Weekly Indicators: I give up, you figure it out edition

- by New Deal democrat

The monthly data releases this week showed that consumer, producer, and commodity inflation were all abating. All three were now running within .1% of 2.7% YoY. Commodity prices, which had rising at as high a rate as 11% YoY last July, were declining fastest. The first consumer confidence reading for April came in a little light.

This week the high frequency weekly indicators strongly contradicted one another. Let's start with the biggest negatives.

Rail traffic remained negative, and this week there was no good rationalization.

The American Association of Railroads reported a 4% decline in traffic YoY, or -20,200 cars. This week could not be blamed on coal, as even without coal, overall traffic edged up by a mere 800 cars, or +0.2% YoY. Intermodal traffic was up 2500 carloads, or +1.1%, but other carloads decreased -22,600, or -7.7% YoY. Railfax's graph of YoY traffic remained positive but deteriorated further this week. Oddly, Railfax's data shows that all of the decline is in "baseline" materials; rail hauling of cyclically sensitive materials remains in strong improvement.



Employment related indicators were strongly contradictory:

The Department of Labor reported that Initial jobless claims surged 23,000 to 380,000 last week, the highest report since January, mirroring the big increase in the first week of April one year ago. The four week average also rose by 6750 to 368,500.

The Daily Treasury Statement showed that for the first 9 days of April, $65.0 B was collected vs. $65.5 B a year ago, an absolute decline. In the last 20 reporting days, however (a more valid measure), $141.7 B was collected vs. $121.9 B a year ago, an increase of $19.8 B, or +16.2%!

The American Staffing Association Index rose again by one to 90. It is now rising quickly, and is very close to its pre-recession readings of 2007. Should it continue at this pace, it will reach an all time high by June sometime.



Housing reports had a generally positive week:

The Mortgage Bankers' Association reported that the seasonally adjusted Purchase Index decreased -0.5% from the prior week, but was up a strong +5.5% YoY. The Refinance Index decreased another -3.8% from the previous week. Because the MBA's index was substituted for the Federal Reserve Bank's weekly H8 report of real estate loans in ECRI's WLI, I've begun comparing the two. This week for the second week in a row, and for the first time in four years real estate loans held at commercial banks were up, +0.2% on a YoY basis. On a seasonally adjusted basis, these bottomed in December and are now up +1.3% .

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were up +3.8% from a year ago. This number peaked at over +4% in February, but has now remained positive for 4 1/2 months. Via Calculated Risk, we are told that the NAR is likely to report a 3% YoY increase in median home sale prices for March. We should know by sometime this summer whether the Case-Shiller index follows the upward turn in the other indexes.

Sales were once again surprisingly positive.

The ICSC reported that same store sales for the week ending April 7 rose +0.9% w/w, and also rose +4.5% YoY. Johnson Redbook reported a 4.1% YoY gain. Shoppertrak reported a whopping 20.7% YoY gain having everything to do with the timing of Easter. The 14 day average of Gallup daily consumer spending remained high at $76, $10 above the equivalent period last year.

Money supply was also positive:

M1 rose +1.1% last week, and was also up +0.8% month over month. On a YoY basis it declined slightly to +17.5%, so Real M1 is up 15.1%. YoY. M2 was up +2.2% for the week, and also up +0.5% month over month. Its YoY advance fell slightly to +9.8%, so Real M2 was up 7.2%. Real money supply indicators continue slightly less strongly positive on a YoY basis, although not so much as in previous months. It has resumed rising slightly on a month over month basis.

Bond prices were mixed and credit spreads widened slightly:

Weekly BAA commercial bond rates rose +.04% t0 5.29%. Yields on 10 year treasury bonds fell +.06% to 2.21%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, rose slightly again to 3.07%. There has been a very slight weakening in this measure in the last two weeks.

The energy choke collar remains engaged:

Gasoline prices were flat at $3.94, the first week in months that there was not any increase. Oil was down slightly at $102.83. Both of these remain above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8681 M gallons vs. 9181 M a year ago, was off -5.4%. The 4 week moving average is off -4.0%. These are among the best comparisons in months.

Turning now to high frequency indicators for the global economy:

The TED spread fell .02 to 0.380. This index remians slightly below its 2010 peak, generally steady for the last 7 weeks, and has declined from its 3 year peak of 3 months ago. The one month LIBOR declined .001 to 0.240. It is well below its 12 month peak set 3 months ago, remains below its 2010 peak, and has returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 972 was up 44 from 928 one week ago, and up 302 from its 52 week low, although still well off its October 52 week high of 2173. The Harpex Shipping Index was flat at 395 in the last week.

Finally, the JoC ECRI industrial commodities index fell from 124.26 to 123.74. It has resumed its fade, at a pace about equal to April one year ago. This indicator appears to have more value as a measure of the global economy than the US economy.

This week we got some strongly contradictory signals from our high frequency indicators. Rail traffic, initial claims, industrial commodity prices and credit spreads all showed weakness. Three of these happen to be components of ECRI's WLI, so it is no surprise that it fell last week, although its 6 month growth metric continued to be more positive.

On the other hand, withholding taxes, temporary staffing, sales, housing, and money supply are all positive, some strongly so. Several of these are also leading indicators.

My best guess is that we are replaying last year, where seasonal increases in gasoline prices in the first part of the year cause the Oil choke collar to tighten, and weaknesses to appear in a number of indexes. I suspect this weakness will last until about midyear, and lead to the same double-dippism we heard in 2010 and 2011. This year might even be slightly worse. The weakness will cause the Oil choke collar to loosen, and the economy will become "surprisingly strong" as we head towards the end of the year.

Weekly Indicators: springtime getaway edition

- by New Deal democrat

This is a slightly truncated version of Weekly Indicators, as I'm preparing it before leaving on a weekend trip, where I will be doing my part to assist the recovery.

The monthly data releases this week included GDP, which was unrevised. The alternative GDI measure, however, came through very strong for the 4th quarter of last year. Case-Shiller house prices continued to fall. Durable goods rebounded, but did not overcome January's large drop. Chicago's PMI remained strongly positive. Consumer confidence increased. Personal income rose a little. Personal spending rose a lot. The savings rate declined sharply.

Turning to the high frequency weekly indicators , let's start with retail sales and gasoline prices and usage. If the Oil choke collar is causing the economy to constrict, here's where we should be seeing it:

The energy choke collar remains engaged:

Gasoline prices are about 8.7% higher than one year ago while usage continues to be much lower: Oil was about $3 lower at $103.50 Friday morning. Gas at the pump rose another $.05 to $3.92. Gasoline in particular is significantly above the point where it can be expected to exert a constricting influence on the economy. Gasoline usage, at 8710 M gallons vs. 8886 M a year ago, was off only -1.8% YoY. The 4 week moving average remains off -6.1%. The 4 week average is not off sufficiently from its YoY readings from the last 6 months, and the weekly number is the best in months.

Sales remained positive.

The ICSC reported that same store sales for the week ending March 24 fell - 0.5% for the week, but rose +2.7% YoY. Johnson Redbook reported a 3.3% YoY gain. The 14 day average of Gallup daily consumer spending at $78 is the highest spring reading since the recession, and indeed equals the highest at any point except for the holiday season, up 20% YoY.

Between gasoline usage and same store retail sales, as of this week anyway, consumers apparently failed to get the memo that they are supposed to be exhausted.

Turning to housing, the Mortgage Bankers' Association reported that the seasonally adjusted Purchase Index increased +3.3% from the prior week, and was also +1.0% higher YoY. The Refinance Index decreased -4.9% from the previous week, reflecting higher rates and a pause before the new government refinancing assistance program starts.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were up +3.8% from a year ago. This number peaked at over +4% in February. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales, although the NAR, Census Bureau, and FHA average sales prices have also turned positive or within a percent thereof as of their last report. Typically non-seasonally adjusted home sales prices peak in about June, so we should see in the next 3 months whether asking prices capitulate or if comparable sales prices firm.

Employment related indicators were positive or neutral:

The Department of Labor reported Initial jobless claims of 359,000 last week. The four week average declined by 3500 to 365,000, the lowest revised number in 4 years. Had there not been seasonal revisions, which increased recent weeks' numbers by 10,000 +/-1000, this week's report would have been almost exactly the same as last week's. There will be two more weeks where the new seasonal revisions will increase the number compared with the former adjustments, before turning lower later in April.

The American Staffing Association Index increased again by one to 89. It is now well above last year's level is approaching its 2007 level.

