Sunday, February 22, 2015

January reports on producer prices, industrial production, and new residential construction, et al

oddly, all three of the widely watched national economic releases this week were released within a 45 minute span on Wednesday morning: Industrial Production and Capacity Utilization for January from the Fed, New Residential Construction for January (pdf) from the Census Bureau, and the Producer Price Index for January from the BLS...the past week also saw the releases of the first two Fed regional manufacturing surveys for February, the Empire State Manufacturing Survey from the New York Fed, covering New York and northern New Jersey, and the Philadelphia Fed's February Manufacturing Business Outlook Survey, covering Pennsylvania, southern New Jersey, and Delaware...significant paragraphs of those two reports, as well as from several weekly reports, can be accessed on one page at the Research Economics page at OneWall.com..

January Producer Prices Fall 0.8% on Widespread Lower Prices, Margins

probably the most interesting economic report of those released this week was the January report on the Producer Price Index from the Bureau of Labor Statistics, which showed the headline producer price index for final demand had fallen 0.8% for the month, after falling 0.2% in both November and December, and which left year over year wholesale inflation unchanged...both the monthly decrease and the year over year change are the greatest drop that this new PPI index has ever shown in the two years of its reformulated data, while prices for wholesale goods saw their largest drop in more than five years when compared to the old PPI...

every subindex of the PPI except for final demand for trade services was lower in January, as the price index for final demand for goods fell by 2.1%, led by a 10.3% decrease in prices for wholesale energy products, with a 1.2% increase in wholesale electricity prices offsetting a 24.0% decrease in wholesale gasoline prices and decreases of 19.6% and 19.2% for home heating oil and diesel fuel respectively... the index for final demand for foods was also down 1.1%, the largest drop in finished food prices since March, as fresh eggs fell 21.7% and pork prices were 7.6% lower, while seafood prices rose 10.1% and vegetable prices rose 8.1%....excluding food and energy, even core wholesale prices, as measured by the index for final demand for goods less foods and energy, fell 0.2%, with drops of 9.1% in wholesale prices for industrial chemicals and 1.1% for transformers and power regulators leading core prices lower...

in addition, the index for final demand for services fell by 0.2%, as the index for final demand for transportation and warehousing services fell 0.8%, as passenger airline margins fell 1.0% and margins for both railroads and freight truckers fell 0.7%...meanwhile, the index for  final demand for trade services, a measure of the margins received by retailers and wholesalers, rose by 0.5% as a 9.3% increase in the margins received by flooring and floor coverings retailers and generally higher margins for other retailers and wholesalers offset a 31.1% decrease in margins received by TV, video, and photographic equipment retailers....finally, the index for final demand for services less trade, transportation, and warehousing services fell 0.4% on a 4.5% decrease in prices for securities brokerage, dealing, investment advice, and related services, a 3.8% decrease in flight arrangement services, and a 1.3% decrease in prices for outpatient care, which were partially offset by a 5.0% increase in passenger car rental margins...

this report also showed the price index for processed goods for intermediate demand fell by 2.8% in January, the largest drop since a 4.1% drop in December 2008, leaving intermediate goods 5.5% lower priced than a year ago....more than half of that drop could be accounted for by an 8.3% drop in prices for intermediate energy goods, again led by a 24.0% decrease in intermediate gasoline prices...but the index for processed foods and feeds also dropped by 2.5%, as intermediate dairy products were priced 5.7% lower and prepared animal feeds fell 3.6%....and even core intermediate goods were lower, as the price index for processed goods for intermediate demand less food and energy fell 1.3% after falling 0.6% in December and 0.5% in November, with organic chemicals down 11.5%, agricultural chemicals down 6.4%, and plastic resins down 4.7%...

in addition, the price index for intermediate unprocessed goods fell by 9.4% after falling 6.4% in December and is now 18.4% below the level of a year ago, on a 23.6% drop in the index for raw energy materials led by a 30.6% decrease in crude oil prices and a 1.8% drop in producer prices for unprocessed foods and feeds, largely on an 18.7% drop in prices for slaughter hogs, while even the core index for raw materials fell 0.7% on a 3.5% drop in scrap copper prices and a 3.1% drop in scrap paper prices.....

finally, the price index for services for intermediate demand fell 0.2% in January, as a 0.3% decrease in the index for  transportation and warehousing services for intermediate demand was offset by a 0.4% decrease in prices for intermediate services less trade, transportation, and warehousing, while prices for trade services for intermediate demand were unchanged...over the 12 months ended in January, the price index for services for intermediate demand rose 1.5%...

the implication of widespread lower prices such as this report reveals is that yet to be released January reports that are reported in dollars are likely to show lower sales, orders, and inventories...hence, we should not be surprised if we see that the coming releases for such reports as the January advance report on durable goods, January wholesale sales and inventories, and January factory orders come in nominally lower than December...the key to reading those reports will be to examine which of the components are down and by how much, to reveal whether the declines are actual declines in goods ordered, sold, manufactured or inventoried, or whether the reports are actually showing an increase which just seems like a decrease because of lower prices...

January Industrial Production Up 0.2% on Cold, Revisions

industrial production increased a bit in January on above normal utility usage due to colder than normal weather in the heavily populated eastern US....the Fed's G17 release on Industrial production and Capacity Utilization for January indicated that industrial production rose 0.2% from a December reading which was revised from a decrease of 0.1% to a decrease of 0.3%...furthermore, previously reported increases in September and November were reduced by 0.2%, and the unchanged result from October was revised to a 0.1% decline...as a result, the industrial production index, which is benchmarked to 2007 production being equal to 100.0, actually fell from the 106.5 reported last month to 106.2 in January, with the index for December revised to 106.0....the manufacturing index, which accounts for roughly 70% of the industrial composite, also rose 0.2% to 102.1 in January, essentially by virtue downward revisions of the indexes for previous months; the manfacturing index for December was revised from 102.5 to 102.0, the November index was revised from 102.2 to 102.0, and the October manufacturing index was revised from 100.9 to 100.8...after revisions, that left the manufacturing index up 5.6% from last January's weather depressed reading...and in this year as well, the seasonally adjusted utility index rose 5.1% to 105.6 as electricity production rose 2.0% and natural gas output increased by 4.4% above seasonal norms, but even so, the utility index is still 6.6% below last January's reading...meanwhile, the mining index, which includes oil & gas production, fell 1.0% to 133.3 in January, after falling by 1.0% in December, as lower oil prices continued to slow the higher cost extraction processes, even as the index remained 8.5% higher than a year ago...

