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Lawler: Early Read on Existing Home Sales in July

1 day ago

From housing economist Tom Lawler: Early Read on Existing Home Sales in JulyBased on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.40 million in July, up 2.5% from June’s preliminary estimate and up 0.2% from last July’s seasonally adjusted pace.On the inventory front, local realtor/MLS data, as well as data from other inventory trackers, suggest that the inventory of existing homes for sale at the end of June should be about 1.6% lower than last July.Finally, local realtor/MLS data suggest that the median US existing single-family home sales price last month was up by about 4.7% from last July.CR Note: Existing home

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Sacramento Housing in July: Sales Up 6% YoY, Active Inventory DOWN 16% YoY

1 day ago

From SacRealtor.org: July sales increase, price unchanged month-to-monthJuly wrapped up with 1,693 total sales, a 10.9% increase from the 1,527 sales of June. Compared to the same month last year (1,598), the current figure is up 5.9%. …The Active Listing Inventory increased 2.7% from 2,362 to 2,425 units. The Months of Inventory decreased from 1.5 to 1.4 Months. This figure represents the amount of time (in months) it would take for the current rate of sales to deplete the total active listing inventory. [Note: Compared to July 2018, inventory is down 15.7%] ….The Median DOM (days on market) increased from 10 to 11. The Average DOM increased from 22 to 23. “Days on market” represents the days between the initial listing of the home as “active” and the day it goes “pending.” Of the

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Q3 GDP Forecasts: Around 2%

1 day ago

From Merrill Lynch: The data boosted our 3Q GDP tracking estimate by 0.4pp to 2.1% qoq saar. 2Q was unchanged at 1.8%. [Aug 15 estimate]emphasis addedFrom Goldman Sachs: we left our Q3 GDP tracking estimate unchanged on a rounded basis at +2.1% (qoq ar). [Aug 16 estimate]From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 1.8% for 2019:Q3. [Aug 16 estimate].And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2019 is 2.2 percent on August 16, unchanged from August 15 after rounding. After this morning’s new residential construction report from the U.S. Census Bureau, the nowcast of third-quarter real residential investment growth increased from -1.2 percent to 0.7 percent. [Aug 16

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BLS: July Unemployment rates at New Series Lows in Alabama, Arkansas, Maine and New Jersey

1 day ago

From the BLS: Regional and State Employment and Unemployment SummaryUnemployment rates were lower in July in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Three states had jobless rate decreases from a year earlier, 1 state had an increase, and 46 states and the District had little or no change. The national unemployment rate, 3.7 percent, was unchanged over the month and little changed from July 2018…. Vermont had the lowest unemployment rate in July, 2.1 percent. The rates in Alabama (3.3 percent), Arkansas (3.4 percent), Maine (3.0 percent), and New Jersey (3.3 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.3 percent.emphasis addedClick on

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Comments on July Housing Starts

1 day ago

Earlier: Housing Starts decline to 1.191 Million Annual Rate in JulyTotal housing starts in July were below expectations, and starts for May and June were revised down.  The weakness was in the volatile multi-family sector.The housing starts report showed starts were down 4.0% in July compared to June, and starts were up 0.6% year-over-year compared to July 2018.Single family starts were up 1.9% year-over-year, and multi-family starts were down 4.7% YoY.This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red).Click on graph for larger image.Starts were up 0.6% in July compared to July 2018.Year-to-date, starts are down 3.1% compared to the same period in 2018.Last year, in 2018, starts were strong early in the year, and then fell off in the

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Housing Starts decline to 1.191 Million Annual Rate in July

1 day ago

From the Census Bureau: Permits, Starts and CompletionsHousing Starts:Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,191,000. This is 4.0 percent below the revised June estimate of 1,241,000, but is 0.6 percent above the July 2018 rate of 1,184,000. Single‐family housing starts in July were at a rate of 876,000; this is 1.3 percent above the revised June figure of 865,000. The July rate for units in buildings with five units or more was 303,000.Building Permits:Privately‐owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,336,000. This is 8.4 percent above the revised June rate of 1,232,000 and is 1.5 percent above the July 2018 rate of 1,316,000. Single‐family authorizations in July were at a

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Friday: Housing Starts

2 days ago

Friday:• At 8:30 AM ET: Housing Starts for July. The consensus is for 1.260 million SAAR, up from 1.253 million SAAR in June.• At 10:00 AM: University of Michigan’s Consumer sentiment index (Preliminary for August).• At 10:00 AM: State Employment and Unemployment (Monthly) for July 2019