The Daily Treasury Statement shows that 20 days into March, $155.9 B has been collected in withholding taxes vs. $151.2 B a year ago, for an increase of 3.1% YoY.

Money supply, however, was flat to negative on a weekly and monthly basis:

M1 fell -0.9% last week, and was lower by -0.2% month over month. On a YoY basis it rose to +17.2%, so Real M1 is up 14.4%. YoY. M2 fell -0.3% for the week, and up only +0.1% month over month. Its YoY advance fell to +9.6%, so Real M2 was up 6.8%. The YoY comparisons are becoming tighter (although still historically high), and have generally stalled on a weekly and monthly basis for the last couple of months, which is becoming noteworthy.

Bond prices and credit spreads both fell:

Weekly BAA commercial bond rates rose +.06% t0 5.34%. Yields on 10 year treasury bonds rose +.11% to 2.32%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, declined another .05 to 3.02%. As I have previously said, narrowing credit spreads are not at all what I would expect to see if we were going into a recession. As they are a strong component of ECRI's WLI, this is probably a big part of why their growth index is no longer negative (it is exactly at 0.0). According to Prof. Moore's 1992 book, the first signal of a recovery after a recession is when the growth index rises to 1.0. In another couple of weeks, ECRI may have a lot more 'splainin' to do.

Rail traffic remained negative but with the same explanation.

The American Association of Railroads reported a -11,100 car decline in weekly rail traffic YoY for the week ending March 24, 2012, for a decline of -2.2% YoY. Intermodal traffic was up 10,400 carloads, or +4.2%, but other carloads decreased -21,500, or -7.2% YoY. The entire decline in carloads is still due to coal shipments which were off -23,600 carloads or -17.4%. Railfax's graph of YoY traffic by types remains in a positive trend but deteriorated again this week, also due entirely to the steep decline in coal hauling.

Turning now to high frequency indicators for the global economy (as of Thursday):

The TED spread rose .01 to 0.41. This index remians slightly below its 2010 peak, generally steady for the last 6 weeks, and has declined from its 3 year peak of 3 months ago. The one month LIBOR remained at 0.241. It is well below its 12 month peak set 3 months ago, remains below its 2010 peak, and has returned to its typical background reading of the last 3 years.

The Baltic Dry Index rose 22 to 930. It has risen 280 from its 52 week low, but is still well off its October 52 week high of 2173. The Harpex Shipping Index also rose 3 from 393 to 39 in the last week, up 18 from its 52 week low. 6Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Finally, through Thursday the JoC ECRI industrial commodities index fell from 125.74 to 124.47. This is the most significant decline in several months. I have serious questions how well this indicator forecasts the US as opposed to the global economy.

The monthly data showed that the rebound has been real, no recession was "imminent" 6 months ago, and it pretty much takes contraction off the table for Q1 2012 as well. Further, while gasoline prices remain an ongoing concern, and while decreased mining, shipping, and usage of coal (probably due to the non-winter winter) will exert a negative influence on Q1 GDP, the remaining high frequency indicators were virtually all positive again this week. Consumers continuing to hold up is a very good sign for the economy going forward.

Have a good weekend.

Weekly Indicators: more evidence of a turning point in housing edition

- by New Deal democrat

The monthly data releases this week were mainly about housing. Permits, an important long leading indicator, rose to a 3 year high. Starts were flat, as were existing home sales. New single family home sales also rose slightly. February leading indicators rose .7, although January was revised down from .4 to .2. The Conference Board's official measure indicates we should be going through a rough patch right now, but growth should reassert itself going into late spring and summer.

Turning to the high frequency weekly indicators , let's start with housing, in which a number of indicators add to the mounting evidence that we are at a turning point:

The Mortgage Bankers' Association reported that the seasonally adjusted Purchase Index decreased -1.0% from the prior week, and was -1.9% lower YoY. The Refinance Index decreased -4.1% from the previous week, reflecting higher rates. Because the MBA's index was substituted for the Federal Reserve Bank's weekly H8 report of real estate loans in ECRI's WLI, I've begun comparing the two to see if there are some important differences. There are. This week for the first time in nearly three years real estate loans held at commercial banks were flat (technically, -0.02%) rather than negative on a YoY basis. The seasonally adjusted data has turned up sharply since its possible bottom in December 2011.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were up +3.6% from a year ago. This number peaked at over +4% in February. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales. On the other hand, Housing Tracker's reversal of direction was supported this week by the Census Bureau's report on new home sales and by the NAR's report on existing home sales, both of which showed YoY increases in price, and by FHFA's January home sales report, which showed only a -0.8% decline YoY. Typically non-seasonally adjusted home sales prices peak in about June, so we should see in the next 14 weeks which one of the two metrics is going to turn.

Employment related indicators were all positive:

The Department of Labor reported that Initial jobless claims fell 3,000 to 348,000 last week, the lowest initial report in 4 years. The four week average declined by 500 to 355,000.

The Daily Treasury Statement showed that for the first 16 days of March, $131.7 B was collected vs. $128.6 B a year ago. In the last 20 reporting days, $162.2 B was collected vs. $157.9 B for the equivalent 20 day period in 2011, an increase of 2.7%.

The American Staffing Association Index rose by one to 88. It remains midway above its 2011 level and below its 2007 level and has begun to rise seasonally as expected.

Sales turned more strongly positive.

The ICSC reported that same store sales for the week ending March 17 rose +0.9% w/w, and also rose only +3.3% YoY. Johnson Redbook reported a 3.6% YoY gain. This week was the best week in over a month. The 14 day average of Gallup daily consumer spending rose to its highest springtime level in 4 years, after having been briefly negative YoY at the beginning of this month. Shoppertrak's data for the beginning of the month was also belatedly reported as off -3.4% YoY.

Money supply was generally positive:

M1 rose +0.4% last week, but was lower by -0.2% month over month. On a YoY basis it rose to +17.9%, so Real M1 is up 15.1%. YoY. M2 was up +0.1% for the week, and also up +0.2% month over month. Its YoY advance rose slightly to +9.9%, so Real M2 was up 7.1%. Real money supply indicators continue slightly less strongly positive on a YoY basis, although not so much as in previous months, and have generally stalled in the last couple of months.

Bond prices and credit spreads both fell:

Weekly BAA commercial bond rates rose +.17% t0 5.28%. Yields on 10 year treasury bonds rose +.21% to 2.21%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, declined another .04 to 3.07%. As I have previously said, narrowing credit spreads are not at all what I would expect to see if we were going into a recession, and are a major reason why ECRI's WLI growth index is on the verge of turning positive.

Rail traffic remained negative but with the same explanation.

The American Association of Railroads reported a -11,100 car decline in weekly rail traffic YoY for the week ending March 17, 2012, for a decline of -2.2% YoY. Intermodal traffic was up 4500 carloads, or +2.0%, but other carloads decreased -15,500, or -5.3% YoY. The entire decline in carloads is still due to coal shipments which were off -19,500 carloads or -14.7%. Railfax's graph of YoY traffic by types remains in a positive trend but deteriorated this week.

The energy choke collar remains engaged:

Gasoline prices are about 8.7% higher than one year ago while usage continues to be much lower: Oil was slightly lower at $106.87. Gas at the pump rose another $.04 to $3.87. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8379 M gallons vs. 9074 M a year ago, was off -7.7%. The 4 week moving average is off -7.8%. The 4 week average is off sufficiently both from a year ago, and from its YoY readings from the last 6 months, to be a yellow flag warning of further economic weakness.

Turning now to high frequency indicators for the global economy:

The TED spread rose .01 to 0.400. This index remians slightly below its 2010 peak, generally steady for the last 5 weeks, and has declined from its 3 year peak of 3 months ago. The one month LIBOR declined .001 to 0.241. It is well below its 12 month peak set 3 months ago, remains below its 2010 peak, and has returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 908 was up 34 from 874 one week ago, and up 258 from its 52 week low, although still well off its October 52 week high of 2173. The Harpex Shipping Index was up 7 from 386 to 393 in the last week, up 18 from its 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Finally, the JoC ECRI industrial commodities index fell from 126.06 to 125.74 I have added this report as an indicator for the global economy, which ought to suggest a severe limitation I helieve it has as a barometer of the US economy alone.

While gasoline prices remain an ongoing concern, and while decreased mining, shipping, and usage of coal (probably due to the non-winter winter) will exert a negative influence on Q1 GDP, the remaining indicators were virtually all positive this week. There is no sign whatsoever of any imminent economic contraction. To the contrary, that almost all housing and real estate data has turned flat or is rising slightly is a very good sign for the economy going forward. We'll see what happens with construction spending and the Case-Shiller indexes this coming week.

