Thursday, 31 March 2016
Preview: Employment Report for March
The BLS reported 242,000 jobs added in February.
Here is a summary of recent data:
• The ADP employment report showed an increase of 200,000 private sector payroll jobs in March. This was close to expectations of 203,000 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 close to expectations.
• Since the employment report is being released on the 1st of April, the March ISM manufacturing and non-manufacturing employment indexes are not available yet, and will be released after the employment report this month.
• Initial weekly unemployment claims averaged close to 263,000 in March, about the same as in February. For the BLS reference week (includes the 12th of the month), initial claims were at 265,000, up slightly from 262,000 during the reference week in February.
This suggests about the same level of layoffs in March as in February (very few).
• The preliminary March University of Michigan consumer sentiment index decreased to 90.0 from the February reading of 91.7. Sentiment is frequently coincident with changes in the labor market, but there are other factors too - like lower gasoline prices.
• Conclusion: Some of the usual indicators will be released after the employment report this month. The available data suggests job growth in the 200 thousand plus range again in March.
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Low demand puts pressure on fluorspar prices entering Q2
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Wednesday, 30 March 2016
Thursday: Unemployment Claims, Chicago PMI
The March employment report likely showed another strong month for the labor market. We anticipate a healthy 190,000 gain in nonfarm payrolls, with the private sector contributing 185,000. Job cuts likely continued in the mining sector given low oil prices. Meanwhile, early signs from the manufacturing sector point to a rebound in activity this month, so we may see a pick-up in hiring after the decline in February. Elsewhere, construction and services likely saw further healthy gains.Thursday:
We expect the unemployment rate to hold in at 4.9% ... there is a risk that the unemployment rate heads lower to 4.8%. On wages, we think average hourly earnings posted a nice 0.3% mom gain, reversing the 0.1% decline previously. This would leave the yoy rate unchanged at 2.2%.
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 266 thousand initial claims, up from 265 thousand the previous week.
• At 9:45 AM, Chicago Purchasing Managers Index for March. The consensus is for a reading of 50.3, up from 47.6 in February.
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Zillow Forecast: Expect Slightly Slower Growth in February for the Case-Shiller Indexes
From Zillow: February Case-Shiller Forecast: More of the Same, But Slightly Slower
The January Case-Shiller indices grew at the exact same annual pace as December. Looking ahead, expect all three February Case-Shiller indices to show similar but slightly slower slower growth, with the 10-City Composite Index expected to register sub-5 percent annual growth for the first time in months, according to Zillow’s February Case-Shiller forecast.The year-over-year change for the 10-city and 20-city indexes, and the Case-Shiller National index, will probably be slightly lower in the February report than in the January report.
The February Case-Shiller National Index is expected to gain another 0.3 percent in February from January, down from 0.5 percent growth in January from December. We expect the 10-City Index to grow 4.5 percent year-over-year, and the 20-City Index to grow 5.3 percent over the same period. The National Index also looks set to rise 5.3 percent year-over-year.
All SPCS forecasts are shown in the table below. These forecasts are based on today’s January Case-Shiller data release and the February 2016 Zillow Home Value Index (ZHVI). The February Case-Shiller Composite Home Price Indices will not be officially released until Tuesday, April 26.
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3Peak Sees Chip Output Jump on Deal With Israel's TowerJazz
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Takata Shares Dive on Report That Airbag-Related Recall Costs May Be $24 Billion
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Tuesday, 29 March 2016
Five Years After Japan Quake, Rewiring of Auto Supply Chain Hits Limits
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Real Prices and Price-to-Rent Ratio in January
The year-over-year increase in prices is mostly moving sideways now around 5%. In January, the index was up 5.4% YoY.
In the earlier post, I graphed nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). Case-Shiller, CoreLogic and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $274,000 today adjusted for inflation (37%). That is why the second graph below is important - this shows "real" prices (adjusted for inflation).