in the associated report on capacity utilization, which is the percentage of our plant and equipment that was in use during the month, the Fed found that the utilization rate for total industry was unchanged at 79.4% in January, although December's operating rate was revised down from the originally reported 79.7% to achieve that...78.1% of our manufacturing capacity was in use in January, up from the downwardly revised oprating  rate of 78.0% in December, with NAICS classified durable goods manufacturing operating at 78.0% of capacity, up from 77.9% in December, while NAICS non-durable manufacturers were operating at a 79.9% rate, down from 80.0% capacity utilization in December... meanwhile, capacity utilization by the 'mining' industry fell 1.5% from 88.5% to 87.5%, reflecting a pullback in drilling by the oil and gas industry due to lower oil prices, while the operating rate for utilities rose from 76.4% to 78.2%, reflecting above normal usage of gas and generating capacity due to below normal temperatures.... 

for more details, the Fed's G17 release has several paragraphs on industrial production and capacity utilization by both industry group and market group near the end of the opening page...following that, there are links to 3 charts and 14 pages of tables...in covering this report, we have generally accessed the following two tables for a more detailed breakdown of the changes in production and utilization by types of manufacturer..

for the associated graphics, Robert Oaks includes nine primary FRED graphs in his coverage of this report here: Industrial Production Expands to Mediocre Growth for January 2014

January Housing Starts and Building Permits Mostly Unchanged

there was not much noteworthy about the report on New Residential Construction for January (pdf) from the Census Bureau; they estimated that starts on new housing units were at a seasonally adjusted annual rate of 1,065,000, which was 2.0 percent (±10.4%)* below the estimated and revised December pace, a range that indicates they don't have sufficient data to determine whether housing starts rose or fell for the month...and while housing starts were 18.7 percent (±14.5%) higher than January of last year, that was a month where housing was severely impacted by the "polar vortex" and associated storms that clobbered 1st quarter GDP.....the unadjusted estimates from which those annual rates were extrapolated indicated an estimated 71,800 total units were started in January, down from 73,000 in December, with just 44,300 of those single family dwellings, while construction was started on 27,100 apartment units in buildings with 5 or more units....

the monthly data on new building permits, with its smaller margin of error,  are probably a better monthly indicator of new construction trends than the volatile and often revised starts data... in January, Census estimated new permits were issued at a seasonally adjusted annual rate of 1,053,000, which was 0.7 percent (±0.6%) below the revised December annual rate of 1,060,000 but was still 8.1 percent (±2.0%) above the 974,000 annual rate estimated for new permits in January of last year...those estimates were extrapolated from the unadjusted estimate of 69,600 new permits issued in January, which was down from the estimated 83,600 new permits issued in December...
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NB: there are at least 5 dozen linked articles covering the range of this week's negotiations between Greece and the Troika at the end of this week's globalglassonion...& my coverage of last week's activity in the oil patch is here: rig count still falling, oil production and oil glut still rising…


(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

Sunday, February 15, 2015

January retail sales; gauging the impact of December inventories on 4th quarter GDP revisions

it was a fairly light week for economic reports, but there was a widespread misinterpretation of December inventory data by the media we'll discuss today...the key release this past week was on retail sales for January from the Census Bureau; in addition, there were also two Census reports on inventories: December wholesale trade and December business inventories, giving us an early look at what impact that the change in inventories might have on fourth quarter GDP, which were only estimated when the BEA reported on GDP two weeks ago...this week also saw the import and export price index for January and the Job Openings and Labor Turnover Survey (JOLTS) for December from the Bureau of Labor Statistics...

Retail Sales Fall 0.8% on Drop in Gasoline Prices

retail sales started the new year down, but the drop in sales was due to lower gasoline prices...specifically, the Advance Retail Sales Report for January (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales were at $439.8 billion in January, which was a decrease of 0.8% (±0.5%) from the December sales of $443.3 billion, but 3.3 percent (±0.9%) above sales in January of last year...December's sales were revised up by less than 0.1%, from $442.9 billion, but the reported percentage decline from November remained unchanged at 0.9% lower; nonetheless, the revision to 4th quarter GDP will likely be minimal...estimated unadjusted sales in January, extrapolated from surveys of a small sampling of retailers, indicated sales fell almost 21% to $399,338 million, from $506,062 million in December, and were up 2.8% from the $388,279 million of sales in January a year ago, so once again the seasonal adjustments were a major factor in this report...although this report appears weak on first perusal, we wont be able to tell if this is a real decline in goods sold until we get the consumer price data next week...

once again we'll include the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf.....the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from December to January in the first sub-column, and then the year over year percentage change for those businesses since last January in the 2nd column; the second pair of columns gives us the revision of last month’s October advance monthly estimates (now called "preliminary") as revised in this report, likewise for each business type, with the November to December change under "Nov 2014 revised" and the revised December 2013 to December 2014 percentage change in the last column shown...for reference, here is what those December percentage changes looked like before this month's revision....   

January 2015 retail sales 

from the above table we can see that January sales at gas stations were down 9.3% to $38,952 million, and as they accounted for 8.8% of total retail sales, retail sales excluding gas station sales were nearly stagnant, falling less than 0.1%...sales at motor vehicle and parts dealers, which account for more than 20% of this report, contributed to the January sales decrease, as they fell 0.5% to $90,778 million, leaving retail sales excluding the automotive group down 0.9%; take out car dealers and gasoline, and sales were up 0.2%...from the first column, we can see that the other businesses showing weakness in January were the specialty stores, such as sporting goods, book and music stores, which saw their seasonally adjusted sales fall 2.6% to $7,460 million, clothing stores, where sales fell 0.8% to $21,435 million, and furniture stores, where sales fell 0.7% to $8,656 million...meanwhile, miscellaneous store retailers saw January sales rise 2.6% to $10,213 million, and sales at bars and restaurants rose 0.8% to $50,067....however, since we don't know the direction or magnitude of the price changes in the goods sold, we cannot guess how this report will impact 1st quarter output, but it’s fair to say we can be reasonably sure that it will likely be lower than the 4th quarter, because nominal seasonally adjusted sales in January were somewhat lower than those of both October and November....

again, since the overall revision to December retail sales was less than 0.1%, this report will have scant impact on 4th quarter GDP revisions...however, within the business types, there were some notable revisions to the original advance report from December (percentage change table shown here) with this release (shown in 3rd column above)...the largest revision was in sales at miscellaneous stores, which were reportedly down 1.9%, and have now been revised to show sales up 0.6%...other business types seeing upward revisions included building material and garden supply centers, originally shown with a 1.9% decrease in sales, which has now been revised to a decrease of 0.7%, and for restaurants and bars, where sales were originally reported up 0.8%, which are now revised to show December sales 1.4% higher...meanwhile, sales at gas stations, first reported down 6.5%, are now shown to have seen sales fall 7.4%, while December sales at clothing stores were revised from a decrease of 0.3% to a drop of 1.2%, and sales at specialty stores, such as sporting goods and bookstores, were revised from a decrease of 0.2% to a drop of a full one percent...