Have a good weekend.

Weekly Indicators: summer in spring edition

- by New Deal democrat

Starting with the monthly reports, retail sales were up strongly, even after accounting for inflation. Industrial production was flat for February, but January was revised significantly higher. Capacity utilization increased, but January was revised down. The Empire State and Philly Fed regional reports were generally positive. YoY inflation at all levels decreased. Consumer sentiment, a leading indicator, declined slightly.

I watch the high frequency weekly indicators because any turning pointwill show up in these indicators first. This week they remained mixed, but generally positive.

Let's review from positive to negative.

Housing reports were positive:

The Mortgage Bankers' Association reported that the seasonally adjusted Purchase Index increased +4.4% from the prior week, although it was still -0.4% lower YoY. This is the third week of a strong rebound from the bottom of its two year range. The Refinance Index decreased -4.1% from the previous week, but was still near its highest level in over half a year.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were up +3.4% from a year ago. This number peaked at over +4% a month ago. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales. Typically non-seasonally adjusted home sales prices peak in about June, so we should see in the next 15 weeks which one of the two metrics is going to turn.

Employment related indicators were positive or neutral:

The Department of Labor reported that Initial jobless claims fell 11,000 to 351,000 last week. The four week average was flat at 355,000. These remain close to the lowest readings in 4 years.

The Daily Treasury Statement showed that for thefirst 11 days of March, $89.8 B was collected wvw. $89.1 B a year ago. In the last 20 reporting days, $163.1 B was collected vs. $162.4 B for the eequivalent 20 day period in 2011, an increase of 0.4%, a very weak advance.

The American Staffing Association Index remained at 87. It remains midway between its 2011 and 2007 levels. Seasonally we want to see this move slightly higher over the next couple of weeks.

Sales remained positive.

The ICSC reported that same store sales for the week ending March 10 rose +2.3% w/w, and also rose only +1.7% YoY. Johnson Redbook reported a 3.3% YoY gain. This week was an improvement, which featured a rare sub-2% YoY reading. After a week of YoY negative readings, the 14 day average of Gallup daily consumer spending returned to weakly positive readings this week.

Money supply was generally positive to flat:

M1 was flat last week, and also fell -0.4% month over month. On a YoY basis it fell to +17.4%, so Real M1 is up 14.6%. YoY. M2 was up +0.2% for the week, and also up +0.2% month over month. Its YoY advance remained at +9.8%, so Real M2 was up 7.0%. In short, real money supply indicators continue slightly less strongly positive on a YoY basis, although not so much as in previous months, and have generally stalled in the last couple of months.

Bond prices fell and credit spreads were flat:

Weekly BAA commercial bond rates rose +.03% t0 5.11%. Yields on 10 year treasury bonds also rose +.03% to 2.00%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, reamined at 3.11%. As I have previously said, narrowing credit spreads are not at all what I would expect to see if we were going into a recession.

Rail traffic remained negative but with an explanation.

The American Association of Railroads reported a -4600 car decline in weekly rail traffic YoY for the week ending March 10, 2012. Intermodal traffic was up 9200 carloads, or +4.2%, but other carloads decreased -13,900, or -4.9% YoY. The entire decline in carloads is still due to coal shipments which were off 17,300 carloads or -13.1%. Railfax;s graph of YoY traffic by types remains in a positive trend.

The energy choke collar remains engaged:

Gasoline prices are about 7.5% higher than one year ago while usage continues to be much lower: Oil was steady at $107.06. Gas at the pump rose another $.04 to $3.83. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8415 M gallons vs. 8830 M a year ago, was off -4.8%. The 4 week moving average is off -7.2%. Both readings, while substantially less than one year ago, are in accord with readings from the last 6 months and unlike last week, do not warn of further weakness.

Turning now to high frequency indicators for the global economy:

The TED spread remained steady at 0.390. This index remians slightly below its 2010 peak, and has declined from its 3 year peak of 2 months ago. The one month LIBOR also remained at 0.242. It is well below its 12 month peak set 2 months ago, remains below its 2010 peak, and has returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 874 was up 50 from 824 one week ago, and up 224 from its 52 week low, although still well off its October 52 week high of 2173. The Harpex Shipping Index was up 10 from 376 to 386 in the last week, up 11 from its 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Finally, the JoC ECRI industrial commodities index rose slightly from 126.00 to 126.06. I have decided to report this as part of the indicators for the global economy, which ought to tell you a severe limitation I helieve it has as a barometer of the US economy.

That February real retail sales came in strong as anticipated is a welcome sign that the expansion is continuing. Same store sales were tepid and withholding taxes were weak, however. It is likely that the non-winter winter is playing havoc with railroad statistics, and may be influencing home sales. All that being said, the warning signs from last week were not repeated this week. There is some weakness, but there is no sign of any imminent contraction.

Have a nice weekend.

Weekly Indicators: spring storm watch edition

- by New Deal democrat

Monthly releases were dominated by the payrolls report, which disappointed only in that it wasn't more of a blowout than January, which was revised up to +284,000 jobs. The household survey showed over 400,000 jobs added. This survey has shown a surge of 2.448 million jobs in the last 8 months, worth noting because the household survey often leads at inflection points. The participation rate increased 0.2%. Had it remained constant, the unemployment rate would have fallen to 8.0%. The manufacturing workweek, a leading indicator, increased.

In other news, factory orders declined but less than anticipated. Labor productivity stalled, which is actually good for the addition of more jobs.

Turning to the high frequency weekly indicators which I watch because any turning pointwill show up in these indicators first. This week they were all mixed up, but importantly several warning flags of flagging consumer demand in the face of rising gas prices have been raised.

Let's review from positive to negative.

Housing reports were positive:

The Mortgage Bankers' Association reported that the seasonally adjusted Purchase Index increased +2.1% from the prior week, although it was still -7.8% lower YoY. This continues its rebound from the bottom of its nearly two year range. The Refinance Index decreased -2.0% from the previous week, still near its highest level in over half a year.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were again up +3.9%. This number has stabilized on a YoY basis for a month, which is what I would have expected. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales. One of the two is going to turn.

Bond prices and credit spreads also improved:

Weekly BAA commercial bond rates declined -0.8% t0 5.07%. Yields on 10 year treasury bonds fell -0.4% to 1.97%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, tightened again this past week to 3.11%. Once again, narrowing credit spreads are not at all what I would expect to see if we were going into a recession.

Employment related indicators were positive or neutral:

The Daily Treasury Statement showed that for the last 20 reporting days ending 6 days into March, on March 8, 2012, $156.7 B was collected vs. $152.1 B for the eequivalent 20 day period in 2011, an increase of 3.0%..

The American Staffing Association Index rose to 87 again last week. It remains midway between its 2011 and 2007 levels. Seasonally we want to see this move slightly higher over the next few weeks.

The Department of Labor reported that Initial jobless claims rose to 362,000 last week. The four week average increased 1000 by 355,000. These are still close to the lowest reading since spring 2008.

Sales remained positive, but one report flashed a warning. The ICSC reported that same store sales for the week ending March 3 rose +1.3% w/w, and also rose only +1.7% YoY. Shoppertrak did not report. Johnson Redbook reported a 3.0% YoY gain. Last week I said that "these reports have taken on added significance. If the consumer is beginning to fold, I would expect to see YoY comparisons under 2% as a warning signal." This week we got one such signal. Only one report and only one week, but it raises a yellow flag to pay extra attention.

Money supply was flat to slightly negative:

M1 declined -0.2% last week, and also fell -0.4% month over month. On a YoY basis it fell to +18.5%, so Real M1 is up 15.6%. YoY. M2 was flat for the week, and rose a tiny +0.1% month over month. Its YoY advance fell to +9.8%, so Real M2 was up 6.91%. In short, real money supply indicators continue slightly less strongly positive on a YoY basis, although not so much as in previous months, and have generally stalled in the last couple of months.

Rail traffic was negative but with an explanation. The American Association of Railroads reported a 5000 car decline in weekly rail traffic YoY for the week ending March 3, 2012. Intermoal traffic was up 13,000 carloads, or +6.0%, but other carloads decreased 19,000, or -6.2% YoY. Last week I included a graph from Railfax and said it would be troublesome if the data did not turn up. This week it turned up. The entire decline in carloads is due to coal shipments which were off 23,000 carloads or -16.6%. It appears that a warm winder, coupled with cheap natural gas prices, caused a cliff-dive in demand from power stations. Still, the decline in mining and shipment of coal is still a decline in economic activity.