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Earlier: NY and Philly Fed Mfg Surveys

2 days ago

Earlier from the Philly Fed: August 2019 Manufacturing Business Outlook Survey Manufacturing activity in the region continued to grow, according to results from the August Manufacturing Business Outlook Survey. The survey’s broad indicators remained positive, although their movements were mixed this month: The general activity, shipments, and employment indicators decreased from their readings last month, but the indicator for new orders increased. The survey’s future activity indexes remained positive, suggesting continued optimism about growth for the next six months.The diffusion index for current general activity fell 5 points this month to 16.8, after increasing 22 points in Julyemphasis addedEarlier from the NY Fed: Empire State Manufacturing SurveyBusiness activity increased

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CAR on California: "California home sales perk up in July"

2 days ago

The CAR reported: California home sales perk up in July for first time in more than a year, C.A.R. reportsThe lowest mortgage interest rates in nearly three years helped jump start California’s housing market to post the first year-over-year sales gain and highest sales level in 15 months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 411,630 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the July pace throughout the year. It is adjusted to account for

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NAHB: "Builder Confidence Trending Higher as Interest Rates Move Lower"

2 days ago

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 66 in August, up from 65 in July. Any number above 50 indicates that more builders view sales conditions as good than poor.From NAHB: Builder Confidence Trending Higher as Interest Rates Move LowerBuilder confidence in the market for newly-built single-family homes rose one point to 66 in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Sentiment levels have held at a solid 64-to-66 level for the past four months.“Even as builders report a firm demand for single-family homes, they continue to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of

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Industrial Production Decreased in July

2 days ago

From the Fed: Industrial Production and Capacity UtilizationIndustrial production declined 0.2 percent in July. Manufacturing output decreased 0.4 percent last month and has fallen more than 1-1/2 percent since December 2018. In July, mining output fell 1.8 percent, as Hurricane Barry caused a sharp but temporary decline in oil extraction in the Gulf of Mexico. The index for utilities rose 3.1 percent. At 109.2 percent of its 2012 average, total industrial production was 0.5 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector decreased 0.3 percentage point in July to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2018) average.emphasis added Click on graph for larger image.This graph shows Capacity Utilization. This

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Retail Sales increased 0.7% in July

2 days ago

On a monthly basis, retail sales increased 0.7 percent from June to July (seasonally adjusted), and sales were up 3.4 percent from July 2018.From the Census Bureau report:Advance estimates of U.S. retail and food services sales for July 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $523.5 billion, an increase of 0.7 percent from the previous month, and 3.4 percent above July 2018. … The May 2019 to June 2019 percent change was revised from up 0.4 percent to up 0.3 percent. emphasis added Click on graph for larger image.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).Retail sales ex-gasoline were up 0.6% in July.The second graph shows the

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Weekly Initial Unemployment Claims increased to 220,000

2 days ago

The DOL reported:In the week ending August 10, the advance figure for seasonally adjusted initial claims was 220,000, an increase of 9,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 209,000 to 211,000. The 4-week moving average was 213,750, an increase of 1,000 from the previous week’s revised average. The previous week’s average was revised up by 500 from 212,250 to 212,750.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 213,750.This was higher than the consensus forecast.

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Thursday: Retail Sales, Unemployment Claims, Industrial Production, NY and Philly Fed Mfg Surveys, Homebuilder Confidence

3 days ago

Note: On October 23rd, I will be one of three speakers at the "2020 Economic Forecast featuring the UCI Paul Merage School of Business" in Newport Beach, California, sponsored by the Newport Beach Chamber of Commerce.UCI Finance Professor Christopher Schwarz and I will be discussing the 2020 economic outlook, and Dr. Richard Afable will be discussing "The Future of the Healthcare System".This is a lunch time event (from 11:15 am to 1:30 pm) at the Balboa Bay Resort.Click here for more information and tickets.  Tickets are $65 for members, and $75 for non-members and includes lunch.   (I’m speaking for free).Thursday:• At 8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 208 thousand initial claims, down from 209 thousand last week.• Also at 8:30

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Don’t Freak Out about the Yield Curve

