Schedule for Week of Oct 23, 2016

The key economic reports this week are the advance estimate of Q3 GDP and September New Home Sales.

Also the Case-Shiller House Price Index for August will be released.

For manufacturing, the October Richmond and Kansas City Fed manufacturing surveys will be released this week.

----- Monday, Oct 24th -----
8:30 AM ET: Chicago Fed National Activity Index for September. This is a composite index of other data.

----- Tuesday, Oct 25th -----
9:00 AM: FHFA House Price Index for August 2016. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.5% month-to-month increase for this index.

9:00 AM ET: S&P/Case-Shiller House Price Index for August. Although this is the August report, it is really a 3 month average of June, July and August prices.

This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the July 2016 report (the Composite 20 was started in January 2000).

The consensus is for a 5.1% year-over-year increase in the Comp 20 index for August. The Zillow forecast is for the National Index to increase 5.2% year-over-year in August.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for October.

----- Wednesday, Oct 26th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM ET: New Home Sales for September from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the August sales rate.

The consensus is for an decrease in sales to 600 thousand Seasonally Adjusted Annual Rate (SAAR) in September from 609 thousand in August.

----- Thursday, Oct 27th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 255 thousand initial claims, down from 260 thousand the previous week.  Note: I expect some further impact on claims due to Hurricane Matthew.

8:30 AM: Durable Goods Orders for September from the Census Bureau. The consensus is for a 0.2% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for September. The consensus is for a 1.0% increase in the index.

10:00 AM: the Q3 Housing Vacancies and Homeownership from the Census Bureau.

11:00 AM: Kansas City Fed Survey of Manufacturing Activity for October.

----- Friday, Oct 28th -----
8:30 AM ET: Gross Domestic Product, 3rd quarter 2016 (Advance estimate). The consensus is that real GDP increased 2.5% annualized in Q3.

10:00 AM: University of Michigan's Consumer sentiment index (final for October). The consensus is for a reading of 88.5, up from the preliminary reading 87.9.

from Calculated Risk http://ift.tt/2eDCc0G
via YQ Matrix

A Few Comments on September Existing Home Sales

Earlier: Existing Home Sales increased in September to 5.47 million SAAR

Inventory remains a key issue. Here is a repeat of two paragraphs I wrote about inventory a few months ago:

I expected some increase in inventory last year, but that didn't happened.  Inventory is still very low and falling year-over-year (down 6.8% year-over-year in September). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases.

Two of the key reasons inventory is low: 1) A large number of single family home and condos were converted to rental units. Last year, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors, and rents have increased substantially, and the investors are not selling (even though prices have increased too). Most of these rental conversions were at the lower end, and that is limiting the supply for first time buyers. 2) Baby boomers are aging in place (people tend to downsize when they are 75 or 80, in another 10 to 20 years for the boomers). Instead we are seeing a surge in home improvement spending, and this is also limiting supply.

Of course low inventory keeps potential move-up buyers from selling too.  If someone looks around for another home, and inventory is lean, they may decide to just stay and upgrade.

A key point: Some areas are seeing more inventory.   For example, there is more inventory in some coastal areas of California, in New York city and for high rise condos in Miami.

I'd consider any existing home sales rate in the 5 to 5.5 million range solid based on the normal historical turnover of the existing stock. As always, it is important to remember that new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker's commission. There is usually some additional spending with an existing home purchase - new furniture, etc - but overall the economic impact is small compared to a new home sale.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Click on graph for larger image.

Sales NSA in September (red column) were the highest for September since 2006 (NSA).

Note that sales NSA are in the slower Fall period, and will really slow seasonally in January and February.

from Calculated Risk http://ift.tt/2emKpIQ
via YQ Matrix

Fed's Beige Book: "Most Districts indicated a modest or moderate pace of expansion"

Fed's Beige Book "Prepared at the Federal Reserve Bank of Dallas based on information collected on or before October 7, 2016. "

Reports from the twelve Federal Reserve Districts suggest national economic activity continued to expand during the reporting period from late August to early October. Most Districts indicated a modest or moderate pace of expansion; however, the New York District reported no change in overall activity. Compared with the previous report, the pace of growth improved in the St. Louis, Kansas City, and Dallas Districts. Outlooks were mostly positive, with growth expected to continue at a slight to moderate pace in several Districts.

Labor market conditions remained tight, with modest employment and wage growth noted over the reporting period. Most Districts characterized input costs and/or output prices as fairly flat, but prices increased slightly on net.
emphasis added

And on real estate:

Residential real estate activity expanded in most Districts since the prior report, and contacts in a few Districts expressed optimism about future growth. Homes sales fell markedly in the Kansas City District, while slight to moderate gains were reported by most of the other Districts. Demand for lower-priced homes was solid in Districts that commented on it, while sales of higher-priced homes slowed in the New York, Chicago, and Dallas Districts, and in Alaska according to San Francisco's report. Home inventories were generally reported to be low or declining and were restraining sales growth according to the Boston, Philadelphia, and Minneapolis Districts. Home prices continued to rise at a modest pace across much of the country, which contacts in some Districts attributed to tight inventories and labor constraints. Growth in residential construction was generally flat to up during the reporting period, with particular strength noted in the San Francisco District. However, construction activity dipped slightly in the Richmond District partly due to lot shortages.

Reports on multifamily activity varied but were positive on net. Strength in the apartment market was noted by the Dallas District (excluding the Houston metro area), while activity was mixed in the New York District. Growth in multifamily construction was positive in the Boston and Atlanta Districts but was mixed in the Richmond District and slowed further according to New York's report.