Gasoline prices are more than 10% higher than one year ago while usage continues to be much lower: Oil rose slightly to $107.40. Gas at the pump rose another $.07 to $3.79. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8262 M gallons vs. 9192 M a year ago, was off -10.1%. The 4 week moving average is off -7.8%. These are the most severe YoY declines since they began last March. Last week I said that a YoY decline for more than 10% for one week, or a 4 week average decline in excess of 7.5%, would be warning signals that the Oil choke collar was having an effect. This week we got both.

Finally, the JoC ECRI industrial commodities index fell from 128.13 to 126.00. This is a strong decline in what is almost certainly the most heavily weighted component of ECRI's WLI, and suggests there will be a significant decline when that index is reported next Friday.

Turning now to high frequency indicators for the global economy:

The TED spread is at 0.390 down from 0.410 week over week. This index remians slightly below its 2010 peak, and has declined from its 3 year peak of 2 months ago. The one month LIBOR is at 0.242, down .001 from one week ago. It is well below its 12 month peak set 2 months ago, remains below its 2010 peak, and has returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 824 was up 53 from 771 one week ago, and up 174 from its 52 week low, although still well off its October 52 week high of 2173. The Harpex Shipping Index was flat at 376 in the last week, still up 1 from its 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

This is a replay of last year, when Oil's choke collar brought an accelerating recovery to a virtual standstill. Most of the usual leading indicators continue to give positive signals. But the further cutback in gasoline usage, and the admittedly only one data point showing definite slowing in retail sales are like thunder in the distance. The most important report to watch this week will be Tuesday's retail sales. Expectations are high, for more than a 1.0% increase. An increase of +0.5% or higher, while "disappointing," will still most likely be positive after inflation is reported Friday. Any report of +0.2% or less, however, should be treated like a siren warning of an approaching storm.

Have a nice weekend.

Weekly Indicators: strong crosscurrents edition

- by New Deal democrat

In the rear view mirror Q4 2011 GDP was revised up to 3.0%. Monthly releases were sharply mixed with some significant advances and some jarring declines. Consumer confidence was up strongly to a near 1 year high. This is a large component of the Conference Board's revamped LEI. Residential spending continued to increase. Vehicle sales were up sharply to nearly a 4 year high. The Chicago PMI increased strongly as well. On the other hand, the ISM manufacturing index unexpectedly fell, although still showing expansion. Personal income and spending were up only weakly. Personal consumption expenditures were flat for the fourth month in a row. Nonresidential construction spending fell. Durable goods fell strongly in January, wiping out December's similar increase and then some.

I watch the high frequency weekly indicators because, even if there is more noise, if there is a turning point, it will show up in these indicators first. In addition to the chronic issue of gasoline costs, with one or possibly two exceptions, no such turning point is evident.

Let's turn first to the negative statistic. The American Association of Railroads reported a decline in weekly rail traffic for the week ending February 25, 2012, with U.S. railroads originating 281,644 carloads, down 5 percent compared with the same week last year. Intermodal volume for the week totaled 214,402 trailers and containers, down 2.8 percent compared with the same week last year. Last week I noted that Railfax is back with some free graphs. One of them is particularly helpful in interpreting the recent swings in the AAR weekly reports. Here is a graph of the 13 week average of carloads for the last two years (black=total, green = intermodal, orange = cyclical, blue= baseline):



The YoY comparisons may have been decidedly erratic this winter because of the batch of winter storms that hit in 2011, skewing weekly comparisons. The Railfax graph shows that rail traffic continues to trend higher on a YoY basis measured over 13 weeks. If this graph does not begin to turn up in the next few weeks, we'll know that we have a problem. Until then, the jury is out.

Employment related indicators were neutral to positive:

The Department of Labor reported that Initial jobless claims remained at 351,000 last week. The four week average declined by 5000 to 354,000. This is the lowest reading since spring 2008.

The American Staffing Association Index fell by 1 to 86 last week. It remains almost midway between its levels of 2011 and 2007. Seasonally we want to see this move slightly higher over the next 4 weeks.

The Daily Treasury Statement showed that for the 20 reporting days of February 2012, $158.3 B was collected vs. $144.9 B for February 2011. Because this year had one more day of reporting than last year, the reports are not truly comparable. For the 20 reporting days ending Wednesday March 2, 2011, $154.9 B was collected, meaning the most comparable 20 day increase this year was +2.2%. This is positive but quite weak.

Gasoline prices are more than 10% higher than one year ago while usage continues to be much lower: Oil fell about $2 this week to close at $106.70. Gas at the pump rose another $.13 to $3.72. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8363 M gallons vs. 9162 M a year ago, was off -8.7%. This is one of the weakest weekly comparisons since the YoY declines began last March. The 4 week moving average is off -6.7%.

Housing reports were positive:

The Mortgage Bankers' Association reported that the Refinance Index decreased -2.2% from the previous week, still close to its highest level in over half a year. The seasonally adjusted Purchase Index increased +8.2% from the prior week, and was -4.8% lower YoY. This is a rebound from the bottom of its 21 month overall flat range.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were again up +4.1%. This number has stabilized on a YoY basis in the last month, which is what I would have expected. I expect this series to continue positive, but it will be interesting to see if it drifts lower as we hit the peak selling season. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales. One of the two is going to turn.

Sales remained positive. The ICSC reported that same store sales for the week ending February 25 were off -1.0% w/w, but increased 2.7% YoY. Shoppertrak reported +2.8% YoY gains. Johnson Redbook reported a 3.4% YoY gain. These reports have taken on added significance. If the consumer is beginning to fold, I would expect to see YoY comparisons under 2% as a warning signal. There's no such signal yet.

Money supply was mixed and Credit spreads narrowed:

M1 declined -0.3%t last week, but was up +0.1% month over month. On a YoY basis it fell to +18.6%, so Real M1 is up 15.7%. YoY. M2 fell -0.1% week over week, but was up +0.3% month over month. It was up 10.0% YoY, so Real M2 was up 7.1%. In short, real money supply indicators continue strongly positive on a YoY basis, although not so much as in previous months.

Weekly BAA commercial bond rates were flat at 5.15%. Yields on 10 year treasury bonds rose .04% to 2.01%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, tightened again this past week to 3.14%. Narrowing credit spreads are not at all what I would expect to see if we were going into a recession.

Finally, the JoC ECRI industrial commodities index continued to increase, from 127.52 to 128.13. This is almost certainly the most heavily weighted component of ECRI's WLI, and is consistent with an increase in that index again next Friday.

Turning now to high frequency indicators for the global economy:

The TED spread is at 0.410 down from 0.420 week over week. This index is back slightly below its 2010 peak, and has declined from its 3 year peak of 2 months ago. The one month LIBOR is at 0.243, down .002 from one week ago. It is well below its 12 month peak set 2 months ago, remains below its 2010 peak, and ihas now completely returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 771 was up 54 from 717 one week ago, and up 121 from its 52 week low of 3 weeks ago, although still well off its October 52 week high of 2173 (please note that even so this is nothing even remotely close to its decline during the Great Recession. This type of decline has happened 4 times since March 2009 without triggering any "double dip."). The Harpex Shipping Index rose by 1 to 376 in the last week, off of its 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Just like last year, I believe that Oil's choke collar is beginning to be felt. Nevertheless, the overall tone remains positive for now. Weekly retail sales reports and gasoline usage have assumed increased importance as warning signals for any further deterioration.

Have a nice weekend.

Weekly Indicators: dueling inflection points redux edition

- by New Deal democrat

Exactly one year ago today the title of this column was dueling inflection points edition, as both initial jobless claims and gasoline prices were at 52 week extremes, but in opposite directions. Here we are again, almost exactly in the same spot.

Employment related indicators were all positive:

The Department of Labor reported that Initial jobless claims rose by 3,000 to 351,000. The four week average declined by 6250 to 359,000. This too is the lowest reading since spring 2008.

The American Staffing Association Index rose by 1 to 87 last week. It is now right in between its levels of 2011 and 2007, higher than the former and below the latter.

The Daily Treasury Statement showed that for the first 15 reporting days of February, $120.7 B was collected vs. $115.6 one year ago, a gain of 4.4%. For the last 20 reporting days, $151.1 B was collected vs. $146.6 B a year ago, an increase of 3.3%.

On the other hand, Gasoline prices are markedly higher than one year ago while usage continues to be much lower:

Oil rose about $4.00 this week through Thursday to close over $108 a barrel. Gas at the pump rose another $.07 to $3.59. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8627 M gallons vs. 9101 M a year ago, was off -5.2%. The 4 week moving average is off -6.1%. The YoY comparisons went negative last March, and have continued substantially so since July.