3 days ago

There are reasons to be concerned. The global economy is slowing. The US economy has slowed. Current policy (especially on trade) is a drag on growth. But I wouldn’t freak out about the yield curve.In mid-1998 the spread between the 10 year and the 2 year went slightly negative, and a recession didn’t start until 2001 – over 2 1/2 years later. Of course the Fed cut rates in 1998 – just like the current situation.When the spread turned solidly negative in 2000, the Fed was raising rates.   That would be a more concerning scenario.Also, with overall yields so low, I’m not sure this indicator is as useful as it has been.   The yield curve is indicating economic weakness, but I’m not currently on recession watch.Here is a graph of 10-Year Treasury Constant Maturity Minus 2-Year Treasury

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Houston Real Estate in July: All Time Record One-Month Sales, Sales up 11% YoY, Inventory Up 10%

3 days ago

From the HAR: The Houston Real Estate Market Heats Up in JulyConsumers kept Realtors across greater Houston busy in July, accounting for the greatest one-month volume of single-family home sales of all time. According to the latest monthly report from the Houston Association of Realtors® (HAR), July single-family home sales totaled 8,953. That is up 11.6 percent year-over-year and exceeds the last one-month sales volume record set in June 2018 (8,385). On a year-to-date basis, sales are 3.0 percent ahead of 2018’s record volume. Realtors point to low mortgage interest rates and the steady growth in inventory for the solid monthly performance. Housing inventory continues to outpace 2018 with a 4.3-months supply compared to a 4.1-months supply last July. However, inventory peaked in June

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MBA: Mortgage Applications Increased Sharply in Latest Weekly Survey

3 days ago

From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 21.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 9, 2019…. The Refinance Index increased 37 percent from the previous week to its highest level since July 2016, and was 196 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 12 percent higher than the same week one year ago….“The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates. Fears of an escalating

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Early Look at 2020 Cost-Of-Living Adjustments and Maximum Contribution Base

4 days ago

The BLS reported this morning:The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.7 percent over the last 12 months to an index level of 250.236 (1982-84=100). For the month, the index rose 0.2 percent prior to seasonal adjustment.CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U, and is not seasonally adjusted (NSA).• In 2018, the Q3 average of CPI-W was 246.352.The 2018 Q3 average was the highest Q3 average, so we only have to

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

4 days 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 0.3% (3.4% annualized rate) in July. The 16% trimmed-mean Consumer Price Index also rose 0.3% (3.3% 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 0.3% (4.1% annualized rate) in July. The CPI less food and energy also rose 0.3% (3.6% annualized rate) on a seasonally adjusted basis.Note: The Cleveland Fed released the median CPI details for

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NY Fed Q2 Report: "Total Household Debt Climbs for 20th Straight Quarter as Mortgage Debt and Originations Rise"

4 days ago

From the NY Fed: Total Household Debt Climbs for 20th Straight Quarter as Mortgage Debt and Originations RiseThe 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 $192 billion (1.4%) to $13.86 trillion in the second quarter of 2019. It was the 20th consecutive quarter with an increase, and the total is now $1.2 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008.Mortgage balances—the largest component of household debt—rose by $162 billion in the second quarter to $9.4 trillion, surpassing the high of $9.3 trillion in the third quarter of 2008. Mortgage originations, which include mortgage refinances, also

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MBA: "Mortgage Delinquencies Rise in the Second Quarter of 2019"

4 days ago

From the MBA: Mortgage Delinquencies Rise in the Second Quarter of 2019The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.53 percent of all loans outstanding at the end of the second quarter of 2019, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The foreclosure inventory rate, the percentage of loans in the foreclosure process, was 0.90 percent last quarter – the lowest since the fourth quarter of 1995.The delinquency rate was up 11 basis points from the first quarter of 2019 and 17 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the second quarter rose by two basis points to 0.25 percent."The unemployment rate remains quite

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Small Business Optimism Index Increased in July

4 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): July 2019 Report: Small Business Optimism IndexThe Optimism Index rose 1.4 points to 104.7, an exceptional reading. Seven of the 10 components advanced, two fell, and one was unchanged. ..Job creation slowed in July, falling to an average addition of 0.12 workers per firm on average. Finding qualified workers is becoming increasingly difficult with a 46-year record high of 26 percent reporting finding qualified workers as their number one problem. emphasis added Click on graph for larger image.This graph shows the small business optimism index since 1986.The index increased to 104.7 in

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BLS: CPI increased 0.3% in July, Core CPI increased 0.3%

4 days ago

From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in July on a seasonally adjusted basis after rising 0.1 percent in June, 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 0.3 in July, the same increase as in June. The July rise was broad-based, with increases in the indexes for shelter, medical care, airline fares, household furnishings and operations, apparel, and personal care all contributing to the increase….The all items index increased 1.8 percent for the 12 months ending July, a larger increase than the 1.6-percent rise for the period ending June. The index for all items less food and

