Thursday , November 14 2019
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MBA: "Mortgage Delinquencies Fall to Lowest Level in Nearly 25 Years"

6 hours ago

From the MBA: Mortgage Delinquencies Fall to Lowest Level in Nearly 25 YearsThe delinquency rate for mortgage loans on one-to-four unit residential properties decreased to a seasonally adjusted rate of 3.97 percent of all loans outstanding at the end of the third quarter of 2019, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.The delinquency rate was down 56 basis points from the second quarter of 2019 and down 50 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the third quarter fell by four basis points to 0.21 percent."Mortgage delinquencies decreased in the third quarter across all loan types – conventional, VA, and in particular, FHA," said Marina Walsh, MBA’s Vice President of Industry Analysis.

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Weekly Initial Unemployment Claims increased to 225,000

8 hours ago

The DOL reported:In the week ending November 9, the advance figure for seasonally adjusted initial claims was 225,000, an increase of 14,000 from the previous week’s unrevised level of 211,000. The 4-week moving average was 217,000, an increase of 1,750 from the previous week’s unrevised average of 215,250. emphasis addedThe previous week was unrevised.The following graph shows the 4-week moving average of weekly claims since 1971.Click on graph for larger image.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 217,000.This was above the consensus forecast.

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Thursday: PPI, Unemployment Claims, Fed Chair Powell Testimony

22 hours ago

Thursday:• At 8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for 215,000 initial claims, up from 211,000 last week.• At 8:30 AM, The Producer Price Index for October from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.2% increase in core PPI.• At 10:00 AM, Testimony, Fed Chair Jerome Powell, The Economic Outlook, Before the House Budget Committee, Washington, D.C.

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Cleveland Fed: Key Measures Show Inflation Above 2% YoY in October, Core PCE below 2%

1 day ago

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.3% annualized rate) in October. The 16% trimmed-mean Consumer Price Index rose 0.3% (3.6% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.4% (4.4% annualized rate) in October. The CPI less food and energy rose 0.2% (1.9% annualized rate) on a seasonally adjusted basis.Note: The Cleveland Fed released the median CPI details for

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NY Fed Q3 Report: "Household Debt Continues to Climb in Third Quarter as Mortgage and Auto Loan Originations Grow"

1 day ago

From the NY Fed: Household Debt Continues to Climb in Third Quarter as Mortgage and Auto Loan Originations Growhe Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $92 billion (0.7%) to $13.95 trillion in the third quarter of 2019. This marks the 21st consecutive quarter with an increase, and the total is now $1.3 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.…“New credit extensions were strong

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Fed Chair Powell: The Economic Outlook

1 day ago

Testimony from Fed Chair Jerome Powell Before the Joint Economic Committee, U.S. Congress, Washington, D.C.: The Economic Outlook. Excerpts: The U.S. economy is now in the 11th year of this expansion, and the baseline outlook remains favorable. Gross domestic product increased at an annual pace of 1.9 percent in the third quarter of this year after rising at around a 2.5 percent rate last year and in the first half of this year. The moderate third-quarter reading is partly due to the transitory effect of the United Auto Workers strike at General Motors. But it also reflects weakness in business investment, which is being restrained by sluggish growth abroad and trade developments. These factors have also weighed on exports and manufacturing this year. In contrast, household consumption

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Houston Real Estate in October: Sales up 6% YoY, Inventory Up 7%

1 day ago

Another solid regional market in October.From the HAR: Buyers Maintain Demand for Houston Housing in OctoberContinued low mortgage interest rates kept consumers in a buying mood in October, powering home sales to a fourth consecutive positive month. According to the latest monthly report from the Houston Association of Realtors (HAR), sales of single-family homes across the greater Houston area totaled 7,231 in October. That is up 8.1 percent compared to a year earlier. On a year-to-date basis, home sales are 4.2 percent ahead of 2018’s record volume, making it ever more likely that 2019 will establish a new record for local real estate. …Sales of all property types climbed 6.2 percent in October, totaling 8,579 units. Total dollar volume rose 7.9 percent to $2.4 billion.…In addition to

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BLS: CPI increased 0.4% in October, Core CPI increased 0.2%

1 day ago

From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in October on a seasonally adjusted basis after being unchanged in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.8 percent before seasonal adjustment….The index for all items less food and energy rose 0.2 percent in October after increasing 0.1 percent in September. …The all items index increased 1.8 percent for the 12 months ending October, a slightly larger rise than the 1.7-percent increase for the period ending September. The index for all items less food and energy rose 2.3 percent over the last 12 months.emphasis addedCore inflation was at expectations in October. I’ll post a graph later today after the Cleveland Fed