Commercial real estate leasing activity generally improved, and outlooks were mostly optimistic, although contacts in a few Districts expressed concern about economic uncertainty surrounding the upcoming presidential elections. Commercial rents were flat to up, and vacancy rates were generally low and/or declined in reporting Districts, except in the Houston metro area where office vacancies increased further. Sales of commercial properties were characterized as robust in the Chicago, Minneapolis, and San Francisco Districts but softened in the greater Boston area. Commercial construction increased on net, with contacts in the Cleveland and Atlanta Districts reporting increased or high backlogs. Shortages of skilled labor remained a constraint on construction activity in some Districts, such as Cleveland and San Francisco.

Real estate is decent.

from Calculated Risk http://ift.tt/2ehG1MF
via YQ Matrix

FNC: Residential Property Values increased 5.7% year-over-year in August

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their August 2016 index data.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.5% from July to August (Composite 100 index, not seasonally adjusted). 

The 10 city MSA increased 0.6% (NSA), the 20-MSA RPI increased 0.5%, and the 30-MSA RPI also increased 0.5% in August. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The index is still down 9.6% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through August 2016. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the mid single digit range.

Note: The August Case-Shiller index will be released on Tuesday, October 27th.

from Calculated Risk http://ift.tt/2eNYLUl
via YQ Matrix

Key Measures Show Inflation close to 2% in September

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.1% annualized rate) in September. The 16% trimmed-mean Consumer Price Index also rose 0.2% (2.1% 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% (3.6% annualized rate) in September. The CPI less food and energy rose 0.1% (1.4% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for September here. Motor fuel was up 94% annualized in September!

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.5%, the trimmed-mean CPI rose 2.1%, and the CPI less food and energy also rose 2.2%. Core PCE is for August and increased 1.6% year-over-year.

On a monthly basis, median CPI was at 2.1% annualized, trimmed-mean CPI was at 2.1% annualized, and core CPI was at 1.4% annualized.

Using these measures, inflation has generally been moving up, and most of these measures are at or above the Fed's target (Core PCE is still below).

from Calculated Risk http://ift.tt/2er4fBr
via YQ Matrix

CPI increased 0.3% in September

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.5 percent before seasonal adjustment.

Increases in the shelter and gasoline indexes were the main causes of the rise in the all items index. The gasoline index rose 5.8 percent in September and accounted for more than half of the all items increase. The shelter index increased 0.4 percent, its largest increase since May.

The energy index increased 2.9 percent, its largest advance since April. Along with the gasoline index, other energy component indexes also rose. The index for food, in contrast, was unchanged for the third consecutive month, as the food at home index continued to decline.

The index for all items less food and energy rose 0.1 percent in September after a 0.3-percent increase in August. ... The index for all items less food and energy rose 2.2 percent for the 12 months ending September.
emphasis added

I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was at the consensus forecast of a 0.3% increase for CPI, and below the forecast of a 0.2% increase in core CPI.

from Calculated Risk http://ift.tt/2edRZW6
via YQ Matrix

Tuesday: CPI, Homebuilder Confidence

Along with CPI, the BLS will release CPI-W, the Cost-Of-Living Adjustment (COLA) for 2017, the contribution base, and the National Average Wage Index. I expect COLA to be slightly positive, and for a fairly significant increase in the contribution base.

Tuesday:
• At 8:30 AM ET, the Consumer Price Index for September from the BLS. The consensus is for 0.3% increase in CPI, and a 0.2% increase in core CPI.

• At 10:00 AM, the October NAHB homebuilder survey. The consensus is for a reading of  63, down from 65 in September.  Any number above 50 indicates that more builders view sales conditions as good than poor.

from Calculated Risk http://ift.tt/2ehwV3Q
via YQ Matrix

Lawler: Early Read on Existing Home Sales in September

From housing economist Tom Lawler:

Based on publicly-available state and local realtor/MLS reports from across the country released through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.55 million in September, up 4.1% from August’s preliminary pace and up 2.0% from last September’s seasonally-adjusted pace.

Local realtor/MLS data also suggest that existing home listings in aggregate declined slightly last month, and I project that the inventory of existing homes for sale as estimated by the NAR for the end of August will be 1.99 million, down by about 2.5% from August’s preliminary estimate and down 9.1% from last September. Finally, I project that the NAR’s estimate of the median single-family existing home sales price for September will be $236,700, up 6.0% from last September.

Some readers will probably remember that my forecast for existing home sales for August – SAAR of 5.49 million, was both above consensus and above the NAR’s preliminary estimate (SAAR of 5.33 million). I attributed my miss partly to a misread of likely seasonal factors, and partly to the fact that my “early sample” proved not to be a good reflection of the entire market. Few probably recall, however, that my forecast for last August’s existing home sales number was similarly too high, and I also attributed that miss to the same factor’s as this August’s mix. My projection for September’s EHS, which I posted on October 16, 2015 (SAAR of 5.56 million) was almost spot on (the NAR’s preliminary EHS estimate was 5.55 million).

Sometimes it’s a good idea to review your own history!

CR Note: The NAR is scheduled to release September existing home sales on Thursday, October 20th. The consensus is for 5.35 million SAAR in September.

from Calculated Risk http://ift.tt/2efDSOy
via YQ Matrix

Sunday Night Futures

Weekend:
• Schedule for Week of Oct 16, 2016

Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for October. The consensus is for a reading of 1.0, up from -2.0.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for September. The consensus is for a 0.2% increase in Industrial Production, and for Capacity Utilization to increase to 75.6%.

From CNBC: Pre-Market Data and Bloomberg futures: S&P futures and DOW futures are down slightly (fair value).