It has been almost ten years since the bubble peak. In the Case-Shiller release this morning, the National Index was reported as being 3.3% below the bubble peak. However, in real terms, the National index is still about 17% below the bubble peak.
Nominal House Prices
The first graph shows the monthly Case-Shiller National Index SA, the monthly Case-Shiller Composite 20 SA, and the CoreLogic House Price Indexes (through December) in nominal terms as reported.
In nominal terms, the Case-Shiller National index (SA) is back to October 2005 levels, and the Case-Shiller Composite 20 Index (SA) is back to April 2005 levels, and the CoreLogic index (NSA) is back to June 2005.
Real House Prices
The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.
In real terms, the National index is back to January 2004 levels, the Composite 20 index is back to September 2003, and the CoreLogic index back to January 2004.
In real terms, house prices are back to late 2003 levels.
Price-to-Rent
In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.
Here is a similar graph using the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes.
This graph shows the price to rent ratio (January 1998 = 1.0).
On a price-to-rent basis, the Case-Shiller National index is back to August 2003 levels, the Composite 20 index is back to May 2003 levels, and the CoreLogic index is back to August 2003.
In real terms, and as a price-to-rent ratio, prices are back to late 2003 levels - and the price-to-rent ratio maybe moving a little more sideways now.
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Yellen: The Outlook, Uncertainty, and Monetary Policy
Although the baseline outlook has changed little on balance since December, global developments pose ongoing risks. These risks appear to have contributed to the financial market volatility witnessed both last summer and in recent months.
One concern pertains to the pace of global growth, which is importantly influenced by developments in China. There is a consensus that China's economy will slow in the coming years as it transitions away from investment toward consumption and from exports toward domestic sources of growth. There is much uncertainty, however, about how smoothly this transition will proceed and about the policy framework in place to manage any financial disruptions that might accompany it. These uncertainties were heightened by market confusion earlier this year over China's exchange rate policy.
A second concern relates to the prospects for commodity prices, particularly oil. For the United States, low oil prices, on net, likely will boost spending and economic activity over the next few years because we are still a major oil importer. But the apparent negative reaction of financial markets to recent declines in oil prices may in part reflect market concern that the price of oil was nearing a financial tipping point for some countries and energy firms. In the case of countries reliant on oil exports, the result might be a sharp cutback in government spending; for energy-related firms, it could entail significant financial strains and increased layoffs. In the event oil prices were to fall again, either development could have adverse spillover effects to the rest of the global economy.
If such downside risks to the outlook were to materialize, they would likely slow U.S. economic activity, at least to some extent, both directly and through financial market channels as investors respond by demanding higher returns to hold risky assets, causing financial conditions to tighten. But at the same time, we should not ignore the welcome possibility that economic conditions could turn out to be more favorable than we now expect. The improvement in the labor market in 2014 and 2015 was considerably faster than expected by either FOMC participants or private forecasters, and that experience could be repeated if, for example, the economic headwinds we face were to abate more quickly than anticipated. For these reasons, the FOMC must watch carefully for signs that the economy may be evolving in unexpected ways, good or bad.
emphasis added
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Case-Shiller: National House Price Index increased 5.4% year-over-year in January
This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.
Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs.
From S&P: Home Price Increases Continue in January According to the S&P/Case-Shiller Home Price Indices
The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 5.4% annual increase in January 2016. The 10-City Composite is up slightly at 5.1% for the year. The 20-City Composite’s year-over-year gain is 5.7%. After seasonal adjustment, the National, 10-City Composite, and 20-City Composite rose 0.5%, 0.8%, and 0.7%, respectively, from the prior month.Click on graph for larger image.
...
Before seasonal adjustment, the National Index, the 10-City Composite, and the 20-City Composite all remained unchanged in January. After seasonal adjustment, all three composites reported strong advances. Eleven of 20 cities reported increases in January before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month
emphasis added
The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).
The Composite 10 index is off 11.8% from the peak, and up 0.5% in January (SA).
