Saturday, May 18, 2013

Weekly Indicators: more of the month of 'meh' edition

 - by New Deal democrat

April monthly data reported this past week included significant declines in industrial production and capacity utilization, declines in several regional manufacturing indexes, and a big decline in both monthly consumer and producer prices. due mainly to declining gas prices. Retail sales were positive. Michigan consumer sentiment, mainly as to present conditions, reached a multiyear high, while future expectations remained in the basement. Due mainly to soaring building permits, the April LEI rose 0.6. Housing starts had a big decline.

Let's start our look at the high frequency weekly indicators again with transport:


Railroad transport from the AAR
  • +0.6% carloads YoY

  • +0.5% carloads ex-coal

  • +3.9% intermodal units

  • +2.1% YoY total loads
Shipping transport Rail transport had a second decent week, after turning negative for three recent weeks.  The Harpex index continues to improve slowly from its January 1 low of 352, and the Baltic Dry Index remains above its recent low.

Consumer spending Gallup's YoY comparisons have generally been extremely positive since last December, and were so again this week.  The ICSC varied between +1.5% and +4.5% YoY in 2012, so this was an extremely poor week. By contrast, the JR report this week also rebounded the upper part of its typical YoY range for the last year.

Employment metrics

Initial jobless claims
  •   360,000 up 37,000

  •   4 week average 339,750 down 3,000
American Staffing Association Index
  • 93 unchanged w/w, down -0.1% YoY
Initial claims spiked, but remained well within their recent range of between 325,000 to 375,000.  The ASA is still running slighty below 2007, but now essentially unchanged from last year as well. In other words, the comparison has been generally deteriorating on a YoY basis.

Housing metrics

Housing prices
  • YoY this week +6.8%
Housing prices bottomed at the end of November 2011 on Housing Tracker, and averaged an increase of +2.0% to +2.5% YoY during 2012. This weeks's YoY increase makes another new 6 year record.

Real estate loans, from the FRB H8 report:
  • down 18 or -0.5% w/w

  • up 7 or +0.2% YoY

  • +2.1% from its bottom
Loans turned up at the end of 2011 and averaged about 1% gains YoY through most of 2012.  In the last several months the comparisons have softened significantly.

Mortgage applications from the Mortgage Bankers Association:
  • -4% w/w purchase applications

  • +10% YoY purchase applications

  • -8% w/w refinance applications
This year purchase applications have finally established a slightly rising trend, and this week's number was the best in 3 years.  Refinancing applications were very high for most of last year with record low mortgage rates, but decreased slightly since then.

Interest rates and credit spreads
  •  4.65% BAA corporate bonds up +0.13%

  • 1.70% 10 year treasury bonds up +0.13%

  • 2.82% credit spread between corporates and treasuries unchanged
Interest rates for corporate bonds have generally been falling since being just above 6% two years ago in January 2011, hitting a low of 4.46% in November 2012.  Treasuries have fallen from about 2% in late 2011 to a low of 1.47% in July 2012. Spreads have varied between a high over 3.4% in June 2011 to a low under 2.75% in October 2012.

Money supply

  • -2.3% w/w

  • +2.5% m/m

  • +11.9% YoY Real M1

  • unchanged w/w

  • +0.2% m/m

  • +5.8% YoY Real M2
Real M1 made a YoY high of about 20% in January 2012 and has generally been easing off since.  This week's YoY reading increased sharply.  Real M2 also made a YoY high of about 10.5% in January 2012.  Its subsequent low was 4.5% in August 2012. It has increased slightly in the last couple of months.

Oil prices and usage
  •  Oil $96.02 down -$0.02 w/w

  • Gas $3.60 up +$0.06 w/w

  • Usage 4 week average YoY -3.1%
The price of a gallon of gas, after declining sharply in March and April, has risen again in May. The 4 week average for gas usage remained negative after previously spending nine weeks in a row being positive YoY.

Bank lending rates The TED spread recently increased again, but is still near the low end of its 3 year range.  LIBOR remained at its new 52 week low and is close to a 3 year low.

JoC ECRI Commodity prices
  • down -0.75 to 124.83 w/w

  • +3.81 YoY
After months of gradual deterioration, last week there were no negatives in the weekly indicators. This week was a great big "meh."

Positives included house prices, and YoY purchase mortgage applications. Money supply was positive. Overnight bank rates are somnolent. Consumer spending as mesured by same store sales were mixed, with two strong positives and one very week reading. Rail traffic had a decently positive week in over a month.

Negatives included commodities, real estate loans, mortgage applications, and the Baltic Dry Index, but these were all minor. The only real negative was the spike in initial jobless claims, which may or may not portend anything.

All in all, Meh. Have a nice weekend.