Potential Impact of December Inventories on 4th Quarter GDP Revisions

the other two reports we'll look at this week were on December sales and inventories for different sectors of the economy...here's a simplistic way to think about how these reports affect GDP: if the economy consumes 10 apples at a dollar a piece in November, and 11 apples at 90 cents each in December, sales have gone down by 1% in December but monthly GDP is up 10%…if there are 10 apples on the shelf in both months, reported inventories will go down 10% in December, but the inventory contribution to GDP will stay the same…with that in mind, let's look at what was reported..  

the first release on inventories we saw this week was the Wholesale Trade, Sales and Inventories Report for December (pdf) from the Census Bureau, which estimated that seasonally adjusted sales of wholesale merchants fell 0.4 percent (+/-0.9%)* to $454.6 billion from the revised November estimate of $451.7 billion, but were up 1.4 percent (+/-0.9%) from December a year earlier...the November preliminary sales estimate was revised down by $0.6 billion or 0.1%, and hence was 0.4% lower than October...wholesale sales of durable goods were up 1.1 percent (+/-1.4%)* over November and were up 7.3 percent (+/-1.8%) from December a year ago, as wholesale sales of construction materials rose 5.4%, wholesale sales of electrical equipment rose 3.4% while wholesale computer equipment sales fell 2.1% from November...seasonally adjusted sales of nondurable goods were down own 1.7 percent (+/-1.1%) from November and down 3.5 percent (+/-1.9%) from last December, as wholesale sales of petroleum and petroleum products fell by 13.7%, largely due to lower prices...excluding oil sales, sales of non durable goods rose 2.1% in December, as wholesale drug sales rose 4.8% and miscellaneous wholesales sales rose 4.6%....note that the asterisks indicate that Census does not yet have sufficient statistical evidence to determine whether sales actually rose of fell for the periods indicated....

this release also reported that seasonally adjusted wholesale inventories were valued at $547.6 billion at the end of December, 0.1% (+/-0.4%)* higher than the revised November level and 6.7% (+/-0.9%) above last December's level, while November's preliminary inventory estimate was revised up by $0.1 billion, statistically insignificant...wholesale durable goods inventories were up 0.2 percent (+/-0.5%)*  from November and up 7.8 percent (+/-1.4%) from a year earlier, with wholesale inventories of computers, peripherals and software up 2.6% while while inventories of electrical equipment and appliances fell 1.7%....inventories of nondurable goods were down 0.1 percent (+/-0.4%)* from November while they were up 4.9% (+/-1.2%) from last December, as wholesale inventories of chemicals were up by 3.4% while wholesale inventories of petroleum and petroleum products were down by 6.2%...again, excluding inventories of petroleum and petroleum products, wholesale non-durable inventories in December were 0.5% greater than those in November...in part due to the distortion caused by lower petroleum prices, the closely watched inventory to sales ratio of merchant wholesalers rose to 1.22, up from 1.21 in November and up from the inventory to sales ratio of 1.16 in December of last year, as the inventory to sales ratio for petroleum and petroleum products, which is about 10% of wholesale sales but just 3% of wholesale inventories, rose from 0.31 to 0.34...

then on Thursday, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for December, which is  covered in the media as the "business inventories" report, and which estimated the combined value of seasonally adjusted distributive trade sales and manufacturers' shipments was at $1,331.2 billion in December, down 0.9% (±0.9%)* from November, while 0.9% (±0.4%) above the total monthly sales level of December of last year...manufacturers sales were estimated at $488,245 million, down 1.1%, while retailer's sales were estimated down 1.1% at $393,208 million and, as previously noted, sales of merchant wholesalers were down 0.4% and accounted for $454,587 million of the overall total....once again, most of the drop in business sales was associated with lower oil prices; even manufacturer's sales are more than 10% refinery sales, as we mentioned when we discussed December factory orders..

meanwhile, total manufacturer's and trade inventories were estimated to have increased 0.1 percent (±0.2%)* from November to a seasonally adjusted $1,764.4 billion at the end of December, which was up 3.9 percent (±0.5%) from December a year earlier...seasonally adjusted inventories of manufacturers were estimated to be valued 0.3% lower at $634,786 million, inventories of retailers were estimated to be valued at $562,881 million, a 0.1% increase, and inventories of wholesalers were estimated to be valued at $547,648 million at the end of December, up 0.1% from November...the month end total business inventories to total sales ratio, the metric which is widely watched to determine if inventories are becoming excessive, was at 1.33, up from 1.31 November and up from 1.29 December a year ago, again likely a distortion caused by record high petroleum inventories... 

both sales and inventories from this report were included in 4th quarter GDP, but December inventories were only estimated when the GDP report was released two weeks ago, when the BEA assumed that wholesale and retail inventories had increased and that nondurable manufacturing inventories had decreased for the month...in reporting on this report, most analysts assumed that this report indicated that the BEA overestimated inventories and hence marked down their estimates of GDP...for instance, economists polled by Reuters estimated that GDP could be lowered by at least 0.5%; Wells Fargo economists concurred; Macroadvisers estimated a total hit of 0.6% to GDP from a combination of December reports....however, it's likely that few of these estimates have adjusted inventories for inflation, a necessary prerequisite to determine their impact on GDP...we have little to go on; we can't tell from looking at the GDP report (pdf), as it only gives us the quarterly change in inventories, and that at an annual rate to boot, and it doesn't give a deflator for inventories...so we'll try to figure it out by walking through the steps the BEA itself would likely take in arriving at that result..