The Composite 20 index is off 10.2% from the peak, and up 0.8% (SA) in January.
The National index is off 3.3% from the peak, and up 0.7% (SA) in January. The National index is up 30.6% from the post-bubble low set in December 2011 (SA).
The second graph shows the Year over year change in all three indices.
The Composite 10 SA is up 5.1% compared to January 2015.
The Composite 20 SA is up 5.7% year-over-year..
The National index SA is up 5.4% year-over-year.
Prices increased (SA) in 20 of the 20 Case-Shiller cities in December seasonally adjusted. (Prices increased in 11 of the 20 cities NSA) Prices in Las Vegas are off 37.8% from the peak.
The last graph shows the bubble peak, the post bubble minimum, and current nominal prices relative to January 2000 prices for all the Case-Shiller cities in nominal terms.
As an example, at the peak, prices in Phoenix were 127% above the January 2000 level. Then prices in Phoenix fell slightly below the January 2000 level, and are now up 57% above January 2000 (57% nominal gain in almost 16 years).
These are nominal prices, and real prices (adjusted for inflation) are up about 40% since January 2000 - so the increase in Phoenix from January 2000 until now is about 17% above the change in overall prices due to inflation.
Seven cities - Charlotte, Boston, Dallas, Denver, Portland, San Francisco and Seattle. Detroit prices are only 5% above the January 2000 level.
I'll have more on house prices later.
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Takata Plans to Increase Capital Around September as Recall Costs Mount: Kyodo
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Monday, 28 March 2016
Takata Plans to Increase Capital Around Sept as Recall Costs Mount: Kyodo
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Tuesday: Yellen, Case-Shiller House Prices
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for January. Although this is the January report, it is really a 3 month average of November, December and January prices. The consensus is for a 5.8% year-over-year increase in the Comp 20 index for January. The Zillow forecast is for the National Index to increase 5.6% year-over-year in January.
• At 12:20 PM, Speech by Fed Chair Janet Yellen, Economic Outlook and Monetary Policy, At the Economic Club of New York Luncheon, New York, New York
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New U.S. Sanctions a Headache for Companies Linked to North Korean Gold
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Black Knight: House Price Index up 0.1% in January, Up 5.3% year-over-year
From Black Knight: Black Knight Home Price Index Report: January Transactions; U.S. Home Prices Up 0.1 Percent for the Month; Up 5.3 Percent Year-Over-Year
• U.S. home prices were basically flat for the month, rising just 0.1% from December, and up 5.3% on a year-over- year basisThe year-over-year increase in the index has been about the same for the last year.
• This puts national home prices up 26.7% since the bottom of the market at the start of 2012
• At $253K, the national level HPI is now just 5.4% off its June 2006 peak of $267K (this last has been revised slightly - from $268K - due to additional historical data)
• New York again led gains among the states with 0.9 percent month-over-month appreciation, while Illinois saw the most negative movement at -0.4 percent
• Of the nation’s 40 largest metros, 9 hit new peaks:
◦Austin, TX ($287K)
◦Dallas, TX ($220K)
◦Denver, CO ($327K)
◦Houston, TX ($220K)
◦Kansas City, MO ($173K)
◦Nashville, TN ($222K)
◦Portland, OR ($326K)
◦San Francisco, CA ($728K)
◦San Jose, CA ($867K)
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McDonald’s, SciQuest and Lady Justice: Why The Canadian Judicial System Fails Its Citizens
“The first casualty when war comes is truth.” – US Senator Hiram Warren Johnson, 1918
We are all familiar with the above quote in its various forms. The irony is that even the truth as to who actually coined the phrase, is the subject of debate. While many sources attribute it to Senator Walker, others credit either Arthur Ponsonby or Samuel Johnson as the author of these words.
Truth – even within the context of its use, is a difficult thing to grasp.
Nowhere is this elusiveness more evident than it is in the Canadian judicial system.
Sadly, justice in Canada is determined more by the size of one’s wallet, than it is the veracity of a particular case.
