- by New Deal democrat
This week's edition of Weekly Indicators is coming to you from one of my favorite places in the whole world, Aroma's Coffeehouse in Colonial Williamsburg.
Month over month August data included the Index of Leading Economic Indicators, up strongly, suggesting good growth for the next 6 to 8 months. Industrial production improved to a post-recession high, capacity utilization was up, the Philly manufacturing index improved, although the Empire State index decelerated. Existing home sales were up. Consumer prices barely budged. A big negative was the decline in housing starts and permits.
Let's again start this edition of the high frequency weekly indicators by looking at the real economic version of the Dow signal, i.e., comparing manufacturing with transport:
Steel production from the American Iron and Steel Institute
- -1.3% w/w
- +5.3% YoY
Steel production over the last several years has been, and appears to still be, in a decelerating uptrend. It had been negative YoY, but turned positive one week ago.
Railroad transport from the AAR
- +8300 carloads up +1.5% YoY
- +12,700 carloads or +7.7% ex-coal
- +13,300 or +4.9% intermodal units
- +17,300 or +3.1% YoY total loads
- Harpex down -3 to 403
- Baltic Dry Index up +268 to 1904
Initial jobless claims
- 309,000 up +17,000
- 4 week average 314,750 down -6500
The American Staffing Association Index was up 1 98. It is up +5.1% YoY
- $111.2 B for the first 13 days of September vs. $99.5 B last year, up +11.7 B or +11.8%
- $148.5 B for the last 20 reporting days vs. $134.0B last year, up +14.5 B or +10.8%
We can now estimate that after adjusting for state reporting glitches, one week ago initial jobless claims were ~318,000, still a 6 year low. Jobless claims remain firmly in a normal expansionary mode. Like each of the last three years that this same, a good, downside breakout has occurred.
Temporary staffing had been flat to negative YoY in spring, but has broken out positively in the last two months. Tax withholding, after a relatively poor August, is again posting better comparisons.
- ICSC -1.6% w/w +3.2% YoY
- Johnson Redbook +3.4% YoY
- Gallup daily consumer spending 14 day average at $81 up $9 YoY
Oil prices and usage
- Oil down -3.46 to $104.75 w/w
- Gas down -$0.04 at $3.55 w/w
- Usage 4 week average YoY down +0.6%
Interest rates and credit spreads
- 5.54% BAA corporate bonds up +0.05%
- 2.92% 10 year treasury bonds unchanged
- 2.57% credit spread between corporates and treasuries up -+0.05%
Mortgage applications from the Mortgage Bankers Association:
- +3% w/w purchase applications
- +1% YoY purchase applications
- +18% w/w refinance applications
- YoY this week +11.1%
Real estate loans, from the FRB H8 report:
- unchanged w/w
- -0.1% YoY
- +1.2% from its bottom
- -0.8% w/w
- -0.2% m/m
- +5.7% YoY Real M1
- unchanged w/w
- +0.2% m/m
- +5.0% YoY Real M2
Bank lending rates
- 0.246 TED spread up +0.002% w/w
- 0.179 LIBOR down -0.002 w/w
JoC ECRI Commodity prices
- up 1.22 to 124.75 w/w
- -0.13 YoY
This week was generally positive, with the same concerns about the long leading indicators as I've had for the past several months. Interest rates are negative, mortgage applications and real estate loans have turned negative, and now even purchase mortgage applications are just barely positive YoY, and money supply is decelerating although still positive. Spreads between corporate bonds and treausries also were negative this week.
The shorter leading indicators of initial jobless claims are positive, even adjusting for California's computer problems. Temporary employment has turned strongly positive in the last two months. The oil choke collar is engaged but has eased off, especially as to gasoline. Commodities are neutral.
The coincident indicators once again look like they have broken out positively. Rail traffic, which had been a real concern, has broken to the upside strongly, as has shipping. Steel production is positive. Consumer spending is holding up reasonably well. Bank lending rates are at or near or at record lows. Tax withholding has also improved moderately in the last couple of weeks. House prices remain strongly positive.
Once again this week the story remains, if Washington can avoid destroying things, the economy appears ready to pick up steam again for the rest of the year. I still remain much more cautious about 2014. .
Have a nice weekend!