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Tuesday: CPI, Q2 Quarterly Report on Household Debt and Credit

5 days ago

From Matthew Graham at Mortgage News Daily: Mortgage Rates Miraculously Flat Despite Massively Lower Treasury YieldsMortgage rates were unchanged to slightly higher today … despite a substantial drop in Treasury yields, mortgage rates are stuck in the mud. [Most Prevalent Rates 30YR FIXED – 3.625% – 3.75%]emphasis addedTuesday:• At 6:00 AM ET, NFIB Small Business Optimism Index for July.• At 8:30 AM, The Consumer Price Index for July from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.• At 11:00 AM, NY Fed: Q2 Quarterly Report on Household Debt and Credit

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Census Bureau to Hire "about 40,000" Temp Workers Now

5 days ago

CR Note: This will impact the August employment report. See: How to Report the Monthly Employment Number excluding Temporary Census HiringFrom the Census Bureau: U.S. Census Bureau Announces the Start of First Major Field Operation for 2020 CensusToday, the U.S. Census Bureau briefed the media on the launch of address canvassing, the first major field operation of the 2020 Census. Address canvassing improves and refines the Census Bureau’s address list of households nationwide, which is necessary to deliver invitations to respond to the census. The address list plays a vital role in ensuring a complete and accurate count of everyone living in the United States.“The Census Bureau is dedicated to ensuring that we are on track, and ready to accomplish the mission of the 2020 Census,” said

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

5 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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AAR: July Rail Carloads down 4.8% YoY, Intermodal Down 6.1% YoY

5 days ago

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission. Continuing economic uncertainty, fueled in great measure by ongoing trade disputes and worrisome economic weakness around the globe — combined with low natural gas prices and the shift from coalfired electricity in the United States — to produce another month of disappointing rail traffic in Mexico and the United States, while Canada achieved moderate growth in its intermodal traffic. Carload and intermodal traffic fell by 4.8% and 6.1%, respectively, in the United States in July versus July 2018.emphasis added Click on graph for larger image.This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA). Rail carloads have been weak over the

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Goldman: "A Bigger Growth Hit from the Trade War"

6 days ago

A few brief excerpts from a Goldman Sachs research note: We expect tariffs targeting the remaining $300bn of US imports from China to go into effect and no longer expect a trade deal before the 2020 election. …Overall, we have increased our estimate of the growth impact of the trade war. In our baseline policy scenario, we now estimate a peak cumulative drag on the level of GDP of 0.6%, including a 0.2% drag from the latest escalation. The drivers of this modest change are that we now include an estimate of the sentiment and uncertainty effects and that financial markets have responded notably to recent trade news. Based on our estimates, we have taken down our Q4 growth forecast by 0.2pp to 1.8% (qoq ar).CR Note: This isn’t enough drag to take the economy into recession, but the trade war

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Schedule for Week of August 11, 2019

7 days ago

The key reports this week are July CPI, Housing starts and Retail sales.For manufacturing, the Industrial Production report and the August New York and Philly Fed manufacturing surveys will be released.—– Monday, Aug 12th —–No major economic releases scheduled.—– Tuesday, Aug 13th —–6:00 AM ET: NFIB Small Business Optimism Index for July.8:30 AM: The Consumer Price Index for July from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.11:00 AM: NY Fed: Q2 Quarterly Report on Household Debt and Credit—– Wednesday, Aug 14th —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.—– Thursday, Aug 15th —–8:30 AM: The initial weekly unemployment claims report will be

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Vehicle Sales: Fleet Turnover Ratio

8 days ago

Back in early 2009, I wrote a couple of posts arguing there would be an increase in auto sales – Vehicle Sales (Jan 2009) and Looking for the Sun (Feb 2009).   This was an out-of-the-consensus call and helped me call the bottom for the US economy in mid-2009.I wrote an update in 2014, and argued vehicle sales would "mostly move sideways" for the next few years.Here is another update to the U.S. fleet turnover graph.This graph shows the total number of registered vehicles in the U.S. divided by the sales rate through July 2019 – and gives a turnover ratio for the U.S. fleet (this doesn’t tell you the age or the composition of the fleet).  Note: the number of registered vehicles is estimated for 2018 and 2019.The wild swings in 2009 were due to the "cash for clunkers" program. Click on

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