Ironically, I am directly involved with both of the cases below – although in each instance on opposite sides of the table. As you read further, you will understand what I mean, and how they are linked.
Case #1 – McDonald’s: A Poisoned Shake
“McDonald’s admitted that there was a “store-related compound in a milk shake” that was ingested by our 5 year old son but refuse to disclose what it is. We want them to release the report’s findings.” – change.org petition
This was the headline of our petition on change.org, which currently has 28,379 signatures.
The case is quite simple.
On July 22nd, 2013 our family of six visited the local McDonald’s drive through, to order milkshakes and ice cream.
After being ridiculed for ordering in English, our then 5 year old son’s milkshake was spiked with what McDonald’s admitted was a “store-related compound.”
While acknowledging that there was something in the shake per their own lab’s report, McDonald’s has not yet admitted as to how said compound ended up in only 1 shake out of the 50 or so shakes they served that day. Or how his was the only shake, of the 3 we ordered, to have the compound in it. You of course do not have to strain too hard to connect the dots back to the language taunts.
If you followed the story through the many newspaper articles, or television and radio broadcasts in the mainstream media, you will know that McDonald’s offered $1,000, then $3,000, and finally $50,000 to settle, without any promise to ever divulge the contents of the shake.
We turned them down flat, indicating that all we wanted to know was what was in the shake, so that we could determine what if any health problems would or could arise with our son in the future.
We also wanted to know the truth in terms of what had happened, and who was responsible.
We even went so far as to offer to sign an agreement that we would not seek financial restitution beyond the legal fees we had incurred to that point in time, and the medical costs associated with any treatment our son would require as a result of what he had ingested.
Our son by the way, has issues with his bladder. While at this point, we do not know the origins of his condition, knowing what was in his shake would obviously help in terms of treatment. Even if it wasn’t related to his condition, knowing would alleviate our worst fears.
Despite this, McDonald’s refuses to release to us the results of the lab report.
In an effort to get to the truth, and find out what the store related compound was, we sought to hire a lawyer so that we could sue the company. We were told that such an action would cost $100,000 and that even if we were successful, McDonald’s would likely appeal and tie us up in court until they had drained every penny we had.
The lawyer with whom we spoke, indicated that he had witnessed this battle of attrition in a case involving McDonald’s and a smaller enterprise in a dispute over land.
Even if we had the $100K, and survived the war of attrition and ultimately won our case, according to the lawyer, we could not recoup a single penny of our legal costs. The reason is that Quebec does not allow costs to be recovered from the losing party.
The only remaining option was for us to involve the police in the hopes that they would be able to obtain a copy of the report. We filed an official complaint and, provided the authorities with the sample that we had carefully maintained in our freezer, in the hope that their labs would be able to identify the store-related compound that McDonald’s had acknowledged was in the shake.
We are still waiting for the results.
In the end, we weren’t interested in the money – which is why we offered to waive our right to sue for financial damages beyond our legal fees and our son’s medical bills. We were only interested in one thing . . . the truth. What was put in our son’s shake?
The Canadian judicial system has failed us simply because the size of McDonald’s wallet is considerably larger than ours.
Case 2 – SciQuest: A Campaign For Truth
“I gave the U. S. company opportunities to come forward and have their side of the story told – even going so far as to give them free and unfettered access to my readership. For whatever reason, they declined. Instead, they turned to the courts and to lawyers and they have a bigger chequebook than mine. I hope that you will provide your support by way of a contribution to offset my legal costs – which I estimate will be approximately $100,000.” – March 21st, 2016 Procurement Insights
The above is an excerpt from my March 21st post on the Procurement Insights blog. In the article, I talk about my being sued for $3.5 million ($4.6 million Canadian), by a large U.S. company who took exception to my coverage of their challenges in the market.
Just a quick note, when it comes to Canada’s judicial system, $100,000 seems to be the magic number.