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MBA: Mortgage Applications Increased in Latest Weekly Survey

1 day ago

From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 9.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 8, 2019…. The Refinance Index increased 13 percent from the previous week and was 188 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 15 percent higher than the same week one year ago….“Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates. Positive

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Wednesday: CPI, Fed Chair Powell Testimony, Q3 Quarterly Report on Household Debt and Credit

2 days ago

Wednesday:• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.• At 8:30 AM, The Consumer Price Index for October from the BLS. The consensus is for a 0.3% increase in CPI, and a 0.2% increase in core CPI.• At 11:00 AM, NY Fed: Q3 Quarterly Report on Household Debt and Credit• At 11:00 AM, Testimony, Fed Chair Jerome Powell, The Economic Outlook, Before the Joint Economic Committee, U.S. Congress

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Leading Index for Commercial Real Estate Increased in October

2 days ago

From Dodge Data Analytics: Dodge Momentum Index Moves Higher in OctoberThe Dodge Momentum Index increased 6.9% in October to 152.6 (2000=100) from the revised September reading of 142.7. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. October’s increase was due entirely to a recovery in institutional planning projects, which had stepped back over the previous few months. Institutional planning moved 22.8% higher in the month while commercial planning lost 0.5%.Despite the October increase, institutional projects entering planning remain 4.3% lower on a year-over-year basis compared to

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Small Business Optimism Index Increased Slightly in October

2 days ago

CR Note: Most of this survey is noise, but there is some information, especially on the labor market and the "Single Most Important Problem".From the National Federation of Independent Business (NFIB): October 2019 Report: Small Businesses Continue to Push the Economy ForwardThe small business half of the economy continued its remarkable economic streak, posting a 0.6 point gain in October’s Optimism Index. The 102.4 reading was buoyed by eight of the 10 Index components advancing, as talk of a recession waned in October. The Uncertainty Index declined 4 points but remains historically high heading into an election year…Twenty-five percent of the owners selected “finding qualified labor” as their top business problem, more than cited taxes or regulations. Reports of higher worker

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Las Vegas: Convention Attendance and Visitor Traffic up Slightly in 2019 Through September

3 days ago

During the recession, I wrote about the troubles in Las Vegas and included a chart of visitor and convention attendance: Lost Vegas. Since then Las Vegas visitor traffic recovered to new record highs.However, in 2018, visitor traffic declined 0.2% compared to 2017, but was still 7.5% above the pre-recession peak.Convention attendance declined 2.2% in 2018 from the record high in 2017.  Here is the data from the Las Vegas Convention and Visitors Authority.   Click on graph for larger image. The blue bars are annual visitor traffic (left scale), and the red line is convention attendance (right scale).  2019 is estimated based on data through September 2019.Convention attendance was up 3.3% in 2019 compared to the same period in 2018.Visitor traffic was up 0.6% in 2019 compared to the first

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U.S. Heavy Truck Sales up 3% Year-over-year in October

3 days ago

The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the October 2019 seasonally adjusted annual sales rate (SAAR).Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand in May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 479 thousand SAAR in June 2015.Heavy truck sales declined again – mostly due to the weakness in the oil sector – and bottomed at 366 thousand SAAR in October 2016.Click on graph for larger image.Following the low in 2016, heavy truck sales increased to a new all time high in September 2019 (revised).Heavy truck sales were at 536 thousand SAAR in October, down from 575 thousand SAAR in September, but up from 521 thousand

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LA area Port Traffic Down Year-over-year in October

3 days ago

Special note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.Container traffic gives us an idea about the volume of goods being exported and imported – and usually some hints about the trade report since LA area ports handle about 40% of the nation’s container port traffic.The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. Click on graph for larger image.On a

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Sunday Night Futures

4 days ago

Thank you to all the veterans! Especially to my 97 years young father who flew a Corsair off the USS Bennington in the Pacific during WWII, and also served in Korea and Vietnam. And thanks to Uncle Jack (who passed away early this year) and Uncle Kenny. Thank you all.Weekend:• Schedule for Week of November 10, 2019• Update on Yield CurveMonday:• Veterans Day Holiday: Most banks will be closed in observance of Veterans Day. The stock market will be open. No economic releases are scheduled.From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 and DOW futures are down slightly (fair value).Oil prices were down over the last week with WTI futures at $57.13 per barrel and Brent at $62.40 barrel.  A year ago, WTI was at $60, and Brent was at $69 – so oil prices are down about 5% to 10%