Housing reports were mixed:

The Mortgage Bankers' Association reported that The Refinance Index decreased -4.8% from the previous week, but is still closetto its highest level in over half a year. The seasonally adjusted Purchase Index decreased another -2.9% from the prior week, and was -9.2% lower YoY. The purchase index is at the bottom of its 21 month overall flat range. Any further significant deterioration would have to be viewed as a violation of that trend to the downside.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +4.1%. This number has stabilized on a YoY basis in the last few weeks, which is what I would have expected. I expect this series to continue positive, but it will be interesting to see if it drifts lower as we hit the peak selling season.

Sales remained positive, while transportation turned negative:

The ICSC reported that same store sales for the week ending February 11 were off -2.2% w/w, but increased 3.2% YoY. Shoppertrak reported +6.3% YoY gains. Johnson Redbook reported a 2.9% YoY gain.

The American Association of Railroads reported a decline in weekly rail traffic for the week ending February 18, 2012, with U.S. railroads originating 281,989 carloads, down 5.2 percent compared with the same week last year. Intermodal volume for the week totaled 221,003 trailers and containers, down 5.6 percent compared with the same week last year. I am pleased to report that Railfax is back with some free graphs. While the YoY comparisons have been decidedly erratic this winter, that may be because of the batch of winter storms that hit in 2011 in the comparison period. The Railfax graphs show that rail traffic continues to trend higher on a YoY basis.

Money supply was mixed and Credit spreads were flat:

M1 was up +0.3%t last week, and also up +0.3% month over month. On a YoY basis it increased to +23.1%, so Real M1 is up 20.2%. YoY. M2 also rose +0.3% week over week, but was down -0.4% month over month. It was up 10.1% YoY, so Real M2 was up 7.2%. In short, real money supply indicators continue strongly positive on a YoY basis.

Weekly BAA commercial bond rates decreased .02% to 5.15%. Yields on 10 year treasury bonds also fell .02% to 1.97%. The credit spread between the two, which had a 52 week maximum difference in October but remained tightened this past week.

Last year I concluded my column by saying that I expected Oil to win its duel with initial jobless claims. It did as initial claims flattened and then rose in the summer. I expect the same result this year. While as I said yesterday I expect U-3 unemployment to decline to under 8% by May, that is a lagging indicator. Consumers are better able to handle $4 a gallon gasoline than they were in 2008, but depleted most of their savings since then last year. If an Oil shock is going to bring on more than a stall this spring and summer, watch the weekly same store retail sales comparisons. They held up well all last year. If their YoY readings start going under +2%, that will be a danger sign. If consumers also retrench further than they already have in terms of gasoline usage, i.e., a one week YoY usage decline of more than 10%, or a 4 week YoY decline of more than 7.5%, that would be another strong danger signal.

Have a nice weekend.

Weekly indicators: the Oil choke collar re-engages Edition

- by New Deal democrat

Monthly reports came in generally weakly positive. Retail sales were up 0.4% but only 0.2% after inflation. Industrial production was flat and capacity utilization slightly negative for January, but were revised strongly upward for December. Producer prices rose a slight 0.1% and consumer prices 0.2% in January. The YoY comparisons in inflation are all falling. The best news was that housing starts and permits, while flat on a monthly basis, remain at 3 year highs for the third month in a row.

The weekly high frequency data continued positive, with the significant exceptions of withholding tax collections (about which I'm not concerned) and energy prices (about which I very much am concerned).

Employment related indicators were generally positive:

The Department of Labor reported that Initial jobless claims fell by 10,000 to 348,000, the lowest report in close to 4 years. The four week average declined by 1000 to 365,250. This too is the lowest reading since mid-2008.

The American Staffing Association Index fell by 1 to 86 last week. It is now right in between its levels of 2011 and 2007, higher than the former and below the latter.

The Daily Treasury Statement showed that for the first 12 reporting days of February, $95.6 B was collected vs. $90.7 one year ago, a gain of over 5%. For the last 20 reporting days, $145.2 B was collected vs. $145.6 B a year ago, a decline of -0.3%. Since the beginning of this year, however, collections have been $254.3 B vs. $243.6 B for the equivalent period last year, a gain of over 4%. In other words, we had a brief rough patch in late January that does not appear to in any way to have impacted the longer term trend.

Housing reports were slightly negative:

The Mortgage Bankers' Association reported that The Refinance Index increased +0.8% from the previous week, to its highest level in over half a year. The seasonally adjusted Purchase Index decreased -8.4% from the prior week, and was -7.6% lower YoY. The purchase index is close to the bottom of its 21 month overall flat range.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +4.0%. This is the first week this number did not make a new positive record, as it is off -0.2% from last week. Still this series turned positive over two months ago and has remained so since.

Sales and transportation were weakly positive:

The ICSC reported that same store sales for the week ending February 11 were off -2.2% w/w, but increased 2.8% YoY. Shoppertrak reported +4.4% YoY gains. Johnson Redbook reported a 2.7% YoY gain. The ICSC and Johnson Redbook reports are weak relative to most reports in the last 12 months.

The American Association of Railroads reported reported that for the week ending February 11, 2012, 279,501 carloads wer originated, up 1.7% YoY. Intermodal loads were 227,207, -0.4% YoY. Total traffic was 3700 carloads above last year, or +0.7%.

Money supply was flat but Credit spreads were positive:

M1 was flat last week, and was up a weak +0.5% month over month. It remained up 18.8% YoY, so Real M1 is up 15.9%. YoY. M2 fell -0.1% week over week, but was also up weakly +0.3% month over month. It was up 10.0 YoY, so Real M2 was up 7.1%. In short, real money supply indicators continue strongly positive on a YoY basis.

Weekly BAA commercial bond rates increased .04% to 5.17%. Yields on 10 year treasury bonds rose .11% to 1.99%. The credit spread between the two, which had a 52 week maximum difference in October but once again tightened this past week.

Gasoline usage in particular continues to be much lower YoY:

Oil rose about $4.50 this week to close at $103.24 a barrel. Gas at the pump rose another $.04 to $3.52. Both of these are back above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8167 M gallons vs. 8810 M a year ago, was off -7.3%. The 4 week moving average is off -6.4%. The YoY comparisons went negative last March, and have been substantially so since July. This week's 4 week average was one of the biggest differences since then

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.420 down from 0.425 week over week. This index is back below its 2010 peak, and has declined from its 3 year peak of 7 weeks ago. The one month LIBOR is at 0.245, down .005 from one week ago. It is well below its 12 month peak set 6 weeks ago, remains below its 2010 peak, and ihas now completely returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 717 was up slightly from 715 one week ago, and up 67 from its 52 week low of 2 weeks ago, although still well off its October 52 week high of 2173 (please note that even so this is nothing even remotely close to its decline during the Great Recession. This type of decline has happened 4 times since March 2009 without triggering any "double dip."). The Harpex Shipping Index declined 11 to 379 in the last week, setting a new 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Finally, once again the Shadow Weekly Leading Index accurately foretold a decrease in ECRI's WLI, although a considerably larger one than was reported. This helps indicate that commodity prices and credit spreads are given a stronger weighting in the WLI than are purchase mortgage applications. We already have the value for 3 of its components, including the S&P 500, which rose from 1342.64 to 1361.23, a gain of about 1.5% for the week. The Dow Jones Bond Index decreased .41 to 116.66. The JoC-ECRI industrial metals index rose from 126.20 to 128.89, just slightly below a 4 month high. The first is slightly positive, the second slightly negative, but commodity prices a strong positive for the calculation of ECRI's weekly leading index next Friday.

Why I'm especially concerned about the Oil choke collar. Friend of the blog Fladem a couple of days ago wrote that:

There is evidence that oil over the last year has acted as almost a governor on the economy. As soon as the economy looks like it is about to take off, oil prices get high enough to limit the recovery. Than, we it looks like it is going to contract, the oil price goes down.

That is exactly what I mean by the "Oil choke collar." We saw this last year, and I believe we are starting to see it again now. Last year a recovery that appeared to be approaching escape velocity suddenly ground to a halt in the first quarter due mainly to a surge in energy prices (with an assist from the Japanese earthquake). Initial jobless claims, which had dropped under 400,000 for the first time since 2008, reversed. Last year there was no double dip as consumer spending (fueled by savings accumulated during the recession) remained very positive. There is not so much of a cushion now. Weekly retail sales numbers will probably assume an increased importance among the indicators.