I wrote a series of articles on this U.S. corporation based on the information I received from a number of sources – including both former and current employees of the company.
This information included e-mails and other materials – such as audio/video evidence which, along with my corresponding research, substantiates the accuracy of my coverage.
Last August, I received a letter from this U.S. company threatening legal action in Canada – and specifically in Ontario where, unlike the United States and the Province of Quebec, the onus would fall on me to prove that what I had written was true. I have no problem with this, because I stand by everything I wrote. In fact, I even offered the company free and unfettered access to present their side of the story to my blog’s more than 24,000 followers. I also told them that I would welcome any additional information they could provide that would show where I had made a mistake, so that I could correct it. The company ignored this offer.
The problem I did have however, is that in Ontario I would likely have to reveal my sources. This is something that I did not want, nor do I now want, to do.
I filed a motion for a change in venue to either Quebec – where I reside, or the United States, where the company is based. By the way, my entire coverage is focused exclusively on their business in the United States, which is where the vast majority of their revenue is derived.
I lost the motion, which means that besides being hit with $22,000 in costs plus the legal fees of my own lawyers, I may be legally compelled to reveal the names of the people who came forward with information because they wanted to do what was right.
You can read about my coverage – including the two most recent articles, through the following link; http://ift.tt/1RJRHSt
In the meantime, we will now begin the process of going to trial so that the truth – not my version of the truth, or the U. S. Company’s version of the truth . . . but the truth, the whole truth, will come out.
In this regard, I am more than comfortable with the prospect of this happening, or as my father would say – letting the chips fall where they may.
However these chips, courtesy of the Canadian judicial system, cost $100,000, of which I will only be able to recover 60 to 70 percent of these fees, when I am successful.
Faced with such a daunting amount, the easiest thing for me to have done, would have been to fold up my tent and pull down the posts when I first received the letter threatening action. Or when I received the SLAPP document indicating that a lawsuit was imminent, or at any other stage before spending $22K plus legal fees.
But what about the truth?
Similar to our battle with McDonald’s – where it might have been easier to simply take the $50K and hope for the best, we now realize that truth and justice are not synonymous. Okay, maybe this revelation is not a complete surprise, but it was certainly disappointing.
The truth, is the truth. It can’t be bought or sold, it just is. Whether it be in the form of an unidentified store-related compound, or in the text and audio from reliable sources, it is what it is. (NOTE; if you want to put me up to the light of scrutiny with regard to the thoroughness of my research and resulting coverage, check out these other stories; NIGP #CodeGate and, the recent Manitoba Hydro $85 million tender controversy.)
Getting to that truth is where justice is supposed to come into the picture. But unfortunately, justice comes at a price, and that price represents an oppressively heavy cost in which only those who have the largest wallets can gain access.
The contradiction is that in cases such as the ones above, those who have the means, do not necessarily have the desire for the truth to come out.
I know that you will want to support this cause so that we can continue to fight for the truth! You can, by making a small donation through the following link: http://ift.tt/1RJRHSt
30
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Personal Income increased 0.2% in February, Spending increased 0.1%
Personal income increased $23.7 billion, or 0.2 percent ... according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $11.0 billion, or 0.1 percent.The following graph shows real Personal Consumption Expenditures (PCE) through February 2016 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.2 percent in February, in contrast to a decrease of less than 0.1 percent in January. ... The price index for PCE decreased 0.1 percent in February, in contrast to an increase of 0.1 percent in January. The PCE price index, excluding food and energy, increased 0.1 percent, compared with an increase of 0.3 percent.
The February PCE price index increased 1.0 percent from February a year ago. The February PCE price index, excluding food and energy, increased 1.7 percent from February a year ago.
Click on graph for larger image.
The dashed red lines are the quarterly levels for real PCE.
The increase in personal income was larger than expected. And the increase in PCE was at the 0.1% increase consensus.
On inflation: The PCE price index increased 1.0 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.7 percent year-over-year in February.
