The big monthly data was obviously Friday’s payrolls number. While the +80,000 headline number was still anemic, the internals fared considerably better, with jobs in the two prior months revised 100,000+ higher, aggregate hours increasing strongly, the manufacturing workweek increasing, and the U6 unemployment rate declining, among other things. Auto sales in October recorded another strong month. The ISM non-manufacturing index was fair. The only worrisome number was the ISM manufacturing index, just barely above contraction for the second month in a row.
The high frrequency weekly indicators had another generally good week with a few soft patches, continuing their substantial rebound from their brief contraction of late August and September.
Last week I noted that gasoline usage had dropped precipitously YoY (nearly 10%). This week the dramatic YoY decline in usage continued, down -5.5% YoY, at 8518 M gallons vs. 9015 M a year ago. The 4 week moving average is off 4%. This may be evidence that consumers have permanently altered their gasoline usage habits towards more conservation. (h/t commenters) Oil closed at $94.50 a barrel on Friday. This is at its recession-trigger level. Gas at the pump declined $.01 to $3.45 a gallon. Measured this way, we probably are still about $.20 above the 2008 recession trigger level.
Total rail traffic has improved substantially in the last month after having turned negative for 6 of 12 weeks during the summer. The American Association of Railroads reported that total carloads increased 5.0% YoY, up about 26,100 carloads YoY to 551,700. Intermodal traffic (a proxy for imports and exports) was up 10,800 carloads, or 4.6% YoY. The remaining baseline plus cyclical traffic increased 15,200 carloads or 5.2% YoY.
The weekly jobs data continued to improve. The BLS reported that Initial jobless claims fell 5,000 to 397,000. The four week average declined to 404,500. The four week average remains close to its best reading in over 3 years.
The American Staffing Association Index remained at 91 last week. In the last couple of months, this series has resumed its upward trajectory, but remains lower YoY.
Tax withholding improved for the second week. Adjusting +1.07% due to the 2011 tax compromise, the Daily Treasury Statement showed that for the 20 days making up the reporting month of October, $139.1 B was collected vs. $131.3 a year ago, a gain of $7.8 B or 5.9%.
Weekly BAA commercial bond rates decreased .05% to 5.36%. contrarily, yields on 10 year treasury bonds rose .08% to 2.28%. This is the fourth week in a row of decreasing spreads between the two rates, a good sign, as is the decreased fear of deflation shown in treasuries.
Retail same store sales remained positive. The ICSC reported that same store sales for the week of October 29 increased 3.0% YoY, and 0.7% week over week. Shoppertrak reported that YoY sales rose 4.7% YoY and were down -2.2% week over week. Through thick and thin, the consumer has not rolled over this year.
Housing was mixed. The Mortgage Bankers’ Association reported that seasonally adjusted purchase mortgage applications increased 1.8% last week. On a YoY basis, purchase applications were down -2.1%. This is back in the range that purchases mortgage applications have had been in for the 15 months beofre September. Refinancing decreased 0.2% w/w. Refinancing has been very volatile and affected by small changes in interest rates.
Meanwhile, YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker showed that the asking prices declined -1.1% YoY. The areas with YoY% increases in price decreased by two to 15. The areas with double-digit YoY% declines increased by one (Orange Country, CA) to 3. This was the first relatively weak report in months.
Finally, as to money supply, M1 declined again last week, down -1.2%.. It remains up (barely) 0.2% m/m, and 20.0% YoY, so Real M1 was up 16.1%.
M2 also declined, down -0.4% w/w. It remained up 0.4% m/m, and 9.9% YoY, so Real M2 was up 6.0%. The YoY increase in both M1 and M2 remains near historic high levels. It will be interesting to see what continues to happen to these two series in the next several weeks, as a gauge of confidence as to whether the Euro situation is truly on its way to being solved.
With the exception of weekly money supply and housing prices, all the weekly reports were positive, some strongly so, this week.It is worth noting that the anomaly of terrible consumer confidence and positive consumer spending continues. For now, the indicators show an economy continuing its expansion.