Have a nice weekend.

Weekly Indicators: continuing positive, but watch gasoline Edition

- by New Deal democrat

There was very little in the way of monthly data released during the past week: consumer confidence fell slightly, the trade deficit widened very slightly, and consumer credit increased strongly. Turning now to the high frequency weekly indicators:

Weekly employment-related data mainly continued to impress, with the significant exception of withholding tax collections.

The Department of Labor reported that Initial jobless claims fell by 9,000 to 358,000, the second lowest report in close to 4 years. The four week average declined by 9000 to 366,750. This too is the lowest reading since mid-2008.

The American Staffing Association Index rose by 1 to 87 last week. It is now not just significantly higher than last year, but very close to its pre-recession 2007 levels.

The Daily Treasury Statement showed that for the last 20 reporting days, $146.5 B was collected vs. $146.7 B a year ago. Since for the month of January we were up 10% YoY, this reflects poor collections this past week, and raises a yellow flag for further watching.

Housing reports were also positive:

The Mortgage Bankers' Association reported that seasonally adjusted purchase mortgage applications rose +0.1% week over week, although they were still down -4.1% YoY. The overall trend remains flat since June 2010. Refinancing rose +9.4% in the last week, as rates fell to historic lows.

For the eighth week in a row, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +4.2% YoY. This is yet another week establishing the record best YoY reading since this index began nearly 6 years ago. The number of metropolitan areas with YoY positive sking prices increased to 34. The number with YoY declines of greater than 5% decreased to 5.

Sales and transportation were also positive:

The ICSC reported that same store sales for the week ending February 4 increased 3.5% YoY, and were up 1.8% week over week. Once again, Shoppertrak, did not report, however Johnson Redbook reported a 2.5% YoY gain, an improvement over the last several weeks.

The American Association of Railroads reported mixed weekly rail traffic for the week ending February 4, 2012, with U.S. railroads originating 284,546 carloads, up 6.2% compared with the same week last year. Intermodal volume for the week totaled 232,990 trailers and containers, up 16.8% compared with the same week last year. Total carloads were up 10.7% from one year ago.

Money supply and Credit spreads were generally positive:

M1 decreased -0.2% last week, and +2.2% month over month. It is also up 18.8% YoY, so Real M1 is up 15.8%. This is about 6% off peak YoY gain at the end of last summer. M2 increased +0.1% week over week, up +0.9% month over month, and up 10.2 YoY, so Real M2 was up 7.2%. This is about 3% less than its YoY reading at the crest of the tsunami.

Weekly BAA commercial bond rates decreased .16% to 5.13%. Yields on 10 year treasury bonds fell .13% to 1.88%. This had a whiff of fear of deflation, but on the other hand, the credit spread between the two had a 52 week maximum difference in October but once again continued to tighten this past week.

Gasoline usage in particular continues to be much lower YoY:

Oil rose about $1 this week to close at $98.67 a barrel. This is at the recession-trigger level calculated by analyst Steve Kopits (adjusted for general inflation). Gas at the pump rose $.04 to $3.48. Measured this way, we are back above the 2008 recession trigger level. Gasoline usage, at 8039 M gallons vs. 8524 M a year ago, was off -5.7%. The 4 week moving average is off -6.8%. Since last March the YoY comparisons have been almost uniformly negative, and substantially so since July. This week once again featured one of the biggest declines in the 4 week average since then.

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.425 down from 0.456 week over week. This index is back below its 2010 peak, and has declined from its 3 year peak of 6 weeks ago. The one month LIBOR is at 0.250, down .011 from one week ago. It is well below its 12 month peak set five weeks ago, remains below its 2010 peak, and ihas now completely returned to its typical level of the last 3 years.

The Baltic Dry Index at 695 finally broke its fall this week, up 48 from 647, although still well off its October 52 week high of 2173 (please note that even so this is nothing even remotely close to its decline during the Great Recession). The Harpex Shipping Index declined another two to 390 in the last week, although it remains just above its 52 week low of 389 set five weeks ago. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Finally, once again the Shadow Weekly Leading Index accurately foretold an increase in ECRI's WLI. We already have the value for 3 of its components, including the S&P 500, which was off a slight -0.2% for the week. The Dow Jones Bond Index increased .50 to 116.87. I don't know how I missed this, but the DJBI made an all time high on February 2 at 116.99. The JoC-ECRI industrial metals index rose from 124.41 to 126.20, reversing almost all of its decline of one week before. The first is flat, the second two significant positives for the calculation of ECRI's weekly leading index next Friday.

With the singular exceptions of tax withholding and gasoline prices, all of the data was positive this week and continues to reflect a recovery attempting to attain escape velocity. That gasoline is already close to $3.50 a gallon, however, is strong evidence that the Oil choke collar is already beginning to engage -- a choke collar that already strangled one attempt at self-sustaining recovery one year ago. Meanwhile this past week several bearish blogs -- Zero Hedge and Mish -- noticed that gasoline usage is significantly less than last year. This should be no surprise to readers of these weekly updates, as I literally started to report on this phenomenon last March, and its intensification beginning last September. Whether the development is as bearish as they believe is a subject for another day. But what is clear once again is the value of watching high frequency weekly indicators in real time.

Have a nice weekend.

Weekly Indicators: self-sustaining recovery Edition

- by New Deal democrat

Most of the monthly reports released this week were stellar. 243,000 new jobs were added, and the internals, including the leading indicators of manufacturing jobs and workweek, were positive. And no, as my colleague SilverOz pointed out, 1.2 million workers did not suddenly vanish. In fact, as Calculated Risk has shown, labor force participation increased 0.3% month over month. Factory orders, another leading indicator, also increased. Only consumer sentiment (of enhanced significance in the new LEI regime) fell. The ISM manufacturing index rose, and the ISM services index strongly so. The Chicago PMI fell slightly, but remained above 60. Personal income rose 0.5% while spending was flat. Auto sales reached a 3 1/2 year high. Construction spending was up. Prices of houses sold in November continued to decline.

Turning now to the high frequency weekly indicators:

Weekly employment-related data was generally up.

The BLS reported that Initial jobless claims fell by 10,000 to 367,000, the third lowest report in close to 4 years. The four week average declined by 1750 to 375,750. This too is close to the lowest level since mid-2008.

The American Staffing Association Index declined by 1 to 86 last week, but remains significantly higher than last year.

The Daily Treasury Statement showed that withholding for the month of January 2012, $158.7 B was collected vs. $152.9 B a year ago. Since there were only 19 reporting days this January vs. one year ago, adding in December 30 to make a 20 day vs. 20 day comparison, $169.9 B was collected this year, for a gain of 11% YoY. (Had I used February 1 instead, the comparison would have been $179.1 B this year vs. last year).

Housing data was once again mixed:

The Mortgage Bankers' Association reported that seasonally adjusted purchase mortgage applications decreased 4.3% YoY and was also down -1.7% from one week ago. The overall trend remains flat since June 2010. Refinancing fell -3.6% in the last week. Mortgage applications have trended down for the last several months, although the overall flat trendline since May 2010 is still intact.

For the eighth week in a row, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +3.8% YoY. This is the best reading in close to 5 years. The number of metropolitan areas with YoY positive sking prices increased to 32. The number with YoY declines of greater than 5% remained at 7.

Sales and transportation were weak or mixed:

The ICSC reported that same store sales for the week ending January 28 increased 3.9% YoY, and were up a slight +0.1% week over week. Shoppertrak, did not report, however, Johnson Redbook reported a 2.0% YoY gain, the weakest in 6 months.

The American Association of Railroads reported mixed weekly rail traffic for the week ending January 28, 2012, with U.S. railroads originating 283,654 carloads, down 2.8 percent compared with the same week last year. Intermodal volume for the week totaled 235,028 trailers and containers, up 5.5 percent compared with the same week last year.

Money supply and Credit spreads were also mixed:

M1 increased +0.5% last week, and +3.0% month over month. It is also up 19.0% YoY, so Real M1 is up 16.0%. This is about 5% off peak YoY gain at the end of last summer. M2 was flat week over week, and up +1.4% month over month, and up 10.1% YoY, so Real M2 was up 7.1%. This is about 3% less than its YoY reading at the crest of the tsunami.

Weekly BAA commercial bond rates increased .09% to 5.29%. Yields on 10 year treasury bonds rose .05% to 2.01%. The credit spread between the two had a 52 week maximum difference in October but tightened slightly in the last month.

