- by New Deal democrat
Monthly data released in the past week included strongly positive retail sales, even after gasoline-dominated inflation was taken into account. Industrial production and capacity utilization also rose strongly. The Empire Sate Manufacturing report was positive. On the negative side, business inventories increased and consumer sentiment, especially forward-looking expectations soured. The latter is most likely due to the ongoing sequester and latest "grand bargain" machinations in Washington.
Let me remind readers that this look at high frequency weekly data is not predictive, but attempts to capture the most up to the minute pulse of the economy in the present. As I've done for the last few weeks, due to the recent payroll tax increases, let's start again this look at the high frequency weekly indicators by checking what is happening with tax withholding:
Daily Treasury Statement tax withholding
- $153.1 B (adjusted for 2013 payroll tax withholding changes) vs. $163.1 B, -6.1% YoY for the last 20 days. The unadjusted result was $176.1 B for an 8.0% increase.
- 332,000 down 8,000
- 4 week average 346,750 down 2,000
- up 1 to 91 w/w up 3.6% YoY
To reiterate, I am adjusting my YoY tax withholding figures to reflect the increase in personal withholding taxes. While the YoY collections are up substantially, they should be up over 15% to compensate for the tax increase. Since I can think of no reason why employment itself should have fallen off a cliff in January, it is very possible that there is a lag in the payment of withholding taxes with the new increase. If this hypothesis were correct, I would have expected tax withholding to be much more reliable by about now. So far, that isn't happening.
- ICSC +0.7% w/w +1.8% YoY
- Johnson Redbook +2.7%YoY
- Gallup daily consumer spending 14 day average at $92 up $22 or over 30%(!) YoY
- YoY this week. +5.0%
Real estate loans, from the FRB H8 report:
- -0.2% w.w
- unchanged YoY
- +2.2% from its bottom
Mortgage applications from the Mortgage Bankers Association:
- -3% w/w purchase applications
- +9% YoY purchase applications
- -5% w/w refinance applications
Interest rates and credit spreads
- 4.85% BAA corporate bonds up 0.08%%
- 1.96% 10 year treasury bonds up 1.96%
- 2.89% credit spread between corporates and treasuries unchanged
- +0.1% w/w
- -0.8% m/m
- +9.4% YoY Real M1
- +0.1% w/w
- -0.8% m/m
- +4.6% YoY Real M2
Oil prices and usage
- Oil $93.45 up $1.50 w/w
- gas $3.71 down $0.05 w/w
- Usage 4 week average YoY +1.1%
Railroad transport from the AAR
- -2500 or -0.9% carloads YoY
- +500 or +0.4% carloads ex-coal
- +9,000 or +4.0% intermodal units
- +6600 or +1.3% YoY total loads
Bank lending rates
JoC ECRI Commodity prices
- up 1.35 to 128.09 w/w
- +1.61% YoY
Relatively weak comparisons included real estate loans and bank credit rates and spreads. Of more concern is that M2 money supply, a historically important component of the LEI, has declined since the first of the year.
In addition to Gallup consumer spending, other continuing positives once again include housing prices and mortgage applications. Bank lending rates remain positive. Gas usage remains positive, and Oil prices are more accomodating. Initial claims are very positive. Rail traffic was also generally positive again.
Only tax withholding adjusted for increased rates, plus real M2 measured from the beginning of this year are outright negative. To reiterate my conclusion from lat week, many of the others are less positive than they used to be, and are close to neutral. Thus I remain more cautious than in recent months.
Have a nice weekend.