Oil prices were up over the last week with WTI futures at $50.04 per barrel and Brent at $51.74 per barrel.  A year ago, WTI was at $47, and Brent was at $49 - so oil prices are UP year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.23 per gallon (down about 5 cents per gallon from a year ago).

from Calculated Risk http://ift.tt/2eH3wPt
via YQ Matrix

Schedule for Week of Oct 16, 2016

The key economic reports this week are September housing starts, Existing Home Sales and Consumer Price Index (CPI).

For manufacturing, September industrial production, and the October New York and Philly Fed manufacturing surveys, will be released this week.

A key focus will be on the third Presidential debate on Wednesday, Oct 19th.

----- Monday, Oct 17th -----
8:30 AM ET: The New York Fed Empire State manufacturing survey for October. The consensus is for a reading of 1.0, up from -2.0.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for September.

This graph shows industrial production since 1967.

The consensus is for a 0.2% increase in Industrial Production, and for Capacity Utilization to increase to 75.6%.

----- Tuesday, Oct 18th -----
8:30 AM: The Consumer Price Index for September from the BLS. The consensus is for 0.3% increase in CPI, and a 0.2% increase in core CPI.

10:00 AM: The October NAHB homebuilder survey. The consensus is for a reading of  63, down from 65 in September.  Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Wednesday, Oct 19th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Housing Starts for September.

Total housing starts decreased to 1.142 million (SAAR) in August. Single family starts decreased to 722 thousand SAAR in August.

The consensus for 1.180 million, up from the August rate.

During the day: The AIA's Architecture Billings Index for September (a leading indicator for commercial real estate).

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

At 9:00 PM ET, the Third Presidential Debate, at University of Nevada, Las Vegas, Las Vegas, NV

----- Thursday, Oct 20th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 250 thousand initial claims, up from 246 thousand the previous week.  Note: I expect a larger increase in claims than the consensus due to Hurricane Matthew.

8:30 AM: the Philly Fed manufacturing survey for October. The consensus is for a reading of 7.0, up from 12.8.

10:00 AM: Existing Home Sales for September from the National Association of Realtors (NAR).

 The consensus is for 5.35 million SAAR, up from 5.33 million in August.

----- Friday, Oct 21st -----
10:00 AM: Regional and State Employment and Unemployment (Monthly) for September 2016

from Calculated Risk http://ift.tt/2e60eVw
via YQ Matrix

Retail Sales increased 0.6% in September

On a monthly basis, retail sales increased 0.6 percent from August to September (seasonally adjusted), and sales were up 2.7% from September 2015.

From the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $459.8 billion, an increase of 0.6 percent from the previous month, and 2.7 percent above September 2015. ... The July 2016 to August 2016 percent change was revised from down 0.3 percent to down 0.2 percent.

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 0.5% in September.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales ex-gasoline increased by 3.3% on a YoY basis.

The increase in September was at expectations and the previous two months were revised up; a solid report.

from Calculated Risk http://ift.tt/2e35vNq
via YQ Matrix

Friday: Retail Sales, PPI, Yellen

Friday:
• At 8:30 AM ET, The Producer Price Index for September from the BLS. The consensus is for a 0.2% increase in prices, and a 0.1% increase in core PPI.

• Also at 8:30 AM, Retail sales for September will be released.  The consensus is for 0.6% increase in retail sales in September.

• At 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for August.  The consensus is for a 0.1% increase in inventories.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for October). The consensus is for a reading of 92.0, up from 91.2 in August.

• At 1:30 PM, Speech by Fed Chair Janet Yellen, Macroeconomic Research After the Crisis, At the Federal Reserve Bank of Boston’s Annual Research Conference: The Elusive "Great" Recovery: Causes and Implications for Future Business Cycle Dynamics, Boston, Massachusetts

from Calculated Risk http://ift.tt/2dA2hha
via YQ Matrix

Merrill on September CPI

Here is an excerpt from Merrill Lynch research piece today on September CPI to be released next week:

Consumer prices likely rose by 0.3% mom in September, lifting the year-on-year rate to 1.5%. We see a healthy gain in energy prices (up 2.6% mom), although food prices were likely once again weak. Excluding food and energy, we see a mere 0.1% mom increase: the previous months’ gain looks outsized, particularly for medical care commodities prices and we could get some payback. In this scenario, the year-on-year rate for core CPI could slow slightly to 2.2%

This probably means that CPI-W will be positive year-over-year, and the Cost-of-Living-Adjustment (COLA) will be positive for next year (although small). But even with a small increase in COLA, the contribution base will increase significantly.

from Calculated Risk http://ift.tt/2dNIs7H
via YQ Matrix

Update: Framing Lumber Prices Up Year-over-year

Here is another update on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs.

The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).

Prices didn't increase as much early in 2014 (more supply, smaller "surge" in demand).

In 2015, even with the pickup in U.S. housing starts, prices were down year-over-year.  Note: Multifamily starts do not use as much lumber as single family starts, and there was a surge in multi-family starts.  This decline in 2015 was also probably related to weakness in China.

Prices in 2016 are now up year-over-year.

Click on graph for larger image in graph gallery.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through early October 2016 (via NAHB), and 2) CME framing futures.

Right now Random Lengths prices are up 20% from a year ago, and CME futures are up about 40% year-over-year.

from Calculated Risk http://ift.tt/2ecgiGi
via YQ Matrix

Off-Topic: Litmus Test Moments and the Debate

Important Note: I've been writing this blog for 12 years, and I've written about economic policies, but I've avoided politics - until this year.   On economics, I like to be able to link back to my posts about the housing bubble, that house prices might fall 40% or more in some areas, that the economy was bottoming in 2009, that house prices bottomed in early 2012, and on and on.   In the future, I expect I will link back to my posts about Mr. Trump - and show that I criticized him early, often, and in the harshest terms - and show that I was on the right side of history.