Gasoline usage in particular continues to be much lower YoY:

Oil fell about $2 this week to close at $97.84 a barrel. This is slightly below the recession-trigger level calculated by analyst Steve Kopits (adjusted for general inflation). Gas at the pump rose $.05 to $3.44. Measured this way, we are slightly above the 2008 recession trigger level. Gasoline usage, at 7967 M gallons vs. 8549 M a year ago, was off -6.8%. The 4 week moving average is off -7.3%. Since last March the YoY comparisons have been almost uniformly negative, and substantially so since July. This week features one of the biggest declines in the 4 week average since then.

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.456 down from 0.500 week over week. This index is now back below its 2010 peak, and has declined from its 3 year peak of 5 weeks ago. The one month LIBOR is at 0.261, down .009 from one week ago, below its 12 month peak of four weeks ago, remains below its 2010 peak, and is approaching its typical level of the last 3 years.

The Baltic Dry Index at 726 continued to plummet, although at a lesser rate, -79 ti 647, and drastically off its October 52 week high of 2173 (although this is nothing even remotely close to its decline during the Great Recession). The Harpex Shipping Index declined two to 392 in the last week, but is above its 52 week low of 389 four weeks ago. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and has been leading at recent tops and lagging at troughs. The BDI concentrates on bulk shipments such as coal and grain, and has been more lagging at the top but has turned up first at the 2009 trough.

The Dow Jones Bond Index increased .10 to 116.37. The JoC-ECRI industrial metals index declined from 126.84 to 124.41, reversing most of the gain of one week before. The former is a positive, the latter a negative for the calculation of ECRI's weekly leading index.

While some of the weekly reports were mixed, the big picture is that, just like one year ago, the US economy is attempting to attain escape velocity for a self-sustaining recovery. Although like one year ago the Oil choke collar remains engaged, consumer conservation and increased production are weakening its hold. Global worries have continued to abate. There remains no sign of any present or imminent downturn in the economy right now. If there is a caution flag, it remains that wages have not kept up with prices for the last year, and this is manifesting itself in consumer spending and some weakening in same store retail sales.

Have a good weekend.

Weekly Indicators: continuing positive trends edition

- by New Deal democrat

First, as to the monthly reports, home sales continued poor, but consumer confidence jumped back further, completely regaining its pre-debt debacle levels. In the rear view mirror department, 4Q 2011 GDP was +2.8% although some internal components were weaker. Those few sources who thought a new recession might begin by the end of 2011 were almost certainly wrong.

Turning now to the high frequency weekly indicators:

Weekly employment-related data was mixed.

The BLS reported that Initial jobless claims rose by 25,000 to 377,000, which is still an excellent in comparison with almost any report in the last 4 years except for the week preceding. This is the last report affected significantly by seasonality. The four week average declined by 1500 to 377,500. This is close to the lowest level since mid-2008.

The American Staffing Association Index rose by 3 to 87 last week, the best January reading since 2008, and significantly ahead of last year.

The Daily Treasury Statement showed that withholding for the first 17 days of January 2012 was $138.6 B vs. $132.7 B a year ago. Adjusting +0.27% due to the 2011 tax compromise, for the last 20 reporting days, $162.0 B was collected vs. $156.9 B a year ago, a gain of +3.3%.

Housing data was mixed:

The Mortgage Bankers' Association reported that seasonally adjusted purchase mortgage applications decreased 6.5% YoY and was also down -9.7% from one week ago. The overall trend remains flat since June 2010. Refinancing fell -5.2% in the last week.

For the seventh week in a row, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +3.7% YoY. This is the best reading in close to 5 years. The number of metropolitan areas with YoY positive sking prices increased to 31. The number with YoY declines of greater than 5% decreased to 7.

Sales and transportation continued positive:

Retail same store sales were relaitvely weak. The ICSC reported that same store sales for the week ending January 21 increased 2.8% YoY, but were down -1.4% week over week. Shoppertrak, did not report, however, Johnson Redbook reported a weak 2.5% YoY gain, the weakest in 6 months.

The American Association of Railroads reported an increase in weekly rail traffic for the week ending January 21, 2012, with U.S. railroads originating 287,734 carloads, up 1.6 percent compared with the same week last year. Intermodal volume for the week totaled 219,706 trailers and containers, up 3 percent compared with the same week last year.

Money supply and Credit spreads were also positive:

M1 increased +0.4% last week, and +2.3% month over month. It is also up 18.9% YoY, so Real M1 is up 15.9%. This is about 5% off peak YoY gain at the end of last summer. M2 was up +0.2% week over week, and up +1.4% month over month, and up 10.1% YoY, so Real M2 was up 7.1%. This is about 3% less than its YoY reading at the crest of the tsunami.

Weekly BAA commercial bond rates declined .01% to 5.20%. Yields on 10 year treasury bonds rose .01% 1.96%. Falling spreads on lower rates is the best signal of improvement, although it is only for two weeks. This spread had a 52 week maximum difference in October and has been tightening slightly in the last few weeks.

Gasoline usage in particular continues to be much lower YoY:

Oil rose slightly to close at $99.56 a barrel on Thursday. This is about at the recession-trigger level calculated by analyst Steve Kopits (adjusted for general inflation). Gas at the pump was flat at $3.39. Measured this way, we are just at or slightly above the 2008 recession trigger level. Gasoline usage, at 8098 M gallons vs. 8632 M a year ago, was off -6.2%. The 4 week moving average is off -6.4%. Since last March the YoY comparisons have been almost uniformly negative, and substantially so since July. It's at least possible some of this reflects the unusually warm winter most of the country has been experiencing.

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.500 down from 0.520 week over week. This index is slightly above its 2010 peak, but has declined from its 3 year peak of 4 weeks ago. The one month LIBOR is at 0.270, down .007 from one week ago, below its 12 month peak of three weeks ago, and also remains below its 2010 peak.

The Baltic Dry Index at 726 continued to plummet -136 as it has for the last 4 weeks and further continues to decline from its October 52 week high of 2173. The Harpex Shipping Index was declining for a full year, but at 394 is above its 52 week low of 389 three weeks ago. It declined -2 last week. Please note that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and has been leading at recent tops and lagging at troughs. The BDI concentrates on bulk shipments such as coal and grain, and has been more lagging at the top but has turned up first at the 2009 trough.

Finally, the unweighted Shadow Weekly Leading Index was slightly negative this week. Next day, so was the ECRI WLI. Once again I not surprised.

Global worries have continued to abate. In the US virtually all the news is positive, but some weakly so, and mortgage applications contnue to bounce up and down along their two year bottom. There remains no sign of any present or imminent downturn in the economy right now.

Have a good weekend.

Weekly Indicators: all positive edition

- by New Deal democrat

Before turning to the high frequency weekly indicators, as usual let's briefly check out the monthly reports. Virtually all of the monthly data reported this week was positive, including industrial production, capacity utilization, the Empire State and Philly Fed reports, and housing permits and existing home sales. On the other hand, housing starts did decline month over month, and consumer prices were totally flat, meaning that in 4Q 2011 there was a very slight DEflation, normally a sign of coincident weakness.

There is still one more week where holiday seasonality can significantly influence the some of high frequency weekly indicators.

Weekly employment-related data continued positive, by one standard very strongly so:

The BLS reported that Initial jobless claims fell by 47,000 to 352,000, the best report in almost 4 years. The four week average declined by 3500 to 379,000. This is close to the lowest level since mid-2008.

The American Staffing Association Index rose by 11 to 84 last week, the best January reading since 2008. The steep rise nevertheless does show typical seasonality.

There was a surge in tax withholding in the last 20 day reporting period. the Daily Treasury Statement showed that withholding for the first 12 days of January 2012 was $109.1 B vs. $98.0 B a year ago. Adjusting +0.54% due to the 2011 tax compromise, for the last 20 reporting days, $172.0 B was collected vs. $158.1 B a year ago, a gain of +8.8%.

Housing data was strongly positive:

The Mortgage Bankers' Association reported that seasonally adjusted purchase mortgage applications increased 2.2% YoY and was also up 10.3% from one week ago. The overall trend remains flat since June 2010. Refinancing rose 27.9% in the last week as mortgage rates continued to hit new lows.

For the seventh week in a row, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +2.5% YoY. This is the best reading in close to 5 years. A majority of metro areas -- 31 -- had YoY price increases. Only 7 areas still had YoY% price declines of -5.0% or worse. Chicago remained the only area with a 10% YoY price decrease.

Sales and transportation continued strong:

Retail same store sales continued to perform well. The ICSC reported that same store sales for the week ending January 14 increased 3.0% YoY, but were flat week over week. Shoppertrak, did not report, however, Johnson Redbook reported a weak 2.8% YoY gain, the weakest in 6 months.