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Update on Yield Curve

4 days ago

Back in August I wrote: Don’t Freak Out about the Yield CurveI noted that I wasn’t even on recession watch!First, here is a graph of the current yield curve, and the yield curve back on August 27, 2019.Click on graph for larger image.The current yield curve (blue) is upward sloping (longer duration notes and bonds yield more than short term bills and notes).In August, the yield curve was inverted (red).However – as I noted in August – the Fed was cutting rates this year.Source: Daily Treasury Yield Curve RatesAnd here is an updated graph of 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity from FRED.Click here for interactive graph at FRED.In mid-1998 the spread between the 10 year and the 2 year went slightly negative, and a recession didn’t start until 2001 –

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Schedule for Week of November 10, 2019

5 days ago

The key economic reports this week are October CPI and Retail Sales.For manufacturing, October industrial production, and the November New York Fed survey, will be released this week.Fed Chair Jerome Powell will provide testimony to Congress on the Economic Outlook, on Wednesday and Thursday.—– Monday, Nov 11th —–Veterans Day Holiday: Most banks will be closed in observance of Veterans Day. The stock market will be open. No economic releases are scheduled.—– Tuesday, Nov 12th —–6:00 AM: NFIB Small Business Optimism Index for October.—– Wednesday, Nov 13th —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.8:30 AM: The Consumer Price Index for October from the BLS. The consensus is for a 0.3%

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AAR: October Rail Carloads down 8.4% YoY, Intermodal Down 7.8% YoY

6 days ago

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission. A combination of a weak domestic manufacturing sector, feeble economic growth abroad that’s limiting exports, continued trade spats that are disrupting global supply chains, and general economic uncertainty are creating strong headwinds for U.S. rail volumes.In October 2019, total U.S. rail carloads were down 8.4% from October 2018, their ninth straight decline. … Intermodal won no prizes in October either: it was down 7.8%, its biggest percentage decline since January 2009.emphasis added Click on graph for larger image.This graph from the Rail Time Indicators report shows the year-over-year changes in U.S. Carloads.Total carloads originated by U.S. railroads in October

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Early Q4 GDP Forecasts: 0.7% to 2.1%

6 days ago

From Goldman Sachs: [O]ur Q4 GDP tracking estimate declined by one-tenth to +2.1% (qoq ar), and we increased our past-quarter GDP tracking estimate for Q3 by one-tenth to +2.1% (qoq ar, compared to +1.9% as originally reported). [November 4 estimate]emphasis addedFrom the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 0.7% for 2019:Q4. News from this week’s data releases decreased the nowcast for 2019:Q4 by 0.1 percentage point. [Nov 8 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2019 is 1.0 percent on November 5, down from 1.1 percent on November 1. [Nov 5 estimate]CR Note: These very early estimates suggest real GDP growth will be between 0.7% and 2.1% annualized in Q4.

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Hotels: Occupancy Rate Decreased Year-over-year

6 days ago

From HotelNewsNow.com: STR: US hotel results for week ending 2 NovemberThe U.S. hotel industry reported nearly flat year-over-year results in the three key performance metrics during the week of 27 October through 2 November 2019, according to data from STR.In comparison with the week of 28 October through 3 November 2018, the industry recorded the following:• Occupancy: -0.3% to 62.7%• Average daily rate (ADR): +0.6% to US$126.04• Revenue per available room (RevPAR): +0.3% to US$79.05emphasis addedThe following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. Click on graph for larger image.The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression

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Seattle Real Estate in October: Sales up 7.6% YoY, Inventory down 9.3% YoY

7 days ago

The Northwest Multiple Listing Service reported Sparse supply spurring more competition among motivated home buyers in Western Washington"People are moving here, home prices will continue to increase, inventory shortages will occur. That’s our future," remarked Dick Beeson, principal managing broker at RE/MAX Northwest in Gig Harbor, upon viewing the October statistics from Northwest Multiple Listing Service.Active listings of homes and condos totaled 14,379, the lowest level since April. Compared to a year ago, last month’s selection declined more than 21% and was down 10% from September, according to the new report from Northwest MLS. The year-over-year and month-to-month volume of new listings also declined last month. On a positive note, MLS figures show system-wide gains in October’s

