The limited October data released this past week was mainly housing and it was positive, including existing home sales and housing starts. Permits declined slightly from their 4 year high the month before. Consumer sentiment also declined slightly from its multi-year high. The Leading Economic Indicators rose 0.2, continuing the generally slow advance this year.
The impact of Hurricane Sandy on most of the high frequency weekly indicators is abating, although there is still an effect on some of them such as initial jobless claims.
Same Store Sales and Gallup consumer spending returned to weakly positive across the board:
The ICSC reported that same store sales for the week ending November 16 fell -0,3%w/w and were up +2.5% YoY. Johnson Redbook reported a typically weak 1,8% YoY gain. Johnson Redbook has consistently been lower than the other series for consumer spending. The 14 day average of Gallup daily consumer spending as of November 21 was $69, compared with $68 last year for this period. This is Gallup’s first positive YoY week since Sandy.
Bond yields were mixed and credit spreads remained close to their recent lows:
Weekly BAA commercial bond yields increased +0.01% this week to 4.47%. Yields on 10 year treasury bonds fell -0.09%to 1.59% The credit spread between the two increased by 0.10% to 2.88. Spreads have increased in the last few weeks, but are still closer to their 52 week low.
Housing reports were again generally positive, reflecting the continued rebound in this sector:
The Mortgage Bankers’ Association reported that the seasonally adjusted Purchase Index declined -2.2% from the prior week, and is also down -6% YoY (last year at this time they were at a 2 year high). These remain in the upper part of their 2+ year range. The Refinance Index also declined -3% for the week, but this is still near its recent multi-year highs.
The Federal Reserve Bank’s weekly H8 report of real estate loans this week fell 15 w/w to 3539. The YoY comparison decreased to +1.2%, and is 1.9% above its bottom.
YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker increased +2.2% from a year ago. YoY asking prices have been positive for over 11 months.
Money supply remains generally positive:
M1 declined -0.9% for the week, but increased +1.2% month over month. Its YoY growth rate declined slightly to +13.3%. Real M1 also declined to +11.1% YoY. M2 was up +0.4% for the week, and was up 0.8% month over month. Its YoY growth rate increased slightly to 7.5%, so Real M2 remained steady at 5.3%. The growth rate for real money supply remains quite positive.
Employment related indicators were mixed, mainly due to Sandy:
The Department of labour reported that Initial jobless claims fell from 438,000 to 410,000. The four week average rose by 13,000 to 396,250. If this follows a similar pattern to that of Hurricane Katrina, by next week we should be back near a normal reading in the weekly number.
The American Staffing Association Index was again level at 95, the same level at which has been for over 2 months. The sideways trend in this index remains similar to last year.
The Daily Treasury Statement showed that for the first 14 days of November, $104.9 B was collected vs. $99.1 B a year ago, a $5.8 B increase. For the last 20 days ending on Wednesday, $142.4 B was collected vs. $136.0 B for the comparable period in 2011, an increase of $6.4 B or +4.7%. Tax collections continue to run very well.
Rail traffic remained negative YoY, but still due to coal, while the diffusion index rose again:
The American Association of Railroads reported that total rail traffic was down -7,000 carloads YoY, or -1.3%. This is another improvement over the last few weeks. Non-intermodal rail carloads were again off a large -4.3% YoY or -12,900, once again entirely due to coal hauling. Excluding coal. Negative comparisons increased again to 11. Intermodal traffic was up 5900 or +2.4% YoY.
Finally, the price of oil rose slightly again while gasoline fell, but gasoline usage was positive:
Gasoline prices fell another $.02 last week to $3.43. This is still higher than last year at this time. Oil prices per barrel increased from $87 to $88.28. Surprisingly, Gasoline usage was actually UP for one week at 8908 M gallons vs. 8898 M a year ago, or +0.1%. The 4 week average at 8739 M vs. 8602 M one year ago, was also up again, +2.2% YoY.
Turning now to the high frequency indicators for the global economy:
The TED spread declined towards its 52 week low, down to 0.22. The one month LIBOR rose slightly off its 52 week low of 0.2075, up to 0.2085. Both are well below their 2010 peaks.
The Baltic Dry Index rose from 1036 to 1090. The longer term declining trend in shipping rates for the last 3 years remains. The Harpex Shipping Index fell 3 to a new 52 week low of 364.
Finally, the JoC ECRI industrial commodities index rose from 120.04 to 120.13. It was again slightly positive YoY.
The weekly data is rebounding from Hurricane Sandy’s influence. Housing is now a consistent positive. Bonds, money supply, and bank rates also continue positive. Rail loads are positive ex-coal, negative including coal. Gas prices are helpful. Consumer spending has returned to slightly positive. Tax withholding is positive. Only credit spreads were a negative this week. Initial jobless claims are still due to Sandy, but should be more normal next week. Given the positive if muted tone, all things considered we can give thanks.
Have a nice weekend.
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