The American Association of Railroads reported that for the week ending January 14, 2012, with U.S. railroads originating 298,560 carloads, up 5.5 percent compared with the same week last year. Intermodal volume for the week totaled 229,091 trailers and containers, up 7.4 percent compared with the same week last year.

Money supply and Credit spreads improved:

M1 increased +1.2% last week, and +1.6% month over month. It is also up 19.4% YoY, so Real M1 is up 16.4%. This is near its peak YoY gain at the end of last summer. M2 was up +0.2% week over week, and up +1.4% month over month, and up 10.4% YoY, so Real M2 was up 7.4%. This is about 3% less than its YoY reading at the crest of the tsunami.

Weekly BAA commercial bond rates declined .07% to 5.21%. Yields on 10 year treasury bonds fell .04% 1.95%. Falling spreads on lower rates is the best signal, although it is only for one week. This spread had a 52 week maximum difference in October and has been generally flat for the last month.

Gasoline usage in particular continues to be much lower YoY:

Oil closed at $98.33 a barrel on Thursday. This is about at the recession-trigger level calculated by analyst Steve Kopits (adjusted for general inflation). Gas at the pump rose $.01 a gallon to $3.39. Measured this way, we are just at or slightly above the 2008 recession trigger level. Gasoline usage, at 7996 M gallons vs. 8775 M a year ago, was off -8.9%! The 4 week moving average is off -6.9%. Since March the YoY comparisons have been almost uniformly negative, and substantially so since July. It's at least possible some of this reflects the unusually warm winter most of the country has been experiencing.

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.520 down from 0.542 week over week. This index is slightly above its 2010 peak, but has declined from its 3 year peak of 3 weeks ago. The one month LIBOR is at 0.277, down from one week ago and below its 12 month peak of two weeks ago, and also remains below its 2010 peak.

The Baltic Dry Index at 893 has plummeted in the last 3 weeks and further continues to decline from its October 52 week high of 2173. The Harpex Shipping Index was declining for a full year, but at 396 is above its 52 week low of 389 two weeks ago. Please note that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and has been leading at recent tops and lagging at troughs. The BDI concentrates on bulk shipments such as coal and grain, and has been more lagging at the top but has turned up first at the 2009 trough.

Finally, the unweighted Shadow Weekly Leading Index was positive this week. Next day, so was the ECRI WLI. Why was I not surprised?

For the last two weeks, global worries have been abating. In the US virtually all the news is positive, but some weakly so. Still, there is no sign of any present or imminent downturn in the economy right now.

Have a good weekend.

P.S. This is a slightly truncated version due to ongoing time constraints. I will update with money supply, withholding taxes, and railroad information later if time permits.

UPDATE 1/22: the missing info has now been added.

Weekly Indicators: 2012 starts out strong edition

- by New Deal democrat

Happy New Year! In 2012 I am making some additions and improvements to this weekly recap of high frequency indicators designed to capture an up to the moment snapshot of the economy. First of all, many of the data series have seasonality and so must be tracked YoY. But one problem reporting simple YoY data is that it will lag turning points. To capture those turning points better, I am reporting new 4 month high or low YoY comparisons where applicable. Secondly, because of the concern that global weakness may itself cause a US recession, I am adding several indicators of global strength or weakness: two credit stress indexes, and two shipping indexes. Finally, I hope shortly to introduce a Shadow Weekly Leading Index, designed to replicate that ECRI series as much as possible from public data.

Before turning to the high frequency weekly indicators, let's as usual briefly check out the monthly reports. All of the monthly data reported this week was positive, although a few came in lighter than expectations. Construction spending, ISM manufacturing, ISM services, factory orders, vehicle sales, and most importantly of all, payrolls, all were positive month over month. Further, all of the leading indicator components of the ISM, factory order, and payroll numbers, also showed improvement. These numbers show an ongoing solid, if not stellar, recovery.

There are still a couple of weeks left where holiday seasonality can strongly influence the high frequency weekly indicators.

Weekly employment-related data continued positive:

The BLS reported that Initial jobless claims fell by 9,000 to 372,000. The four week average declined by 1750 to 373,250. This is the lowest level since mid-2008. Seasonality will remain significant for a couple of more weeks, so caution is still warranted in reading too much into these extremely good numbers.

The American Staffing Association Index fell by 7 to 86 last week. This is entirely due to seasonality, and in fact, the index is back above year ago levels, after stagnating in mid-2011.

Adjusting +1.07% due to the 2011 tax compromise, the Daily Treasury Statement showed that withholding for the full month of December was $164.0 B vs. $169.9 B a year ago. Since there were two more reporting days for December 2010 vs. 2011, however, this is not a concern. For the last 20 reporting days, $150.3 B was collected vs. $142.4 B a year ago, a gain of +5.5%.

Housing data was mixed:

The Mortgage Bankers' Association reported that seasonally adjusted purchase mortgage applications decreased -9.7% from two weeks ago. While they did not report a YoY figure, it is nevertheless clear that YoY purchase applications were down, continuing a decline that began about a month ago. The overall trend remains flat since over 18 months ago. Refinancing also fell -1.9% from two weeks ago.

For the sixth week in a row, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were positive, up +2.1% YoY. This is the best reading in close to 5 years. An absolute majority of metro areas -- 29 -- had YoY price increases. Since the issue in 2012 will be whether the sales price trend catches up with asking prices, or whether asking prices will "catch down" with YoY Case-Shiller data, my downside metric is changing from -10% YoY to -5% YoY. While I believe asking prices are leading sales prices, if I am wrong sellers should start to capitulate and the number of areas with -5% or greater declines should increase. Nine metropolitan areas had YoY decreases in excess of -5%. In the meantime, Chicago remained the only area with a 10% YoY price decrease.

Sales and transportation continued strong:

Retail same store sales continued to perform well. The ICSC reported that same store sales for the week ending December 31 increased strong +5.3% YoY, and were also up 1.2% week over week. Shoppertrak, did not report, however, Johnson Redbook also reported a strong 4.9% YoY gain.

The American Association of Railroads reported that total carloads increased 4.7% YoY, up about 19,100 carloads YoY to 426,900. Intermodal traffic (a proxy for imports and exports) was up 14,400 carloads, or 8.6% YoY. The remaining baseline plus cyclical traffic increased 4,600 carloads or 1.9% YoY. Total rail traffic has staged an impressive rebound in the last 4 months. This made a YoY high one week ago.

Money supply and credit spreads were tepid:

Money supply has been flat or down since its Euro crisis induced tsunami of late summer. M1 increased +1.5% last week, but only +0.5% month over month. It is still up 17.3% YoY, so Real M1 remains up 13.9%. This is about 8% under its peak YoY gain at the end of summer. M2 was flat week over week, but also up +0.5% month over month. It remains up 9.6% YoY, so Real M2 was up 6.2%. This is about 4% less than its YoY reading at the crest of the tsunami.

Weekly BAA commercial bond rates declined .03% to 5.21%. Yields on 10 year treasury bonds fell .01% 1.94%. Spreads in the last couple of months have generally widened slightly, representing increasing weakness. This spread had a 52 week maximum difference in August and tied that within the last month.

With the positive news, the Oil choke collar tightened again:

Oil closed at $101.81 a barrel on Thursday. This is above the recession-trigger level calculated by analyst Steve Kopits. Gas at the pump rose $.04 a gallon to $3.30. Measured this way, we are just about at the 2008 recession trigger level. Gasoline usage, at 8556 M gallons vs. 8853 M a year ago, was off -3.4%. The 4 week moving average is off -4.9%. Since March the YoY comparisons have been almost uniformly negative, and substantially so since July.

Now let's turn to new high frequency indicators designed to track the global slowdown/recession:

The TED spread is at 0.5723 down from 0.5800 week over week. This index is slightly above its 2010 peak, and has been increasing since summer. The one month LIBOR is at 0.295, even with one week ago. While it too has been increasing since summer, it remains below its 2010 peak.

The Baltic Dry Index at 1426 continues to decline from its October 52 week high of 2173. The Harpex Shipping Index has been declining for a full year, and at 389 is at a 52 week low. Please note that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and has been leading at recent tops and lagging at troughs. The BDI concentrates on bulk shipments such as coal and grain, and has been more lagging at the top but has turned up first at the 2009 trough.

While global worries generally continue to increase, in the US with the sole exception of mortgage applications there is no hint of any present or imminent downturn in any of the data as we begin 2012.

Have a good weekend.