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MBA 2020 Economic and Morgage Forecast: Forecasting 0.9% GDP Growth in 2020

7 days ago

From the MBA: MBA 2020 Forecast: Purchase Originations to Increase 1.6 Percent to $1.29 TrillionMBA forecasts total mortgage originations will come in around $2.06 trillion this year – the best since 2007 ($2.31 trillion) – before likely decreasing to around $1.89 trillion in 2020. In 2021, MBA expects purchase originations to total around $1.33 trillion, and refinance originations to reach $432 billion ($1.74 trillion total).Mike Fratantoni, MBA’s Chief Economist and Senior Vice President for Research and Industry Technology, says geopolitical uncertainty and a slowdown in the global economy combined to be the driving force behind this year’s increased financial market volatility and drop in interest rates. He expects these headwinds to continue, which will lead to slower economic growth

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Weekly Initial Unemployment Claims decreased to 211,000

7 days ago

The DOL reported:In the week ending November 2, the advance figure for seasonally adjusted initial claims was 211,000, a decrease of 8,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 218,000 to 219,000. The 4-week moving average was 215,250, an increase of 250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 214,750 to 215,000. emphasis addedThe previous week was revised up.The following graph shows the 4-week moving average of weekly claims since 1971.Click on graph for larger image.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 215,250.This was lower than the consensus forecast.

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Thursday: Unemployment Claims

8 days ago

Thursday:• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 215,000 initial claims, down from 218,000 last week.

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First Look: 2020 Housing Forecasts

8 days ago

Towards the end of each year I collect some housing forecasts for the following year.  This is just a beginning (I’ll gather many more).The table below shows a few forecasts for 2020:From Fannie Mae: Housing Forecast: October 2019 From Freddie Mac: Freddie Mac October Forecast: Housing Market Remains Strong While Economic Slowdown LoomsFrom NAHB: Economic and Housing ForecastsNote: For comparison, new home sales in 2019 will probably be around 633 thousand, and total housing starts around 1.243 million.Housing Forecasts for 2020New Home Sales (000s)Single Family Starts (000s)Total Starts (000s)House Prices1Fannie Mae6699031,2671.5%2Freddie Mac2.8%3NAHB6299021,2861Case-Shiller unless indicated otherwise2Median House Prices3FHFA Purchase-Only Index4NAR Median Prices

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Las Vegas Real Estate in October: Sales up 7% YoY, Inventory up 6% YoY

8 days ago

This is a key former distressed market to follow since Las Vegas saw the largest price decline, following the housing bubble, of any of the Case-Shiller composite 20 cities. The Greater Las Vegas Association of Realtors reported Southern Nevada home prices stall to start fall, though still higher than last year; GLVAR housing statistics for October 2019 The total number of existing local homes, condos and townhomes sold during October was 3,571. Compared to one year ago, October sales were up 7.9% for homes and up 3.5% for condos and townhomes. As for inventory, by the end of October, GLVAR reported 7,210 single-family homes listed for sale without any sort of offer. That’s up 4.2% from one year ago. For condos and townhomes, the 1,808 properties listed without offers in October

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MBA: Mortgage Applications Decreased in Latest Weekly Survey

8 days ago

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly SurveyMortgage applications decreased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 1, 2019…. The Refinance Index increased 2 percent from the previous week and was 144 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 7 percent higher than the same week one year ago….“U.S. Treasury yields once again exhibited some intraweek volatility before declining sharply toward the end of the week. As a result, mortgage rates decreased, with the

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ISM Non-Manufacturing Index increased to 54.7% in October

9 days ago

The October ISM Non-manufacturing index was at 54.7%, up from 52.6% in September. The employment index increased to 53.7%, from 50.4%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: October 2019 Non-Manufacturing ISM Report On Business® Economic activity in the non-manufacturing sector grew in October for the 117th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 54.7 percent, which is 2.1 percentage points above the September reading of 52.6 percent. This represents

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BLS: Job Openings "Edged down" to 7.0 Million in September

9 days ago

Notes: In September there were 7.024 million job openings, and, according to the September Employment report, there were 5.769 million unemployed. So, for the nineteenth consecutive month, there were more job openings than people unemployed. Also note that the number of job openings has exceeded the number of hires since January 2015 (almost 5 years).From the BLS: Job Openings and Labor Turnover Summary The number of job openings edged down to 7.0 million (-277,000) on the last business day of September, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.9 million and 5.8 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.3 percent and 1.3 percent,

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