Saturday, May 11, 2013

Weekly Indicators: the sunny blue skies of May edition

 - by New Deal democrat

Absolutely no monthly data of any significance was reported during the last week, except for the actual surplus the US government ran last month. So let's get directly to the high frequency weekly indicators and start again with transport:


Railroad transport from the AAR
  • +7700 or +2.8% carloads YoY

  • +5200 or +3.1% carloads ex-coal

  • +6700 or +2.8% intermodal units

  • +14,400 or +2.8% YoY total loads
Shipping transport Rail transport had its best week in over a month, after it had turned 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 been very positive since last December. They got less positive in the early part of April, but have rebounded again, and this week had one of the most positive comparisons all year.  The ICSC varied between +1.5% and +4.5% YoY in 2012. In the past two weeks it has rebounded from prior results near the bottom of this range. The JR report this week also rebounded the upper part of its typical YoY range for the last year.

Employment metrics

Initial jobless claims
  •   323,000 down 1,000

  •   4 week average 336,750 down 5,500
American Staffing Association Index
  • 93 up 1 w/w, up +0.2% YoY
Initial claims established a new lower bound to their recent range of between 330,000 to 375,000. The spring increase of the last two years has not materialized this year.  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.

Daily Treasury Statement tax withholding
  • $130.5 B (adjusted for 2013 payroll tax withholding changes) vs. $135.1 B, or -3.4% YoY for the last 20 days.  The unadjusted result was $151.5 B for a 12.4% increase.

  • $56.2 B was collected for the first 7 days of May vs. $50.0 B unadjusted in 2012, a $6.2 B or a +12.4% increase YoY.
These are very good YoY comparisons compared with the last three months. While my best estimate is that collections should be up 15% due to the payroll tax increases that took effect on January 1, that appears not to be accurate, so now that we have enough data from this year I am making comparisons with earlier this year, and this week's comparison is one of the two best.

Housing metrics

Housing prices
  • YoY this week +6.6%
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 a new 6 year record.

Real estate loans, from the FRB H8 report:
  • up 9 or +0.3% w/w

  • up 16 or +0.5% YoY

  • +2.4% 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:
  • +2% w/w purchase applications

  • +12% 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. Nevertheless this was the best week for refinancing in 5 months.

Interest rates and credit spreads
  •  4.52% BAA corporate bonds down -0.01%

  • 1.70% 10 year treasury bonds down -0.03%

  • 2.82% credit spread between corporates and treasuries up +0.02%
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.  The  last several months saw a marked increase in rates and credit spreads widened, followed by a reversal in the last few weeks.

Money supply

  • +1.0% w/w

  • +3.0% m/m

  • +11.8% YoY Real M1

  • +0.3% w/w

  • +0.2% m/m

  • +5.4% 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 month or so.

Oil prices and usage
  •  Oil $96.04 up +$0.43 w/w

  • Gas $3.54 up +$0.02 w/w

  • Usage 4 week average YoY -2.4%
The price of a gallon of gas, after declining sharply in March and April, has risen slightly 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
  • up 0.15 to 125.58 w/w

  • +2.25 YoY
After months of gradual deterioration, there were absolutely NO negatives in the weekly indicators this past week. The closest were several positive but deteriorating indicators: temp services are barely above last year, and Oil and gas prices have started climbing again, with less gas usage. Bond spreads were neutral. Commodities were muted.

Positives included house prices, and both purchase and refinancing mortgage applications. Initial claims continued their terrific recent run. Money supply was positive. Overnight bank rates are somnolent. Consumer spending as mesured by same store sales is decent. Gallup consumer spending continues on a tear. Rail traffic had the best week in over a month. Even tax withholding, when compared with its adjusted YoY results over the last four months, had its best comparative weekly result yet.

This is about as good a weekly batch of statistics as could be hoped for, and I'll take it. Have a nice weekend.