The presidential "debate" last night was disgusting. We heard every extreme conspiracy theory, and a "candidate" for President having to apologize for his sexual comments.

A few truths: Trump lies repeatedly, he knows nothing about economics, and he is a disgusting person (his comments were not locker room comments). And his threat to jail his political opponent will be discussed and criticized for centuries.

Back in May, I wrote A Comment on Litmus Test Moments. I gave an example of some litmus test moments (issues that will come back and haunt people if they were on the wrong side - like the housing bubble). I argued that rejecting Trump will be a "litmus test" in the future.

I updated the post in August, see: Update on Litmus Test Moments.

Some advice: Rejecting Trump sooner is better than later, but publicly rejecting him before the election is critical. Here is a Republican Congressional Candidate rejecting Trump today:

Dr. Christopher Peters, the Republican candidate in Iowa’s 2nd Congressional district, is announcing today that he will not vote for Donald Trump for president. ...

“I should have spoken out against him much earlier, and regret that I failed to do so,” Peters adds.

Send a message to the future! It is important that Trump loses and loses badly. You will feel better about yourself in a few years when you can honestly say you didn't vote for Trump.  It will be even better if you can point to a public post opposing Trump written before the election (twitter, Facebook, blog, etc).  You will thank me later.

from Calculated Risk http://ift.tt/2dGrLuM
via YQ Matrix

Q3 Review: Ten Economic Questions for 2016

At the end of last year, I posted Ten Economic Questions for 2016. I followed up with a brief post on each question. The goal was to provide an overview of what I expected in 2016 (I don't have a crystal ball, but I think it helps to outline what I think will happen - and understand - and change my mind, when the outlook is wrong).

By request, here is a quick Q3 review. I've linked to my posts from the beginning of the year, with a brief excerpt and a few comments:

10) Question #10 for 2016: How much will housing inventory increase in 2016?

Right now my guess is active inventory will increase in 2016 (inventory will decline seasonally in December and January, but I expect to see inventory up again year-over-year in 2016). I don't expect a double digit surge in inventory, but maybe a mid-single digit increase year-over-year.  If correct, this will keep house price increases down in  2015 (probably lower than the 5% or so gains in 2014 and 2015).

According to the August NAR report on existing home sales, inventory was down 10.1% year-over-year in August, and the months-of-supply was at 4.7 months.  It now appears inventory will decrease in 2016.  I changed my view on this earlier this year.

Two of the key reasons inventory is low: 1) A large number of single family home and condos were converted to rental units. Last year, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors, and rents have increased substantially, and the investors are not selling (even though prices have increased too). Most of these rental conversions were at the lower end, and that is limiting the supply for first time buyers. 2) Baby boomers are aging in place (people tend to downsize when they are 75 or 80, in another 10 to 20 years for the boomers). Instead we are seeing a surge in home improvement spending, and this is also limiting supply.

9) Question #9 for 2016: What will happen with house prices in 2016?

Low inventories, and a decent economy suggests further price increases in 2016. However I expect we will see prices up less in 2016, than in 2015, as measured by these house price indexes - mostly because I expect more inventory.

If is early, but the recently released Case-Shiller data showed prices up 5.1% year-over-year in July. The price increase is a little lower than in 2015 (prices were up 5.25% nationally in 2015), even with less inventory.

8) Question #8 for 2016: How much will Residential Investment increase?

My guess is growth of around 4% to 8% in 2016 for new home sales, and about the same percentage growth for housing starts. Also I think the mix between multi-family and single family starts will shift a little more towards single family in 2016.

Through August, starts were up 6.1% year-over-year compared to the same period in 2015.  New home sales were up 13.3% year-over-year.  My guess is starts will increase about 4% to 8% this year (as expected), new home sales will be little higher.

7) Question #7 for 2016: What about oil prices in 2016?

It is impossible to predict an international supply disruption, however if a significant disruption happens, then prices will move higher. Continued weakness in Europe and China seems likely, however sluggish demand will be somewhat offset by less tight oil production. It seems like the key oil producers (Saudi, etc) will continue production at current levels. This suggests in the short run (2016) that prices will stay low, but probably move up a little in 2016. I'll guess WTI will be up from the current price [WTI at $38 per barrel] by December 2016 (but still under $50 per barrel).

As of this morning, WTI futures are at $51 per barrel.

6) Question #6 for 2016: Will real wages increase in 2016?

For this post the key point is that nominal wages have been only increasing about 2% per year with some pickup in 2015. As the labor market continues to tighten, we should start see more wage pressure as companies have to compete more for employees. I expect to see some further increase in nominal wage increases in 2016 (perhaps over 3% later in the year). The year-over-year change in real wages will depend on inflation, and I expect headline CPI to pickup some this year as the impact on headline inflation of declining oil prices fades.

Through September, nominal hourly wages were up 2.6% year-over-year. This is a pickup from last year - and wage growth appears to be trending up. It looks like Wages will increase at a faster rate in 2016.

5) Question #5 for 2016: Will the Fed raise rates in 2016, and if so, by how much?

I've seen several people arguing the Fed will be cutting rates by the end of 2016 - I think that is unlikely. Instead I think the Fed will be cautious - and they will not want to reverse course. Right now I think something around three rate hikes in 2016 is likely.

Events have pushed the Fed to delay rate increases, and it now looks like zero or one are the most likely number of rate hikes in 2016.  My guess right now is the Fed will hike rates in December.

4) Question #4 for 2016: Will the core inflation rate rise in 2016? Will too much inflation be a concern in 2016?

Due to some remaining slack in the labor market (example: elevated level of part time workers for economic reasons), I expect these measures of inflation will be close to the Fed's target in 2016.

So currently I think core inflation (year-over-year) will increase further in 2016, but too much inflation will not be a serious concern in 2016.