we'll start with wholesale inventories, which we have already noted were up just 0.1%, largely due to a 6.2% drop in petroleum inventories...most of the inventories covered by this report would be deflated by the BEA using the producer price index for December, which showed a 1.2% drop in prices for finished goods, along with a 1.7% drop in prices for intermediate goods and a 5.0% drop in prices for raw goods...however, most of that was as the result of lower energy prices, which fell 6.6% at the finished energy goods level...that alone would indicate a real increase in energy goods inventories, which was borne out anecdotally by news articles in December indicating seasonally record stocks....looking at foods, we see wholesale prices were down 0.4% for finished foods, down 0.8% for intermediate foods, and down 6.9% for raw foodstuffs....the wholesale inventories report indicates that inventories of wholesale groceries rose by 1.1%, while inventories of farm products rose by 0.8%; once adjusted for prices, BEA should find that real inventories of wholesale groceries rose by 1.5%, while real inventories of farm products may have risen by as much as 5.8%, and it's those real inventories that would be applied to GDP...meanwhile, wholesale prices less food and energy were up 0.2% for finished goods, down 0.6% for intermediate goods, and down 0.5% for raw goods...to determine real inventories for each of those goods, the BEA would use the corresponding itemized tables in the producer price report...prices for finished wholesale goods, for instance, are listed in table 4 under "Final demand goods less foods and energy"....by way of example, wholesale inventories of computer equipment were up 2.6% in December, while their prices were down 0.7%; that would suggest that an increase of 3.3% in real inventories of wholesale computers for December would be applied to 4th quarter GDP...

similarly, inventories of goods at retail would be deflated with the various components of the consumer price index for December, which showed a drop of 0.4%...again, energy prices were a major factor, but even excluding food and energy, prices for goods less food and energy were down 0.3%...but we dont have to pick through the CPI report to get the deflator for December, because the BEA has already computed it in their income and outlays report for December, which we looked at last week...the PCE price index was down 0.2%, already implying an increased adjustment to GDP...but to adjust retail inventories, we'd have to use the PCE price index for goods, which we find was down 1.0% in December, as is shown in Table 9 of the pdf version of that report...applying that to retail inventories, which are not broken down by category, we'd estimate that real retail inventories rose 1.1% in December, in keeping with or even more than the BEA estimate...

we would find the details on factory inventories in the the Census Bureau's Full Report on Manufacturers’ Shipments, Inventories, & Orders for Decmeber (pdf), but again they would be deflated with the appropriate price index for the types of inventories the various manufactures are accumulating...many of these price indexes would again be found in the producer prices report....inventories of non-durables, which were estimated in the advance GDP report, were down 1.5% in December, but again much of that was due to an 8.8% drop in refinery inventories, which make up 15% of non-durable factory inventories…other factory inventories which fell in December included textiles, rubber products, pesticides and industrial chemicals, all of which use petroleum as an input...indeed, checking the producer price index, we find prices for industrial chemicals were down 4.4% in December, indicating the 0.6% drop in inventories of chemicals wasn't a real drop at all, but actually a real increase of around 3.8%..other components of factory inventories are less clear; to figure inventories of capital goods, for instance, we might have to estimate using the GDP deflator for equipment, which showed an annualized price increase of 1.1% in the 4th quarter….that would mean about a 0.1% per month reduction from the 0.3% nominal increase to arrive at the change in real inventories of December capital goods...

all in all, it appears that the BEA estimates for 4th quarter GDP inventories were pretty close to on the mark, and that the estimates of economic forecasters that reduced inventories will cause a major writedown of  4th quarter GDP will prove to be unfounded...of course imports, which we discussed last week, is another matter...lower prices for those will just make their real subtraction from GDP that much larger...

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

Sunday, February 8, 2015

January jobs report; December’s income and outlays, trade, factory orders, construction spending, consumer credit and Mortgage Monitor…

as is usual for the first week of the month, Friday saw the release of the Employment Situation for January; there were also two other important reports; the December release on Personal Income and Spending from the Bureau of Economic Analysis and the December Report on our International Trade from the Census Bureau...in addition, the Census released the Full Report on Manufacturers' Shipments, Inventories and Orders for December and the December report on Construction Spending, both of which could also impact 4th quarter GDP revisions...then on Friday, the Fed released its G19 on Consumer Credit for December, which indicated that revolving credit increased at a 7.9% annual rate in December, the largest increase since March, while non-revolving credit grew at a 4.5% rate, the slowest growth since February 2012...

the week also saw the privately issued December Mortgage Monitor from Black Knight Financial Services and the Ward's Automotive report on Light vehicle sales for January, as well as the two widely watched diffusion indexes from the Institute for Supply Management (ISM), the January Manufacturing Report On Business, and the January Non-Manufacturing Report On Business...although the simplistic index values from the latter two reports could be called into question, both reports are readable and include anecdotal comments from purchasing managers from the 34 business types who participate in these surveys nationally...

Employers Add Over a Million Jobs in 3 Months; January Labor Force Grows by Over a Million 

for the most part, the Employment Situation Summary for January from the BLS was another positive report, although some econobloggers complained that average wages have not been rising fast enough...the seasonally adjusted establishment survey indicated employers added 257,000 jobs in January, and revisions of the two previous reports added 147,000 more jobs than previous estimated, with December now showing an addition of 329,00 jobs and November adding 423,000, which means the economy added more than a million jobs over three months for the fist time since 1997...meanwhile, the unemployment rate, which is sourced from the household survey, rose from 5.6% to 5.7% for the right reason; those counted in the labor force rose by more than a million, to 157,180,000, as self reported employment rose by 759,000 and unemployment rose by 291,000, as 354,000 more of those who weren't counted in December started to look for work in January, and the labor force participation rate rose from 62.7% to 62.9%...

as we pointed out last month, the BLS press release itself is very readable, so you can get additional details on the employment reports directly from there...remember that there are links to roughly 30 detailed tables at the end of that release, with the A tables detailing household survey data and the B tables on the establishment survey...otherwise, the employment report is the most thoroughly covered of the monthly reports, with Dean Baker providing excellent coverage of the establishment survey here: Economy Adds 257,000 Jobs in January and Mish providing the relevant numbers from the household survey here: Diving Into the Payroll Report: Wages Rebound, Revisions, Huge Jump in Labor Force...for graphics, you can check out January’s Jobs Report in 10 Charts from the Wall Street Journal, and Bill McBride's two posts: January Employment Report: 257,000 Jobs, 5.7% Unemployment Rate and Employment Report Comments and Graphs....

since it's January, when prior employment data is rebenchmarked to March of the previous year, altering the rest of the year's data, we're going to add one graph here from another WSJ post that shows the effect of these revisions on 2014 payroll data...in the graphic below, the blue bars indicate jobs added in each month of last year as originally reported, and the red bars indicate the benchmark revisions as of this report…the net effect of the revisions back to January 2010 was to add an additional 91,000 jobs to March’s originally reported & revised jobs total…

