For the second week in a row, both the monthly and the weekly indicators rebounded. Jobs were up 56,000 in September (not counting the returned 47,000 Verizon strikers). July and August were also revised 100,000 higher. Aggregate hours also improved. The manufacturing workweek, a leading indicator, did slightly decline.
Auto sales came in strong, continuing their post-tsunami rebound. Construction spending was also up strongly. Factory orders declined slightly.
Most of the high frequency weekly indicators continued their rebound this week.
On the jobs front, adjusting +1.07% due to the 2011 tax compromise, there was a strong improvement in withholding taxes as shown in the Daily Treasury Statement. For the first 3 days of October, $33.7 B was collected vs. $30.6 a year ago. For the last 20 days, $133.4B was collected vs. $123.8 B last year, for a 10% YoY gain. This comes after several actual negative readings in September.
The BLS reported that Initial jobless claims rose 10,000 to 401,000. The four week average decreased to 414,000. This is still among the lowest numbers in the last 6 months.
The American Staffing Association Index, however, was flat at 90. This is only the second week that this series has broken out of its 87-88 range after 3 months. The index is once again below its reading from a year ago.
There was mixed news on housing. Housing prices, as measured by median asking house prices from 54 metropolitan areas at Housing Tracker showed that the asking prices declined a mere -0.9% YoY. This is yet another record smallest YoY decline in the 5 1/2 year history of this series (YoY measurements were possible beginning in April 2007). The areas with YoY% increases in price increased by two to 16. The areas with double-digit YoY% declines remained at only 2. If the current trend continues, nationwide asking prices will be YoY positive by next month sometime.
The Mortgage Bankers’ Association, however, reported that seasonally adjusted purchase mortgage applications decreased 1.7% last week. On a YoY basis, purchase applications were down 12.2%. The longer term trend in purchase mortgage applications has been flat for the last 17 months. Refinancing decreased -5.2% w/w despite record low interest rates.
Rail traffic also had another good – actually excellent – week. The American Association of Railroads reported that total carloads increased 4.6% YoY, up about 10,000 carloads YoY to 563,000. This is the highest level of freight since the recession. Intermodal traffic (a proxy for imports and exports) was up 10,600 carloads, or 4.4% YoY. The remaining baseline plus cyclical traffic increased over 14,000 carloads, or +4.7% YoY. Rail traffic had been negative YoY for 6 of the 12 previous weeks, and this is the best YoY comparison in months.
Retail same store sales had a good performance as well. The ICSC reported that same store sales for the week of October 1 increased a strong 3.7% YoY, and increased 0.1% week over week. Shoppertrak did not report, although Redbook also reported a 4.1% YoY gain.
The Money supply surge appears to have ended. M1 gained 1.5% for the week. It remains up 0.4% m/m, and 20.0% YoY, so Real M1 was up 16.2%.
M2 declined gained 0.4% w/w. It remained up 0.3% m/m, and 10.1% YoY, so Real M2 was up 6.3%. The YoY increase in both M1 and M2 continue at very strong levels.
Weekly BAA commercial bond rates increased .13% to 5.31%. Yields on 10 year treasury bonds increased .10% to 1.98%. The spread between the two rates thus increased again.
Oil traded at ~$82.70 a barrel midday Friday. This is about $12 below its recession-trigger level. Gas at the pump fell $.08 more to $3.43 a gallon. Measured this way, we probably are still about $.15 above the 2008 recession trigger level. Gasoline usage was down -0.3% YoY, at 8959 M gallons vs. 8989 M a year ago. Falling gasoline prices should stimulate the economy – which will cause gasoline prices to rise again.
It’s nice to have mainly positive reports for a change. The post- debt debacle stall may be lifting a bit. The rebound in auto sales should help produce a positive 3Q GDP report. With continued positive employment numbers, it is unlikely any recession began in September.
P.S. I am out of the country on vacation this coming week, so there may not be any “weekly indicators” report. In the meantime, have a nice weekend!