In the rear view mirror, third quarter GDP was revised upward to 2.7%. The two most important releases for October, durable goods and income and spending, we’re flat to negative in real terms. New home sales also declined. Consumer confidence was up, as we’re house prices.
Wroth the exception of initial jobless claims, the impact of Hurricane Sandy on most of the high frequency weekly indicators has abated. This makes watching this data of extra importance, since the level of any rebound will show up here well before December’s monthly data is released in January.
Same Store Sales and Gallup consumer spending indeed do show a strong rebound:
The ICSC reported that same store sales for the week ending Novmeber 23 rose 3.3%w/w and were up +4.0% YoY. Johnson Redbook also showed a strong 4.0% 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 29 was$81, compared with $73 last year for this week last year.
Bond yields were mixed and credit spreads remained close to their recent lows:
Weekly BAA commercial bond yields increased +0.09% this week to 4.56%. Yields on 10 year treasury bonds also rose .08% %to 1.67 The credit spread between the two increased by 0.01 to 2.89. Spreads have increased in the last few weeks, but are still closer to their 52 week low.
Housing reports were mixed:
The Mortgage Bankers’ Association reported that the seasonally adjusted Purchase Index rose 3% from the prior week, and is also up 4.0% 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 declined -2% 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 7 w/w to 3531. The YoY comparison, however, increased to +1.7% and the same percentage above its bottom.
YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker increased +2.3% from a year ago. As of this week, YoY asking prices have been positive for an entire year.
Money supply remains generally positive:
M1 increased +0.9% for the week, but decreased -1.1% month over month. Its YoY growth rate declined to +10.8% Real M1 also declined to +8.6% YoY. M2 was down -0.2% for the week, and was up 0.4% month over month. Its YoY growth rate fell to 7.2%, so Real M2 fell to 5.0% The growth rate for real money supply has declined significantly, but is still positive.
Employment related indicators were again mixed, mainly due to Sandy:
The Department of labour reported that Initial jobless claims fell from 410,000 to 393,000. The four week average rose by 9000 to 405,250. If this follows a similar pattern to that of Hurricane Katrina, claims will remain slightly elevated for a few more weeks.
The American Staffing Association Index rose to 96, its highest level since 2008, although it remains below 2007 and 2006 values. The general trend in this index remains similar to last year.
The Daily Treasury Statement showed that for the first 19 days of November, $133.3 B was collected vs. $126.7 B a year ago, a $6.6 B increase. For the last 20 days ending on Thursday, $141.8 Was collected vs. $133.9 B for the comparable period in 2011, an increase of $7.9 B or +5.6%. Tax collections continue to run very well.
Rail traffic remained negative YoY, but still due to coal, while the diffusion index was less negative:
The American Association of Railroads reported that total rail traffic was down -8700 carloads YoY, or -2.0%. Non-intermodal rail carloads were again off a large -4.6% YoY or -12,300, once again entirely due to coal hauling. Negative comparisons declined to 8. Intermodal traffic was up 3600 or +1.9% YoY.
Finally, the price of oil rose slightly again while gasoline fell, but gasoline usage was positive:
Gasoline prices rose .01 last week to $3.44. This is still higher than last year at this time. Oil prices per barrel increased from $87 to $88.28. Surprisingly, Gasoline usage was down for one week at 8427 M gallons vs. 8769 M a year ago, or -3.9%. The 4 week average at 8635 M vs. 8664 M one year ago, was off a very slight -0.3% YoY.
Turning now to the high frequency indicators for the global economy:
The TED spread rose from its 52 week low of 0.22 to 0.24. The one month LIBOR rose from 0.2085 to 0.2146. Both are well below their 2010 peaks.
The Baltic Dry Index fell 4 to 1086. The longer term declining trend in shipping rates for the last 3 years remains. The Harpex Shipping Index fell 1 more to yet another new 52 week low of 363.
Finally, the JoC ECRI industrial commodities index rose from 120.13 to 121.47. It was again slightly positive YoY.
While the monthly data from November will suffer from the impact of Sandy, the weekly data is already showing a rebound. Consumer spending and tax withholding are particularly positive. Money supply, bank lending rates, and credit spreads, while off their best levels, are still positives. Housing is now a consistent positive. Shipping and rail loads are still under pressure, but this may entirely be to coal. Gas usage is neutral.
While manufacturing looks to be in recession, and income has contracted slightly, most of the rest of the economy still appears to be moving forward as reflected by the most timely, weekly, data.