January 2015 benchmark revsisions

Personal Income Rises 0.3% in December; Spending Falls 0.3%

other than the employment reports and the GDP report itself, the monthly report on Personal Income and Outlays from the Bureau of Economic Analysis is probably the most important release of the month, as it gives us important personal income data, the monthly data on our personal consumption expenditures (PCE), the major component of GDP, and the PCE price index, the inflation gauge the Fed targets...it is also probably the least understood and most misreported of the monthly economic reports, which is largely due to the nearly inscrutable manner in which the press release from the BEA reports on it...to start with, all the dollar amounts referenced by this report are seasonally adjusted and at an annual rate; so the nominal monthly dollar changes, which are not reported, are actually on the order of one twelfth of the reported amounts... however, the percentage changes are expressed as a month over month change and are confusingly used within the report as if they refer to the annualized amounts, making for a difficult report to unpack and report on correctly...

for example, this month's report opens by telling us "Personal income increased $41.3 billion, or 0.3 percent, and disposable personal income (DPI) increased $35.8 billion, or 0.3 percent, in December" which most would read to indicate that incomes rose $41.3 billion for the month....however, that $41.3 billion is seasonally adjusted and at an annual rate, which means that if the increase in December personal incomes were extrapolated over an entire year, those 12 months would add up to $41.3 billion... what that statement actually means is that personal incomes rose from an annual rate of $14,930.9 billion in November to an annual rate of $14,972.2 billion in December, and no where in this report will we learn how much December incomes rose before being seasonally adjusted and turned into an annual number...the same is true of disposable personal income, which is income after taxes, and all the components of the income increase that are reported here...thus, when the press release tells us: Wages and salaries increased $6.9 billion in December, that's not how much wages and salaries increased in December, that's how much wages and salaries would increase over a year if the rate of increase in December wages were extrapolated over an entire year...also note that of the "personal income" reported here, wages and salaries works out to $7,558.2 billion annualized, barely over half the annualized $14,972.2 billion personal income reported...the other major sources of personal income are transfer payments (ie social security), income on assets (dividends and interest), proprietors’ income, and rental income paid to individuals....the detailed breakdown for all of that is in the pdf for this report, linked on the sidebar of the press release... http://www.bea.gov/newsreleases/national/pi/2015/pdf/pi1214.pdf

also, personal consumption expenditures (PCE) are reported in the same manner, such that they fell at an annual rate of $40.0 billion, or 0.3%, from the annual rate of November...this was the largest seasonally adjusted drop in consumer spending since 2009, but the caveat that must be applied to that is that prices, mostly of energy related goods, were falling in December as well, so a large part of the pullback in spending was just due to lower prices...like the GDP report, the monthly personal consumption expenditures are adjusted with the price index for PCE, which is a chained type price index based on 2009 prices equal to 100...in table 9 of the pdf for this report we see that that price index fell to 108.746 in December, from 109.000 in November, a drop of 0.023%, which the BEA rounds to 0.2% when reporting it...hence, real personal consumption expenditures only fell 0.10%, which the BEA rounds to a drop of 0.1%....using the same PCE price index, disposable personal income was adjusted to show that real disposable personal income, or the purchasing power of disposable income, rose by 0.5% in December after an increase of 0.4% November...

with disposable personal income up and personal consumption expenditures down, it only goes to reason that personal savings would have increased for the month...to arrive at the figures for that, the BEA takes total personal outlays, which is the sum of PCE, personal interest payments, and personal current transfer payments, and subtracts that from disposable personal income, to show personal savings at a $643.2 billion annual rate in December, up from the $568.2 billion that we would have saved in November had November's savings been extrapolated for a year...this left the personal savings rate, or personal savings as a percentage of disposable personal income, at 4.9% in December, up from the savings rate of 4.3% in November..

Trade Deficit Jumps 17% in December Despite Lower Oil Prices

the December report on our International Trade in Goods and Services from the Commerce Department revealed a much larger trade deficit than most expected, as it increased by 17% to $46.6 billion in December from a revised $39.8 billion in November, against economists expectations that it would narrow to $37.9 billion from the $39.0 billion originally reported...and it's actually worse than that, because the price of crude oil fell by 18.6% from November to December, so when the import deficit is adjusted for prices to arrive at real import quantities, it will show correspondingly higher imports to be subtracted from 4th GDP...

our exports fell $1.5 billion in December to $194.9 billion on a decrease of $2.5 billion to $134.3 billion in our exports of goods and a $1.0 billion increase to $60.6 billion in our exports of services, while our imports rose $5.3 billion to $241.4 billion on a $4.4 billion increase to $200.3 billion in our imports of goods, while our imports of services rose $0.9 billion to $41.2 billion... the September trade deficit was revised up to $39.8 billion from the previously reported $39.0 billion, implying a downward revision of similar magnitude to 4th quarter GDP for November...furthermore, considering that import prices were down 2.5% in December, the increased dollar value of our imports means we were buying even more goods on an inflation adjusted basis, and hence those imports will subtract even more than otherwise from 4th quarter GDP...

the BEA press release provides a good overview, but to get the details on trade we have to view the full release and tables (55pp pdf) which is linked to on the sidebar...there, in exhibit 7, we see that the major reasons for the December drop in our exports were a $1,244 million drop in our exports of non-monetary gold, and a $499 million decrease in our exports of soybeans...but while our exports of soybeans are up $2,535 million to $25,522 for the year, our exports of gold fell by $11,759 million to $22,454 million for the year and were the sole reason that our 2014 exports of industrial supplies and materials fell $2,479 million to $506,835 million...and although there were several categories of imports that contributed to the the $5.3 billion December increase, most notable were the dollar-based increases of oil and fuels, as oil imports rose by $1088 million to $18,278 million, fuel oil imports rose $296 million to $2,759 million, and imports of other petroleum products rose by $464 million to $3,699 million...meanwhile our crude oil imports increased from 6.296m barrels a day in November to 7.980m barrels a day in December, a sizable jump considering US oil production hit another record in the same month..the only other category of imports that saw an increase of a similar magnitude was our imports of motor vehicles, engines and parts which rose $938 million to $28,451 million..