Using the two-month method to estimate Q1 PCE growth, PCE was increasing at a 1.8% annual rate in Q1 2016 (using the mid-month method, PCE was increasing 1.6%). This suggests sluggish PCE growth in Q1.
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Sunday, 27 March 2016
Monday: Personal Income and Outlays, Pending Home Sales
The program, known as EB-5, received applications from 17,691 investors in 2015, up from 11,744 in 2014 and 6,554 in 2013, according to figures released last week by U.S. Citizenship and Immigration Services.Weekend:
...
The EB-5 program offers green cards to aspiring immigrants who invest at least $500,000 into certain businesses that have been determined to create at least 10 jobs per investor.
First created in 1990, EB-5 was barely used until the aftermath of the 2008 recession, when real-estate developers realized it offered a cheap and accessible form of financing when banks were reluctant to lend. The program has since become mainstream within the real-estate development world, particularly among high-end developers in New York, who recruit heavily in China.
• Schedule for Week of March 27, 2016
Monday:
• At 8:30 AM ET, Personal Income and Outlays for February. The consensus is for a 0.1% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.2%.
• At 10:00 AM, Pending Home Sales Index for February. The consensus is for a 1.5% increase in the index.
• At 10:30 AM, Dallas Fed Manufacturing Survey for March. This is the last of the regional Fed manufacturing surveys for March.
From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are up 4 and DOW futures are up 44 (fair value).
Oil prices were mixed over the last week with WTI futures at $39.75 per barrel and Brent at $40.64 per barrel. A year ago, WTI was at $46, and Brent was at $54 - so prices are down about 15% to 22% year-over-year, respectively.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.04 per gallon (down almost $0.40 per gallon from a year ago).
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Saturday, 26 March 2016
Schedule for Week of March 27, 2016
Other key indicators include March vehicle sales, the March ISM manufacturing index, February Personal income and outlays, and the January Case-Shiller house price index.
Fed Chair Janet Yellen speaks on Tuesday on the "Economic Outlook and Monetary Policy".
8:30 AM ET: Personal Income and Outlays for February. The consensus is for a 0.1% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.2%.
10:00 AM: Pending Home Sales Index for February. The consensus is for a 1.5% increase in the index.
10:30 AM: Dallas Fed Manufacturing Survey for March. This is the last of the regional Fed manufacturing surveys for March.
9:00 AM: S&P/Case-Shiller House Price Index for January. Although this is the January report, it is really a 3 month average of November, December and January prices.
This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the December 2015 report (the Composite 20 was started in January 2000).
The consensus is for a 5.8% year-over-year increase in the Comp 20 index for January. The Zillow forecast is for the National Index to increase 5.6% year-over-year in January.
12:20 PM: Speech by Fed Chair Janet Yellen, Economic Outlook and Monetary Policy, At the Economic Club of New York Luncheon, New York, New York
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
8:15 AM: The ADP Employment Report for March. This report is for private payrolls only (no government). The consensus is for 203,000 payroll jobs added in March, down from 214,000 in February.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 266 thousand initial claims, up from 265 thousand the previous week.
9:45 AM: Chicago Purchasing Managers Index for March. The consensus is for a reading of 50.3, up from 47.6 in February.
8:30 AM: Employment Report for March. The consensus is for an increase of 210,000 non-farm payroll jobs added in March, down from the 242,000 non-farm payroll jobs added in February.
The consensus is for the unemployment rate to be unchanged at 4.9%.
This graph shows the year-over-year change in total non-farm employment since 1968.
In February, the year-over-year change was 2.67 million jobs.
A key will be the change in real wages.
10:00 AM: ISM Manufacturing Index for March. The consensus is for the ISM to be at 50.5, up from 49.5 in February.
Here is a long term graph of the ISM manufacturing index.
The ISM manufacturing index indicated contraction at 49.5% in February. The employment index was at 48.5%, and the new orders index was at 51.5%.
10:00 AM: Construction Spending for February. The consensus is for a 0.2% increase in construction spending.
