideways for 2 years. Refinancing applications were very high for most of last year with record low mortgage rates, but with the recent increase in rates, these have declined substantially in the last month or so, despite the increase shown this week.

Interest rates and credit spreads
  • +0.10%% to 4.71% BAA corporate bonds

  • +0.11% to 1.87% 10 year treasury bonds

  • -.01% to 2.84% credit spread between corporates and treasuries
Interest rates have risen in recent weeks, but spreads have declined again and are close to 52 week lows.

Money supply
  • -0.8%% w/w

  • +1.5% m/m

  • +11.0% YoY Real M1

  • +0.7% w/w

  • +1.8% m/m

  • +6.6% YoY Real M2
Both Real M1 and Real M2 remain strongly positive, with M2 in particular improving in the last several months.

Consumer spending
  • ICSC -4.2% w/w +4.2% YoY

  • Johnson Redbook +2.1% YoY

  • Gallup daily consumer spending 14 day average $83 up $15 YoY
This week is close to if not at a 1 year high YoY increase for the ICSC index. Anything over 2% has been better than usual for Johnson Redbook in the last year. Gallup remains the real star, with spending up sharply compared with January last year, and remaining close to holiday season levels.

Oil prices and usage
  •  Oil $93.56 up $0.47 w/w

  •   gas $3.30 flat w/w

  • Usage 4 week average YoY -2.3%
Gas prices are seasonally low. Usage continues to run negative YoY as it has for most of the last year plus.

Employment metrics
Initial jobless claims
  •   371,000 down 1,000

  •   4 week average 365,750 up 5,750
American Staffing Association Index
  • down 5 to 89 w/w
Daily Treasury Statement tax withholding
  •  $183.9 B (adjusted for 2013 tax changes) vs. $171.8 B +7.0% YoY last 20 days

  •  $66.9 B (unadjusted) vs. $69.1 B down -2.2 B 1st 7 days of January monthly YoY
The decline in the ASA Index is normal after Christmas, although in the second half of 2012 the index's performance compared with 2011 declined significantly, although the absolute index was higher. Initial claims have jumped back into their 10 month sidways range. Tax withholding, even adjusted for the increase in the payroll tax, remains very strong.


Railroad transport
  •  -33,200 or -12.1% carloads YoY

  • -24,800 or -19% carloads ex-coal

  • -15,600 or -8.0% intermodal units

  • -39,800 or -9% YoY total loads

  • 16 of 20 types of carloads down YoY, 1 less than last week
Shipping transport
  • Harpex up 4 at 356

  • Baltic Dry Index up 54 to 760
Rail transport, after being extremely positive YoY 2 weeks ago, has been extemely negative YoY since. It is something that will have to be watched closely.

Bank lending rates
  • 0.24 TED spread flat w/w

  • 0.2057 LIBOR down .002 w/w
The TED spread is near its 52 week low. LIBOR is at a new 52 week low and is close to a 3 year low.

JoC ECRI Commodity prices
  • up 0.98 to 127.05 w/w

  • +4.13 YoY
The most striking data in the last couple of weeks has been the steep and sudden YoY decline in railroad carloads. That being said, there have been some wild swings at this time of year due to haphazard winter weather in the past, and that may be part of the reason for the big YoY differences. Very little else was negative. Gasoline usage continues to be negative YoY, and interest rates have risen slightly.

On the other hand, consumer spending, especially as measured by Gallup, remains quite strong. Money supply, interest rate spreads, and bank lending rates are also very positive. Tax withholding is strong. Gas prices remain accomodative. House prices and loans are positive, although purchases and refinancings of mortgages are mixed this week. Shipping rates are up slightly.

I am most interested in when or whether the 2% increase in withholding tax rates will have an effect on consumers, although I wouldn't have expected it to show up yet.

Have a nice weekend.