It is early, but inflation has moved up close to the Fed target through August.

3) Question #3 for 2016: What will the unemployment rate be in December 2016?

Depending on the estimate for the participation rate and job growth (next question), it appears the unemployment rate will decline to around 4.5% by December 2016. My guess is based on the participation rate declining slightly in 2016 and for decent job growth in 2016 (however less in 2016 than in 2015).

The unemployment rate was 5.0% in September, unchanged from 5.0% in December.  I still expect the unemployment rate to decline later this year.

2) Question #2 for 2016: How many payroll jobs will be added in 2016?

Energy related construction hiring will decline in 2016, but I expect other areas of construction to be solid. For manufacturing, growth in the auto sector will probably slow this year, but the drag on manufacturing employment from the strong dollar should be less in 2016.

As I mentioned above, in addition to layoffs in the energy sector, exporters will have a difficult year - but probably not the severe contraction as in 2015, and more companies will have difficulty finding qualified candidates. Even with some boost from lower oil prices - and some additional public hiring, I expect total jobs added to be lower in 2016 than in 2015.

So my forecast is for gains of around 200,000 payroll jobs per month in 2015. Lower than in 2015, but another solid year for employment gains given current demographics.

Through September 2016, the economy has added 1.6 million jobs; or 178,000 per month.  It now appears employment gains will be lower than in 2015 (as expected), and somewhat below 200,000 per month in 2016.

1) Question #1 for 2016: How much will the economy grow in 2016?

In addition, the sharp decline in oil prices should be a net positive for the US economy in 2016. And, hopefully, the negative impact from the strong dollar will fade in 2016. The most likely growth rate is in the mid-2% range again ...

GDP growth was sluggish again in the first half (just up 1.1% annualized), and GDP is now tracking 2.1% in Q3.

Currently it looks like 2016 is unfolding mostly as expected with some key exceptions (one of the reasons I write down what I think will happen).  I changed my view on Fed rate hikes earlier this year, and now I expect only 1 hike in 2016.  I've also revised down my outlook for GDP and existing home inventory is declining again this year.

Residential investment, house prices, oil prices, inflation, wage growth and employment are unfolding about as I expected.

from Calculated Risk http://ift.tt/2d7dZP0
via YQ Matrix

Sunday Night Futures

Sunday Night from 9:00 PM to 10:30 PM ET: the Second Presidential Debate, at Washington University in St. Louis, St. Louis, MO.

From Politifact Live fact-checking the second Trump, Clinton presidential debate

Weekend:
• Schedule for Week of Oct 9, 2016

Monday:
• At 10:00 AM ET, The Fed will release the monthly Labor Market Conditions Index (LMCI).

From CNBC: Pre-Market Data and Bloomberg futures: S&P futures and DOW futures are mostly unchanged (fair value).

Oil prices were up over the last week with WTI futures at $49.23 per barrel and Brent at $51.32 per barrel.  A year ago, WTI was at $46, and Brent was at $49 - so oil prices are UP year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.26 per gallon (down about 5 cents per gallon from a year ago).

from Calculated Risk http://ift.tt/2d1rmFk
via YQ Matrix

Schedule for Week of Oct 2, 2016

The key economic report this week is September Retail Sales on Friday.

A key focus will be on the second Presidential debate on Sunday, Oct 9th.

----- Sunday, Oct 9th -----
At 9:00 PM ET, the Second Presidential Debate, at Washington University in St. Louis, St. Louis, MO

----- Monday, Oct 10th -----
10:00 AM ET: The Fed will release the monthly Labor Market Conditions Index (LMCI).

----- Tuesday, Oct 11th -----
6:00 AM ET: NFIB Small Business Optimism Index for September.

----- Wednesday, Oct 12th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Job Openings and Labor Turnover Survey for August from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings increased in July to 5.871 million from 5.643 million in June.

The number of job openings (yellow) were up 1% year-over-year, and Quits were up 9% year-over-year.

2:00 PM: The Fed will release the FOMC minutes for the September meeting.

----- Thursday, Oct 13th -----
8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 254 thousand initial claims, up from 249 thousand the previous week.

----- Friday, Oct 14th -----
8:30 AM: The Producer Price Index for September from the BLS. The consensus is for a 0.2% increase in prices, and a 0.1% increase in core PPI.

8:30 AM ET: Retail sales for September will be released.  The consensus is for 0.6% increase in retail sales in September.

This graph shows retail sales since 1992 through August 2016.

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for August.  The consensus is for a 0.1% increase in inventories.

10:00 AM: University of Michigan's Consumer sentiment index (preliminary for October). The consensus is for a reading of 92.0, up from 91.2 in August.

1:30 PM: Speech by Fed Chair Janet Yellen, Macroeconomic Research After the Crisis, At the Federal Reserve Bank of Boston’s Annual Research Conference: The Elusive "Great" Recovery: Causes and Implications for Future Business Cycle Dynamics, Boston, Massachusetts

from Calculated Risk http://ift.tt/2dMGOF5
via YQ Matrix

Public and Private Sector Payroll Jobs: Carter, Reagan, Bush, Clinton, Bush, Obama

By request, here is another update of an earlier post through the September 2016 employment report including all revisions.

NOTE: Several readers have asked if I could add a lag to these graphs (obviously a new President has zero impact on employment for the month they are elected). But that would open a debate on the proper length of the lag, so I'll just stick to the beginning of each term.

Note: We frequently use Presidential terms as time markers - we could use Speaker of the House, or any other marker.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

First, here is a table for private sector jobs. The top two private sector terms were both under President Clinton.  Reagan's 2nd term saw about the same job growth as during Carter's term.  Note: There was a severe recession at the beginning of Reagan's first term (when Volcker raised rates to slow inflation) and a recession near the end of Carter's term (gas prices increased sharply and there was an oil embargo).