All day: Light vehicle sales for March. The consensus is for light vehicle sales to increase to 17.6 million SAAR in March from 17.5 million in February (Seasonally Adjusted Annual Rate).
This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the February sales rate.
10:00 AM: University of Michigan's Consumer sentiment index (final for March). The consensus is for a reading of 90.9, up from the preliminary reading 91.0.
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Friday, 25 March 2016
DOT: Vehicle Miles Driven increased 2.0% year-over-year in January
Travel on all roads and streets changed by 2.0% (4.8 billion vehicle miles) for January 2016 as compared with January 2015.The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.
Travel for the month is estimated to be 240.7 billion vehicle miles.
The seasonally adjusted vehicle miles traveled for January 2016 is 264.3 billion miles, a 2.7% (7.0 billion vehicle miles) increase over January 2015. It also represents a -0.8% change (-2.1 billion vehicle miles) compared with December 2015.
The rolling 12 month total is moving up - mostly due to lower gasoline prices - after moving sideways for several years.
Click on graph for larger image.
In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.
Miles driven (rolling 12) had been below the previous peak for 85 months - an all time record - before reaching a new high for miles driven in January 2015.
The second graph shows the year-over-year change from the same month in the previous year.
In January 2015, gasoline averaged $2.06 per gallon according to the EIA. That was down from January 2015 when prices averaged $2.21 per gallon.
Gasoline prices aren't the only factor - demographics are also important. However, with lower gasoline prices, miles driven on a rolling 12 month basis, is setting new highs each month.
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Q4 GDP Revised Up to 1.4% Annual Rate
Real gross domestic product -- the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 1.4 percent in the fourth quarter of 2015, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.Here is a Comparison of Third and Second Estimates. PCE growth was revised up from 2.0% to 2.4%. Residential investment was revised up from 8.0% to 10.1%. This was above the consensus forecast.
The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 1.0 percent. With this third estimate for the fourth quarter, the general picture of economic growth remains largely the same; personal consumption expenditures (PCE) increased more than previously estimated ...
emphasis added
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Thursday, 24 March 2016
Low purity graphite grades revised down
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Metspar prices lowered as demand dries up
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Price Briefing 18-24 March
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Kansas City Fed: Regional Manufacturing Activity "remained negative" in March
The Federal Reserve Bank of Kansas City released the March Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity remained negative.The Kansas City region continues to be hit hard by lower oil prices and the stronger dollar.
“Factories reported another decline in activity in March, although the drop was somewhat smaller than in the previous three months” said Wilkerson.
...
Tenth District manufacturing activity remained negative, while producers’ expectations for future activity weakened. Most price indexes edged higher in March, but remained at low levels.
The month-over-month composite index was -6 in March, up from -12 in February and -9 in January ... The new orders, order backlog, and employment indexes improved slightly but remained in negative territory.
emphasis added
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Wednesday, 23 March 2016
Thursday: Durable Goods, Unemployment Claims
Over the longer term, the supply of homes for purchase should considerably improve as baby boomers increasingly downsize from single-family to multifamily homes. But recent experience suggests that downsizing typically begins when people are in their late seventies, a milestone the leading edge of the baby boomers will not reach for another five years (Rappaport 2015). Until then, the supply of single-family homes for purchase is likely to remain tight, putting continuing upward pressure on home prices.Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for 268 thousand initial claims, up from 265 thousand the previous week.
• Also at 8:30 AM, Durable Goods Orders for February from the Census Bureau. The consensus is for a 3.0% decrease in durable goods orders.
• At 11:00 AM, the Kansas City Fed Survey of Manufacturing Activity for March.
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Comments on February New Home Sales
Sales were down 6.1% year-over-year (YoY) compared to February 2015. However, we have to remember February 2015 was the strongest month of 2015 at 545,000 SAAR. Sales for all of 2015 were 501,000 (up 14.5% from 2014) - and since January and February were especially strong months last year, the YoY comparisons have been difficult so far.