Construction Spending increases by 0.4% December While Factory Orders Fall 3.4%

the Census report on Construction Spending for December (pdf) estimated that our seasonally adjusted construction spending for the month would work out to $982.1 billion annually if extrapolated over an entire year, which was 0.4 percent (±1.3%)* above the revised November annual rate and 2.2 percent (±1.6%) above above last December's adjusted and annualized level of construction spending....this was a bit below expectations, and may result in a smallish downward revision to 4th quarter GDP if prices aren't a factor...private construction rose 0.1%, with residential construction up 0.3 percent (±1.3%)* to $349.6 billion annually, while nonresidential construction fell 0.1%  (±1.0%)* to $349.0 billion, as it was impacted by a 1.0% drop in power related construction, which includes gas and oil investment...meanwhile, public consruction grewby 1.1 percent (±2.1%)* to $283.5 billion annually..

the Census Bureau's Full Report on Manufacturers’ Shipments, Inventories, & Orders for October (pdf), commonly known as the factory orders report, indicated that the widely watched new orders for manufactured goods fell by $16.4 billion or 3.4% to $471.5 billion, following a revised 1.7% decrease in November, which was a larger drop than anyone expected...we had known last week that new orders for durables were reported down 3.4%; this report revised that to a 3.3% drop, while it also reported orders for non-durables were down by 3.4%...no one seemed to notice that new orders at refineries, which accounts for more than 20% of non-durable goods, was a major factor in that drop, as it was in the other sections of this report...shipments, for instance, decreased $5.3 billion or 1.1 percent to $488.2 billion, largely on a 15.7% drop in shipments from refineries, which was undoubtedly due to lower prices for refined goods...but since this report does not include prices, we can't tell how much of a factor that was..same with inventories, which were down 0.2% for the first time in 19 months, and to a lesser extent, unfilled orders, which fell $9.4 billion or 0.8 percent to $1,166.9 billion, their first drop in 11 months...

Mortgage Delinquencies Fall 7.2% in December While New Foreclosures Rise 21.0%

the Mortgage Monitor for December (pdf) from Black Knight Financial Services (BKFS, formerly LPS Data & Analytics) reported that there were 820,177 home mortgages, or 1.61% of all mortgages outstanding, remaining in the foreclosure process at the end of December, which was down from 892,796, or 1.63% of all active loans that were in foreclosure at the end of November, and down from 2.48% of all mortgages that were in foreclosure in December of last year...these are homeowners who had a foreclosure notice served but whose homes had not yet been seized, and December's "foreclosure inventory" was the lowest percentage of homes in foreclosure since early 2008... new foreclosure starts rose to 89,357 in December from 73,862 in November, the highest since September, but still below the 104,759 foreclosures that were started in December of last year...

in addition to homes in foreclosure, October data showed that 2,876,751 mortgage loans, or 5.54% of all mortgages, were at least one mortgage payment overdue but not in foreclosure, down from 6.04% of homeowners with a mortgage who were more than 30 days behind in November, and down from the delinquency rate of 6.47% a year earlier...of those who were delinquent in December, 1,132,301 home owners were considered seriously delinquent, which means they were more than 90 days behind on mortgage payments, but still not in foreclosure at the end of the month...thus, a total of 7.15% of homeowners with a mortgage were either late in paying or in foreclosure at the end of December, and 3.83% of them were in serious trouble, ie, either "seriously delinquent" or already in foreclosure at month end...

included below is the Mortgage Monitor table showing the monthly count of active home mortgage loans and their delinquency status, which comes from page 12 of the pdf....the columns here show the total active mortgage loan count nationally for each month given, number of mortgages that were delinquent by 30 days, number of mortgages that were delinquent by 60 days, the number of mortgages that were delinquent by more than 90 days but not yet in foreclosure, the monthly count of those mortgages that are in the foreclosure process (FC), the total non-current mortgages, including those that just missed one or two payments, and then the number of foreclosure starts for each month shown going back to January 2008….in the last two columns, we see the average length of time that those who have been more than 90 days delinquent have remained in their homes without foreclosure, and then the average number of days those in foreclosure have been stuck in that process because of the lengthy foreclosure pipelines… notice that the average length of delinquency for those who have been more than 90 days delinquent without foreclosure has begun to increase again and is now at 515 days, while the average time for those who’ve been in foreclosure without a resolution is off its record high but still nearly three years at 1010 days… 

December 2014 LPS FC & delinquent loan count table

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

Sunday, February 1, 2015

4th quarter GDP, December durable goods, new home sales, and regional employment, November Case-Shiller

as is par for the course for the last week of the month, the past week saw a full schedule of economic releases, capped off by the Friday release of the first estimate of 4th quarter GDP from the Bureau of Economic Analysis ...other releases with large followings in the econosphere included the S&P/Case-Shiller House Price Indexes for November, the report on December's new home sales and the the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for December, both from the Census Bureau and all released on Tuesday, as was the Regional and State Employment and Unemployment report for December from the Bureau of Labor Statistics...we also saw the release of the diffusion indexes from two regional Fed manufacturing surveys: the Dallas Fed January Manufacturing Survey saw their general business activity index and the company outlook index both drop below zero for the first time in 20 months, undoubtedly reflecting a pull back in the oil patch brought on by lower prices, while the Richmond Fed January Manufacturing Activity Survey, which covers Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia saw little change in their manufacturing composite at 6, indicating an ongoing slow expansion...in another manufacturing diffusion index, the Chicago Purchasing Manager's Index (PMI) for January from the Chicago ISM was up 0.6 to 59.4, indicating that a significant plurality of Midwest purchasing execs still saw expansion in the various facets of their business...

Real GDP Grows at 2.6 Rate in 4th Quarter as Prices Fall

Friday’s report on 4th quarter GDP was particularly interesting in that the inflation adjustments for large components of our national output turned negative, which meant that when the inflation adjustment was applied, what appeared to be lower or just a modest increases in spending actually represented larger increases in goods and services procured, and hence indicated a larger contribution to our output than the nominal dollar amounts would lead one to believe; the Advance Estimate of 4th Quarter GDP from the Bureau of Economic Analysis indicated that the real output of goods and services produced in the US grew at a 2.6% annual rate over the output of the 3rd quarter of this year, when real output grew at a 5.0% real rate...4th quarter GDP growth in current dollars was just at a 2.5% rate, the first time current dollar growth fell below real growth since Q2  of 2009, and only the second time that's happened since 1950; that contrasts with current dollar growth at a 6.3% rate in the third quarter and at a 6.7% rate in the 2nd quarter.....

fourth quarter growth was largely driven by an increase in real personal consumption expenditures and increased inventories, while a decrease in fixed investment, lower defense outlays and a large increase in imports were negatives...for the entire year, our real GDP was 2.4% higher than 2013, when the real economy grew by 2.2%...remember, the change in GDP being reported here is not a measure of the change in the dollar value of our GDP but a measure of the change in our output....to arrive at that, the BEA adjusts the current dollar value of our output for inflation using prices chained from 2009, and calculates all percentage changes in this report from those nonsense numbers....the inflation adjustment used in the fourth quarter, aka the "GDP deflator" was statistically zero, ie, it would suggest annual inflation at a 0.0% rate, down from the 1.3% deflator applied in the 3rd quarter...