Term	Private Sector Jobs Added (000s)
Carter	9,041
Reagan 1	5,360
Reagan 2	9,357
GHW Bush	1,510
Clinton 1	10,884
Clinton 2	10,082
GW Bush 1	-811
GW Bush 2	415
Obama 1	1,921
Obama 2	9,1711
144 months into 2nd term: 10,005 pace.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter and George H.W. Bush only served one term, and President Obama is in the final months of his second term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble, and left during the bursting of the housing bubble. Mr. Obama (blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (yellow) took office.

There was a recession towards the end of President G.H.W. Bush (purple) term, and Mr Clinton (light blue) served for eight years without a recession.

Click on graph for larger image.

The first graph is for private employment only.

The employment recovery during Mr. G.W. Bush's (red) first term was sluggish, and private employment was down 811,000 jobs at the end of his first term.   At the end of Mr. Bush's second term, private employment was collapsing, and there were net 396,000 private sector jobs lost during Mr. Bush's two terms. 

Private sector employment increased slightly under President G.H.W. Bush (purple), with 1,510,000 private sector jobs added.

Private sector employment increased by 20,966,000 under President Clinton (light blue), by 14,717,000 under President Reagan (yellow), and 9,041,000 under President Carter (dashed green).

There were only 1,921,000 more private sector jobs at the end of Mr. Obama's first term.  Forty four months into Mr. Obama's second term, there are now 11,092,000 more private sector jobs than when he initially took office.

 A big difference between the presidencies has been public sector employment.  Note the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, and 2010. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).

However the public sector has declined significantly since Mr. Obama took office (down 398,000 jobs). This has been a significant drag on overall employment.

And a table for public sector jobs. Public sector jobs declined the most during Obama's first term, and increased the most during Reagan's 2nd term.

Term	Public Sector Jobs Added (000s)
Carter	1,304
Reagan 1	-24
Reagan 2	1,438
GHW Bush	1,127
Clinton 1	692
Clinton 2	1,242
GW Bush 1	900
GW Bush 2	844
Obama 1	-708
Obama 2	3101
144 months into 2nd term, 338 pace

Looking forward, I expect the economy to continue to expand through 2016 (at least), so I don't expect a sharp decline in private employment as happened at the end of Mr. Bush's 2nd term (In 2005 and 2006 I was warning of a coming down turn due to the bursting of the housing bubble - and I predicted a recession in 2007).

For the public sector, the cutbacks are over.  Right now I'm expecting some further increase in public employment during the last few months of Obama's 2nd term, but obviously nothing like what happened during Reagan's second term.

Below is a table of the top four presidential terms for private job creation (they also happen to be the four best terms for total non-farm job creation).

Clinton's two terms were the best for both private and total non-farm job creation, followed by Reagan's 2nd term.

Currently Obama's 2nd term is on pace to be the 3rd best ever for private job creation.  However, with very few public sector jobs added, Obama's 2nd term is only on pace to be the fourth best for total job creation.

Note: Only 310 thousand public sector jobs have been added during the forty four months of Obama's 2nd term (following a record loss of 708 thousand public sector jobs during Obama's 1st term).  This is less than 25% of the public sector jobs added during Reagan's 2nd term!

Top Employment Gains per Presidential Terms (000s)
Rank	Term	Private	Public	Total Non-Farm
1	Clinton 1	10,884	692	11,576
2	Clinton 2	10,082	1,242	11,312
3	Reagan 2	9,357	1,438	10,795
4	Carter	9,041	1,304	10,345
	Obama 21	9,171	310	9,481
	Pace2	10,005	338	10,343
144 Months into 2nd Term 2Current Pace for Obama's 2nd Term

The last table shows the jobs needed per month for Obama's 2nd term to be in the top four presidential terms. Right now it looks like Obama's 2nd term will be 2nd or 3rd best for private employment, and probably 4th or 5th for total employment.

Average Jobs needed per month (000s) for remainder of Obama's 2nd Term
to Rank	Private	Total
#1	428	524
#2	228	461
#3	47	329
#4	-33	216

from Calculated Risk http://ift.tt/2eanMJi
via YQ Matrix

Las Vegas Real Estate in September: Sales up 8% YoY, Inventory down 18%

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported Southern Nevada Housing Supply Shrinks as Sales Rise and Prices Stabilize, GLVAR Housing Statistics for September 2016

The Greater Las Vegas Association of REALTORS® (GLVAR) reported Friday that the local housing supply is shrinking as Southern Nevada home sales increase and prices stabilize.
...
According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in September was 3,541, up from 3,285 total sales in September 2015. Compared to the same month one year ago, 7.6 percent more homes, and 8.9 percent more condos and townhomes sold in September.
...
The total number of single-family homes listed for sale on GLVAR’s Multiple Listing Service in September was 12,794, down 4.4 percent from one year ago. GLVAR tracked a total of 2,241 condos, high-rise condos and townhomes listed for sale on its MLS in September, down 34.8 percent from one year ago.

By the end of September, GLVAR reported 7,427 single-family homes listed without any sort of offer. That’s down 8.7 percent from one year ago. For condos and townhomes, the 1,161 properties listed without offers in September represented a 49.8 percent decrease from one year ago.

GLVAR continues to track fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. In September, 4.6 percent of all local sales were short sales – when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 6.8 percent of all sales one year ago. Another 6.0 percent of all September sales were bank-owned, down from 7.1 percent one year ago.
emphasis added

1) Overall sales were up 7.8% year-over-year.

2) Total active inventory (single-family and condos) is down 18% from a year ago (A very sharp decline in condo inventory).