Earlier: New Home Sales increased to 512,000 Annual Rate in February.
Click on graph for larger image.
This graph shows new home sales for 2015 and 2016 by month (Seasonally Adjusted Annual Rate).
The comparisons for the first two months was difficult. I also expect lower growth this year overall.
Houston (and other oil producing areas) will have a problem this year. Inventory of existing homes is increasing quickly and prices will probably decline in those areas. And that means new home construction will slow in those areas too.
And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. Now I'm looking for the gap to close over the next several years.
The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through February 2016. This graph starts in 1994, but the relationship had been fairly steady back to the '60s.
Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales.
I expect existing home sales to move more sideways, and I expect this gap to slowly close, mostly from an increase in new home sales.
However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist.
Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
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From Paris, With Vinyl: Courrèges, Space Age Pioneer, Flies Again
By MATTHEW SCHNEIER from NYT Fashion & Style http://ift.tt/1Ryl5sH
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Tuesday, 22 March 2016
Richmond Fed: Manufacturing Sector Activity Expanded in March
Fifth District manufacturing activity expanded in March, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders increased this month. Employment advanced at a slightly faster pace in March, while average wages grew moderately and the average workweek lengthened. Prices of raw materials and finished goods rose at a faster pace compared to last month.Based on the regional surveys released so far for March, it seems likely the ISM manufacturing index will suggest expansion in March after five months of contraction.
Overall, manufacturing activity increased markedly in March. The composite index for manufacturing climbed to a reading of 22, the highest since April 2010. The index for shipments added 38 points and the new orders index advanced 30 points, finishing at strong readings of 27 and 24, respectively. Manufacturing employment grew at a slightly faster pace this month; the employment indicator added two points to end at 11.
emphasis added
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Monday, 21 March 2016
Intricate Jewelry, From a Mother-Daughter Duo
By HILARY MOSS from NYT T Magazine http://ift.tt/1PngdFv
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A Few Comments on February Existing Home Sales
Going forward, there are some economic reasons for some softness in existing home sales in certain areas. Low inventory is probably holding down sales in many areas, and there will be weakness in some oil producing areas (see: Houston has a problem).
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. So some slowing for existing home sales is not a big deal for the economy.
Earlier: Existing Home Sales decreased in February to 5.08 million SAAR
I expected some increase in inventory last year, but that didn't happened. Inventory is still very low and falling year-over-year (down 1.1% year-over-year in February). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases.
The following graph shows existing home sales Not Seasonally Adjusted (NSA).
Click on graph for larger image.
Sales NSA in February (red column) were the highest since February 2007 (NSA).
Note that January and February are usually the slowest months of the year.
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Why An EOI? Hydro Provides A Simple Answer
In my last post What’s An EOI? More Insights From Hydro on the $85M Controversy, I shared with you the answers I received from Hydro regarding the EOI process they used to enter into an $85M agreement with Tetra Tech.
Based on my research relating to the use of EOI’s or Expression of Interest, I also provided additional information, including under which circumstances this process has been utilized in the past.
While the post shed some much needed light on the controversy, there was still one question that I had to ask . . . why did Hydro choose to use an EOI as opposed to an RFP in their selection of a vendor for the needed services?
Here is the response I received from Hydro spokesperson Scott Powell:
“In the simplest terms, we made the decision to go forward on the EOI because based on the market info we received through that process, it lead us to believe that the RFP would be a redundant process that would result in a similar conclusion in terms of the supplier and costs. There would be no additional gains to be achieved via RFP process.”
Rather than provide my take on this, what do you think?
Is the above response sufficient in terms of explaining the decision to award the contract based on an EOI alone?
Per Colin Cram’s comment in the March 10th post Manitoba Hydro Single Source “Controversy”: A Time For Answers Over Headlines, does it provide the necessary “detailed and convincing explanation for the way this business was awarded and in language that can be understood by ordinary people” to justify the selection process?
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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.
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