as is always the case with an advance estimate, the BEA cautions that the source data is incomplete and also subject to revisions, which have now averaged +/-0.6% in either direction for nominal GDP, and +/- 0.6% for real (inflation adjusted) GDP before the third estimate is released, which will be two months from now...also note that December trade and inventory data have yet to be reported, and that BEA assumed an increase in imports and a decrease in exports, that wholesale and retail inventories had increased and that nondurable manufacturing inventories had decreased in December...while we cover the details below, remember all quarter over quarter percentage changes reported here are given at an annual rate, which means that they're expressed as a change a bit over 4 times of that what actually occurred over the 3 month period...

the press release for this report, from which most news stories and even blog reports are written, reports annual changes as quarterly without noting that they are, and only uses the prefix "real" to indicate the inflation adjustment, so some of the reporting on this release misses that altogether...although this persists throughout the report, we'll quote the short paragraph on personal consumption expenditure to illustrate & explain that:

Real personal consumption expenditures increased 4.3 percent in the fourth quarter, compared with an increase of 3.2 percent in the third. Durable goods increased 7.4 percent, compared with an increase of 9.2 percent. Nondurable goods increased 4.4 percent, compared with an increase of 2.5 percent. Services increased 3.7 percent, compared with an increase of 2.5 percent.

looking at the way the above is written, you'd think it was written about consumer spending, but it really isn't; the BEA is giving us the annualized change in units of goods and services used by consumers over the 4th quarter...the key word is "real"; that means it's spending that has been adjusted for inflation; for example, if gasoline prices rise 10% in a given quarter, and dollar value spending for gasoline rises 11%, the BEA will report that as a 1% increase in real personal consumption expenditures for gasoline, meaning the number of gallons of gasoline consumed (and hence produced by the economy) rose by 1% in the quarter...applying that to what we've quoted above in red, real personal consumption expenditures for durable goods rose at a 7.4% annual rate because actual "spending" for durable goods rose by 0.89% in the quarter, from $1,320.2 billion to $1,332.0 billion, which is an annual growth rate of 3.6%, to which a negative deflator for durable goods of 3.6% annually was applied...driving that growth in durable goods output was growth in consumption of recreational vehicles and equipment at a 9.8% rate and 6.4% annualized growth in consumption of motor vehicles and parts...

similarly, although real personal consumption expenditures for non-durable goods rose at a 4.4% rate, the actual dollars spent on non-durable goods declined from $2,691.3 billion to $2,677.4 billion; however, prices for non-durable goods fell at a 6.2% annual rate, meaning more actual goods were consumed, hence increasing GDP..gasoline was a major factor in this; although gasoline spending fell from $406.3 billion to $369.8 billion, real consumption of gasoline (in gallons) was actually up at a 12.3% rate...

meanwhile, real growth in consumption of services followed the pattern we'd normally expect, wherein the inflation adjustment deflated the amount actual spent...in actual dollars, spending for services rose from $7,990.4 billion to $8,102.9, an annualized increase at a 5.7% rate..but prices for service rose at a 2.0% rate, reducing the actual growth in services delivered to 3.7%...factors contributing to that growth were an 4.5% annualized increase in the amount of health care services delivered and an increase in financial and insurance services at a 6.4% annual rate..

the other components of GDP are computed in the same manner; the actual increase in spending in the quarter is adjusted with an inflation factor for that component, giving the real units of goods or services produced in the quarter, and then it's converted to an annualized figure by compounding it 4 times...thus, real gross private domestic investment, which had grown at a 7.2% annual rate in the 3rd quarter, grew at a 7.4% annual rate in the 4th quarter; however, most of the investment growth in the 4th quarter came from inventories, as real growth in fixed investment slowed to 2.3% annualized...of that, real non-residential fixed investment grew at a 1.9% rate as all of its components slowed and investment in equipment decreased at a 1.9% rate, in contrast to 11.0% growth in equipment investment in the 3rd quarter...investment in nonresidential structures slowed from growth at a 4.8% in the 3rd quarter to a 2.6% growth rate, while investment in intellectual property increased at a 7.1% rate,  down from the increase at a 8.8% rate in the 3rd quarter...residential investment, however, grew at a 4.1% rate in the 4th quarter, a bit better than the 3.2% growth it saw in the 3rd quarter...

meanwhile, real private inventories grew by an inflation adjusted $113.1 billion in the 4th quarter after they grew by $82.2 billion in the 3rd quarter, and hence the $30.9 billion greater inventory growth added 0.82% to the 4th quarter's growth rate, in contrast to the $2.6 billion decrease in inventory growth in the 3rd quarter that subtracted 0.03% from that quarter's GDP...since greater inventories indicate that more of the goods produced goods during the quarter are still sitting on the shelf, their increase by $30.9 billion means real final sales of GDP were lower by that much, hence increasing at a 1.8% annual rate in the 4th quarter, compared to the real final sales increase at a 5.0% rate in the 3rd quarter, when the change in inventories was nearly unchanged…

the trade figures were also boosted by large inflation adjustments, as the price of goods exports fell at 9.4% annual rate while the price of imported goods fell at an 8.8% annual rate...the high percentage of commodities was the major factor in this, as we still import a lot of crude oil & raw materials while we export agricultural commodities and refined fuels, all of which were priced lower...so even though exports fell from $2,366.5 billion to $2,341 in dollars, real exports are recorded growing at a 2.8% rate...similarly, real imports, which had fallen by 0.9% in the 3rd quarter, grew by 8.9% in the 4th quarter, aided in part by lower prices....remember that exports add to gross domestic product because they represent that part of our production that was not consumed or added to investment in our country, while imports subtract from GDP because they represent either consumption or investment that was not produced here, and that it's the quarter over quarter change in each that affects the quarterly change in GDP.... so the 2.8% increase in our real exports of goods and services resulted in an addition of 0.37% to the fourth quarter's growth rate, while the 8.9% increase in our real imports of goods and services subtracted 1.39% from fourth quarter growth, resulting in a 1.02% subtraction from net trade in the quarter, a sharp contrast from the 0.78% that the decrease in our trade deficit added to GDP in the 3rd quarter...

finally, real consumption and investment by governments decreased at a 2.2% annual rate, as federal government consumption and investment fell at a 7.5% rate over the 4th quarter, while state and local consumption and investment grew at a 1.3% rate....inflation adjusted federal spending for defense fell at a 12.5% rate and subtracted 0.58% from GDP growth, while real non-defense federal consumption and investment grew at a 1.7% rate and added 0.04% to GDP...note that federal government outlays for social insurance are not included in this GDP component; rather, they are included within personal consumption expenditures only when such funds are spent on goods or services, indicating an increase in the output of goods or services...meanwhile, state and local government investment and consumption expenditures, which grew at a 1.3% annual rate, added 0.14% to the quarter's growth rate, as state and local consumption spending rose at a 1.1% rate while state and local investment grew at a 2.2% rate...