3) Distressed sales are down from 13.9% of sales in September 2015, to 10.6% of sales in September 2016.

from Calculated Risk http://ift.tt/2dBdoYT
via YQ Matrix

Phoenix Real Estate in September: Sales up 6%, Inventory up 3% YoY

This is a key housing market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.

Inventory was up 3.4% year-over-year in September.  This is the seventh consecutive month with a YoY increase in inventory, following fifteen consecutive months of YoY declines in Phoenix.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in September were up 6.3% year-over-year.

2) Cash Sales (frequently investors) were down to 20.2% of total sales.

3) Active inventory is now up 3.4% year-over-year.  

More inventory (a theme in 2014) - and less investor buying - suggested price increases would slow sharply in 2014.  And prices increases did slow in 2014, only increasing 2.4% according to Case-Shiller.

In 2015, with falling inventory, prices increased a little faster -  Prices were up 6.3% in 2015 according to Case-Shiller.

Now inventory is increasing a little again, and - if this trend continues in Phoenix - price increases will probably slow in Phoenix.    Prices in Phoenix are up 2.2% through July (about a 3.7% annual rate) - slower than in 2015.

September Residential Sales and Inventory, Greater Phoenix Area, ARMLS
	Sales	YoY Change Sales	Cash Sales	Percent Cash	Active Inventory	YoY Change Inventory
Sept-08	6,179	---	1,041	16.8%	54,4271	---
Sept-09	7,907	28.0%	2,776	35.1%	38,340	-29.6%
Sept-10	6,762	-14.5%	2,904	42.9%	45,202	17.9%
Sept-11	7,892	16.7%	3,470	44.0%	26,950	-40.4%
Sept-12	6,478	-17.9%	2,849	44.0%	21,703	-19.5%
Sept-13	6,313	-2.5%	2,106	33.4%	23,405	7.8%
Sept-14	6,252	-1.0%	1,609	25.7%	26,492	13.2%
Sept-15	6,980	11.6%	1,573	22.5%	23,396	-11.7%
Sept-16	7,421	6.3%	1,499	20.2%	24,195	3.4%
1 September 2008 probably includes pending listings

from Calculated Risk http://ift.tt/2did3rZ
via YQ Matrix

Preview of September Employment Report

On Friday at 8:30 AM ET, the BLS will release the employment report for September. The consensus, according to Bloomberg, is for an increase of 168,000 non-farm payroll jobs in September (with a range of estimates between 155,000 to 200,000, and for the unemployment rate to be unchanged at 4.9%.

The BLS reported 151,000 jobs added in August.

Here is a summary of recent data:

• The ADP employment report showed an increase of 154,000 private sector payroll jobs in September. This was below expectations of 170,000 private sector payroll jobs added. The ADP report hasn't been very useful in predicting the BLS report for any one month, but in general, this suggests employment growth somewhat below expectations.

• The ISM manufacturing employment index increased in September to 49.7%. A historical correlation between the ISM manufacturing employment index and the BLS employment report for manufacturing, suggests that private sector BLS manufacturing payroll jobs decreased about 20,000 in September. The ADP report indicated 6,000 manufacturing jobs lost in September.

The ISM non-manufacturing employment index increased in September to 57.2%. A historical correlation between the ISM non-manufacturing employment index and the BLS employment report for non-manufacturing, suggests that private sector BLS non-manufacturing payroll jobs increased about 265,000 in September.

Combined, the ISM indexes suggests employment gains of about 245,000.  This suggests employment growth well above expectations.

• Initial weekly unemployment claims averaged 256,000 in September, down from 263,000 in August. For the BLS reference week (includes the 12th of the month), initial claims were at 251,000, down from 261,000 during the reference week in August.

The decrease during the reference suggests fewer layoffs in September as compared to August.  This suggests a positive employment report.

• The final September University of Michigan consumer sentiment index increased to 91.2 from the August reading of 89.8. Sentiment is frequently coincident with changes in the labor market, but there are other factors too like gasoline prices and possibly politics.

• Conclusion: Unfortunately none of the indicators alone is very good at predicting the initial BLS employment report. The ADP report would suggest a report weaker than the consensus, and the ISM reports, unemployment claims, consumer sentiment all suggest stronger job growth.

My guess is the September report will be above the consensus forecast.

from Calculated Risk http://ift.tt/2dsGjl6
via YQ Matrix

IBM Empower 2016 Tweetchat: What Is Innovation In Procurement?

Although I was unable to attend Empower 2016 in person, IBM reached out to me as a Top 50 Futurist to join fellow procurement thought leaders on a Live Tweetchat to talk about Innovation In Procurement.

You can throw your hat in to the proverbial discussion ring and share your thoughts on what Procurement Innovation really means, by clicking on the image below or using the hashtag #NewWaytoSource.

It promises to be a lively and thought-provoking discussion.

30

from Procurement Insights http://ift.tt/2cSCQe7
This content was assembled for you by the YQ Matrix platform

The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.

For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.

