Economic Notes for the Week of January 21st

(+) Housing starts for December were dramatically higher, with a gain of +12.1% relative to an expected +3.3% improvement.  By way of differentiation, single-family starts were up +8.1% while mufti family continued its trend higher, growing over +20%, and the growth was seen in all areas of the country.  December building permits, on the other hand, were ‘disappointing’ to the extent that the gain was +0.3% lagged the consensus +0.5% figure.  These were led by gains in single-family permits, as opposed to multi-family.

(+) Retail sales numbers were better than anticipated, with a gain of +0.5% for December versus an expected +0.2% result.  As usual, the embedded sub-categories added more color, but didn’t change the result much.  The sales ‘ex-autos’ figure was a similar +0.3%, a shade above expected, while the ‘core/control’ group that excludes volatile autos, gasoline and building materials gained +0.6%—double what was expected (partially due to a gasoline price drop).  What we can take from all this is that more substantive elements like health and personal care components performed well, when all cyclical components removed.

(-) Business inventories rose a bit for November, but largely in line with expectations, at +0.3%.  This was a slower rate of accumulation than in the prior quarter, so a small negative in terms of overall growth measurement prospects. Read more

Economic Notes for the Week of December 24th

Manufacturing related news:

(-) Superstorm Sandy’s impact is still being felt in the manufacturing sector.  The December Empire State Manufacturing Survey came in at -8.1, weaker than the expected -1.0.  The general business conditions for New York manufacturers have been declining at a modest pace for five consecutive months.  The new orders index dropped to -3.7 from November’s +3.08.  The shipments index decreased six points from the prior month to 8.83.  Manufacturers in the New York City metro area reported roughly 7% lower revenues in October and about 5% revenue loss in November because of Sandy.  Indexes for the six-month outlook remained weaker than their levels earlier this year, though most future indexes were higher than in November.

(+) The Philadelphia Fed released its December 2012 business outlook survey.  The district’s manufacturing conditions beat market expectations.  The current activity index was up 8.1%, reversing the downward trend of -10.7% in October due to Sandy’s impact.  New orders, shipments and employment activities all improved.  The survey’s future indexes predict increased activity over the first half of next year.

Real estate related news:

(+) The National Association of Home Builders Housing Market Index rose by one point to reach 47 in December, marking its eighth consecutive rising month.  Yet the index trails the median forecast.  Meanwhile, builder confidence in the market for newly built, single-family homes grew to the highest level since April of 2006.

(-) Housing starts in November declined by 4.1% to an annual rate of 565,000 in the single-family category, lower than the October figure of 589,000.  In the multi-family category, November had an annual rate of 861,000 housing starts, 3% below October’s estimate of 888,000 but up 21.6% since November 2011.  The decline in starts was felt mostly in the West and to a lesser extent in the Midwest.  Data on housing starts were a little disappointing from month-over-month comparison but continued improving in terms of year-over-year reading.

(+) Overall building permits exceeded investors’ expectations.  Multi-family permits posted a solid 3.6% month-over-month gain with an annual rate of 899,000.  Single-family permits were at a rate of 565,000, 0.2% weaker than the October figure.

(+) Existing home sales for November rose 5.9% to an annual rate of 5.04 million, exceeding expectations by 3.8%.  Sales were 14.5% higher than last November’s 4.4 million-unit pace.  The South saw sales rise the most with a 7.9% increase and the West gained the least with a 0.8% increase.  Not only did the number of completed sales transactions pick up, but home prices also recovered due to the low supply in inventory.  The total housing inventory at the end of November fell 3.8% to 2.03 million, which represents a 4.8-month supply. This is the lowest inventory level since September 2005.  As a result, the national median existing home price was up 10.1% year-over year in November, marking the ninth consecutive monthly price increase. Read more

Economic Notes for the Week of December 10th

Some of the more important manufacturing indexes were released this week, and offered mixed results—on par with recent consensus expectations as we get close to closing out the year.

The ISM Manufacturing Index for November was weaker than anticipated in November, declining to 49.5 versus an expected 51.4 figure.  Details and rationale for these types of surveys are sometimes difficult to quantify, but it appears the hurricane played a negative role in results, as did uncertainty about the upcoming fiscal cliff.  Upcoming new orders declined, as did employment; however, the production and inventory components improved.  This is not a major disappointment, but is a little soft for a variety of well-discussed reasons. Read more

Economic Notes for November 26th


It was a relatively short week for economic data due to Thanksgiving, causing many to end the week on Wednesday afternoon, but some interesting housing numbers were worthy of mention.

Existing home sales rose in October by +2.1%, which was a surprise relative to the expected lower by -0.1% result.  The gain was the result of gains in both single-family and condo sales.  Housing starts in October also gained, in line with other housing numbers—up +3.6% which countered expectations of a -3.7% decline.  Multi-family housing continued to be the big winner on the month, while single-family starts were generally flat.  Whether there was an impact from Hurricane Sandy on the results isn’t yet clear in the preliminary data, but any adjustments should become more apparent in coming months.  Housing permits, on the other hand, fell -2.7%, which was a few tenths of a percent better than forecast.

The NAHB index of home-builder sentiment rose to 46 for November, which represented a gain from October and higher resulted than the 41 level forecast.  The levels of current sales and expected future sales both rose, which led to the bullish result.  As a leading indicator of activity, this is certainly a plus. Read more

Economic Notes for the Week of November 19th

It was a busy week as far as economic releases were concerned.  Expect many of the individual numbers to be affected at least to some degree by Hurricane Sandy and its aftermath.

Retail sales fell -0.3% for the week, which ended up being a shade weaker than the consensus drop of -0.2%.  Much of the expected decline was a direct result of the Sandy aftermath, which is a drag for obvious reasons, as well as some payback from strong weeks previous that were spurred by iPhone 5 sales.  There were some data reporting disruptions as well, which is also expected and may take time to sort out due to continued difficulty in getting infrastructure back up and running back East.

Industrial production fell -0.4% in October as well, relative to a forecasted gain of +0.2%—again, the storm was at the heart of the decline.  Manufacturing production also fell -0.9%.  While the exact impact is hard to estimate, the FEMA and Fed estimates point to Sandy holding back production by roughly a percentage point—enough to take us from growth to decline in literal terms (especially in utilities and transportation equipment).  Read more

Economic Notes for the Week of November 12th

The election was the big event this week, and it happened to be a light week for economic releases.

Non-Manufacturing ISM was a bit weaker than expected at 54.2 in October versus an expected 54.5. Some parts of the report were weak, such as forward-looking new orders and business activity, but employment strengthened. The ISM mentioned that Hurricane Sandy had no large impact on the Oct. report, but will end up affecting the Nov. figures. Stay tuned.

Initial jobless claims came in at 355k for the Nov. 3 ending week, which was a drop of 8k on the previous week and below the forecasted 365k figure. Continuing claims for the Oct. 27 week ended at 3,127k, which was below the forecasted 3,257k figure by a fair amount. In regard to the Hurricane Sandy effect, the DOL mentioned that the effect was mixed to some extent—power outages may have suppressed claims in some areas, while it may have bumped claims in others. We’ll likely see more accurate and more complete numbers in coming weeks as the damage estimates become clearer and clean-up efforts help get electrical grids and other resources back to normal. Read more