in our FRED bar graph below, each color coded bar shows the change, in billions of chained 2009 dollars in one of the major components of GDP over each quarter since the beginning of 2012...in each quarterly grouping of seven bars on this graph below, the quarterly changes in real personal consumption expenditures are shown in blue, the quarterly changes in real fixed private investment, including structures, equipment and intangibles, are shown in red, the quarterly change in real private inventories is shown in yellow, the real change in exports are shown in purple, while the change in real imports is shown in green ..then the change in state and local government spending and  investment is shown in pink, while the change in Federal government spending and investment is shown in grey...those components of GDP that contracted in a given quarter are shown below the zero line and subtract from GDP, those that are above the line grew during that quarter and added to GDP; the exception to that is imports in green, which subtract from GDP, and which are shown on this chart as a negative, so that when imports shrink, they will appear above the line as an addition to GDP, and when they increase, as they have in the recent quarter, they'll appear below the zero line as a subtraction...it's clear from the graph that even though fixed private investment has been an ongoing contributor to the recovery, it's been the increase in real personal consumption expenditures that have been driving growth..

4th qtr 2014 advance GDP

NB: all the data that we used in reporting the above comes from the pdf for the 1st estimate of 4th quarter GDP, which is linked to on the sidebar of the BEA press release, which also offer links to just the tables on Excel and other technical notes...specifically, we refer to table 1, which shows the real percentage change in each of the GDP components annually and quarterly since 2012, table 2, which shows the contribution of each of the components to the GDP figure, table 3, which shows both the current dollar value and inflation adjusted value of each of the GDP components, and table 4, which shows the change in the price indexes for each of the components, and which is used to convert current dollar figures into units of output...

New Orders for Durable Goods Drop 3.4% in December; Order Backlog Falls First Time in 10 Months

the Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders saw new orders for durable goods fall 3.4% in December, against market expectations of a 0.5% increase; even worse, new durable-goods orders for November were revised to show a 2.1% drop, rather than the previously reported 0.9% decrease...the weakness was widely attributed to a 55% drop in new orders for commercial aircraft, but even excluding transportation orders, new orders were still down 0.8% in December and a revised 1.3% in November...however, new orders for consumer items remained strong, with electrical equipment and appliance orders increasing 1.2% and new orders for motor vehicles and parts up 2.7%; the weakness was in the investment categories, where new orders for capital goods less aircraft were off 0.6%, led by a 3.7% drop in new orders for machinery...so it appears what we’re seeing there is the effect of the pullback in the oil patch; as none of the oil companies are ordering any new equipment…

the two metrics that contributed to 4th quarter GDP were both strong; shipments of durable goods were up 1.1%, anchored by a 3.1% increase in shipments of motor vehicles and parts; again, shipments of capital goods were weak, slipping 0.2%, with a 1.5% drop in shipments of machinery accounting for most of that...inventories of durable goods, up 20 out of the last 21 months, rose 0.5% again, the same increase as in October and November...but unfilled orders for durable goods, the metric we watch, were down for the first time since last January, falling 0.8% on a 1.2% drop in the order backlog for commercial aircraft, which at over half of the order book nationally has a oversized influence on this metric...

for the entire year, all the metrics covered by this report remain solidly positive; orders received for durable goods in 2014 were 6.2% higher than orders received in 2013; shipments of durable goods were 5.0% greater, while total inventories grew by 5.9%....and the value of unfilled orders for durable goods outstanding at year end stood at $1,168,681, 10.2% higher than at the end of 2013...for additional details, Robert Oak at the Economic Populist covers this report with 9 FRED graphs..

Case Shiller 20 City Index Up 4.3% YoY; National Index Up 4.7%

the Case-Shiller house price indexes for November were released Tuesday and showed an unsurprising drop of 0.2% in home prices nationally and a 0.1% drop in the 20 city index from the October report, while the year over year indexes indicated a 4.7% increase in home prices nationally and a 4.3% increase for the 20 cities; after seasonal adjustments, the 10 and 20 city indices were both up 0.7% from October to November while the national index showed a 0.8% increase for the month...the full pdf of the release is here and it includes full unadjusted and adjusted tables for all 20 cities and the 3 indexes, as well as graphs and commentary...the best coverage of Case-Shiller on the web was from Bill McBride, with the following two posts, which include several graphs: Case-Shiller: National House Price Index increased 4.7% year-over-year in November, followed by his analysis in House Prices: Better Seasonal Adjustment; Real Prices and Price-to-Rent Ratio in November….for a quick summary of the 20 city price index changes, the WSJ has an interactive table included here: A Look at Case-Shiller by Metro Area ...

2014 New Home Sales Same As 2013

the report on New Residential Sales for December estimated that new single family homes were sold at a seasonally adjusted annual rate of 481,000 in December, which was 11.6 percent (±16.5%)* above the revised November rate of 431,000 and is 8.8 percent (±17.9%)* above the estimate of of last year, as previously reported sales were revised downward for the 7th month in a row...as you all know, the asterisks after the reported figures indicate that based on their small sampling, Census could not be certain whether December's new home sales rose or fell from those of November or even from those of a year ago, and the figures in parenthesis represent the 90% confidence range for reported data in this report, which has the largest margin of error of any census construction series....November's annualized sales were revised down from the previously reported 438,000; the unadjusted data from Census field reps estimated that 34,000 homes sold in December, up from 30,000 in November; Census estimated 435,000 new homes were sold in 2014, up from 429,000 in 2013...for more details, i'd recommend Robert Oak's coverage with 6 FRED graphs, one of the few bloggers who even recognizes the large margin of error and likelihood of major revisions of this report..

State and Regional Employment for December

the Regional and State Employment and Unemployment Summary for December simply expands on the national employment situation summary of three weeks ago by breaking down the state and regional details...the BLS table corresponding to household survey data, including the seasonally adjusted count of the unemployed and the unemployment rate for each state, is here..for a breakdown of payroll employment by job type for each state over the past 3 months, and the change in employment since last November, see the following two BLS tables accompanying this release: Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted and Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted ...this report was covered with graphs by Bill McBride here: BLS: Forty-two States had Unemployment Rate Decreases in December and by the Economic Policy Institute here: Most States End 2014 on the Right Path, Still With a Long Way to Go (with interactive graphics)

also note the increase of US children on food stamps:
January 2015 children on food stamps

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)