ISM Non-Manufacturing Index increased sharply to 57.1% in September

The September ISM Non-manufacturing index was at 57.1%, up from 51.4% in August. The employment index increased in September to 57.2%, up from 50.7% in August. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management:September 2016 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in September for the 80th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee. "The NMI® registered 57.1 percent in September, 5.7 percentage points higher than the August reading of 51.4 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased substantially to 60.3 percent, 8.5 percentage points higher than the August reading of 51.8 percent, reflecting growth for the 86th consecutive month, at a noticeably faster rate in September. The New Orders Index registered 60 percent, 8.6 percentage points higher than the reading of 51.4 percent in August. The Employment Index increased 6.5 percentage points in September to 57.2 percent from the August reading of 50.7 percent. The Prices Index increased 2.2 percentage points from the August reading of 51.8 percent to 54 percent, indicating prices increased in September for the sixth consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth in September. The comments from the respondents are mostly positive about business conditions and the overall economy. A degree of uncertainty does exist due to geopolitical conditions coupled with the upcoming U.S. presidential election."
emphasis added

Click on graph for larger image.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was well above the consensus forecast of 52.9, and suggests faster expansion in September than in August.

from Calculated Risk http://ift.tt/2deF18h
via YQ Matrix

CoreLogic: House Prices up 6.2% Year-over-year in August

Notes: This CoreLogic House Price Index report is for August. The recent Case-Shiller index release was for July. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic US Home Price Report Shows Prices Up 6.2 Percent Year Over Year in August 2016

Home prices nationwide, including distressed sales, increased year over year by 6.2 percent in August 2016 compared with August 2015 and increased month over month by 1.1 percent in August 2016 compared with July 2016, according to the CoreLogic HPI.
...
“Home prices are now just 6 percent below the nominal peak reached in April 2006,” said Dr. Frank Nothaft, chief economist for CoreLogic. “With prices forecasted to increase by 5 percent over the next year, prices will be back to their peak level in 2017.”

“Housing values continue to rise briskly on stronger fundamental and investor-fueled demand, as well as lack of adequate supply,” said Anand Nallathambi, president and CEO of CoreLogic. “This continued price appreciation is contributing to a growing affordability crisis in many markets around the country.”
emphasis added

Click on graph for larger image.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was up 1.1% in August (NSA), and is up 6.2% over the last year.

This index is not seasonally adjusted, and this was another solid month-to-month increase.

The index is still 6.0% below the bubble peak in nominal terms (not inflation adjusted).

The second graph shows the YoY change in nominal terms (not adjusted for inflation).

The YoY increase had been moving sideways over the last two years.

The year-over-year comparison has been positive for fifty five consecutive months since turning positive year-over-year in February 2012.

from Calculated Risk http://ift.tt/2dswMXO
via YQ Matrix

ISM Manufacturing index increased to 51.5 in September

The ISM manufacturing index indicated expansion in September. The PMI was at 51.5% in August, up from 49.4% in August. The employment index was at 49.7%, up from 48.3% in August, and the new orders index was at 55.1%, up from 49.1% in August.

From the Institute for Supply Management: September 2016 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector expanded in September following one month of contraction in August, and the overall economy grew for the 88th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The September PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent. The New Orders Index registered 55.1 percent, an increase of 6 percentage points from the August reading of 49.1 percent. The Production Index registered 52.8 percent, 3.2 percentage points higher than the August reading of 49.6 percent. The Employment Index registered 49.7 percent, an increase of 1.4 percentage points from the August reading of 48.3 percent. Inventories of raw materials registered 49.5 percent, an increase of 0.5 percentage point from the August reading of 49 percent. The Prices Index registered 53 percent in September, the same reading as in August, indicating higher raw materials prices for the seventh consecutive month. Manufacturing expanded in September following one month of contraction in August, with nine of the 18 industries reporting an increase in new orders in September (up from six in August), and 10 of the 18 industries reporting an increase in production in September (up from eight in August)."
emphasis added

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was above expectations of 50.2%, and suggests manufacturing expanded in September.

from Calculated Risk http://ift.tt/2dlahHE
via YQ Matrix

Monday: ISM Mfg, Construction Spending, Auto Sales

Weekend:
• Schedule for Week of Oct 2, 2016

Monday:
• Early, Reis Q3 2016 Office Survey of rents and vacancy rates.

• At 10:00 AM, ISM Manufacturing Index for September. The consensus is for the ISM to be at 50.2, up from 49.4 in August. The employment index was at 48.3%, and the new orders index was at 49.1%.

• Also at 10:00 AM, Construction Spending for August. The consensus is for a 0.3% increase in construction spending.

• All Day, Light vehicle sales for September. The consensus is for light vehicle sales to increase to 17.4 million SAAR in September, from 16.9 million in August (Seasonally Adjusted Annual Rate).

From CNBC: Pre-Market Data and Bloomberg futures: S&P futures and DOW futures are up slightly (fair value).

Oil prices were up over the last week with WTI futures at $47.88 per barrel and Brent at $50.19 per barrel.  A year ago, WTI was at $46, and Brent was at $47 - so oil prices are UP year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.22 per gallon (down less than $0.10 per gallon from a year ago).

from Calculated Risk http://ift.tt/2d75O69
via YQ Matrix

Pricing notice: Proposal to revise bauxite specifications

Industrial Minerals proposes to revise all Shanxi-origin bauxite specifications at the end of October.

from MPW - Pricing News http://ift.tt/2dL6Mcn
via IFTTT

Personal Income increased 0.2% in August, Spending increased less than 0.1%

The BEA released the Personal Income and Outlays report for August:

Personal income increased $39.3 billion (0.2 percent) in August according to estimates released today by the Bureau of Economic Analysis. ... personal consumption expenditures (PCE) increased $6.2 billion (less than 0.1 percent).
...
Real PCE decreased 0.1 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The August PCE price index increased 1.0 percent year-over-year and the August PCE price index, excluding food and energy, increased 1.7 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through August 2016 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was at consensus expectations.  And the increase in PCE was below the 0.2% increase consensus.

Using the two-month method to estimate Q3 PCE growth, PCE was increasing at a 3.1% annual rate in Q3 2016. (using the mid-month method, PCE was increasing 2.6%). This suggests decent PCE growth in Q3, even with the weak August report.

from Calculated Risk http://ift.tt/2dEX3RY
via YQ Matrix