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By New_Deal_democrat April 5, 2014 9:29 am
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Weekly Indicators: the spring rebound continues edition
The big monthly news for March was the 197,000 jobs added. Aggregate hours worked equalled their 2007 high, and private sector jobs made an all time high.  Average wages, however, declined slightly.  Vehicle sales also made a post-recession high. Both ISM manufacturing and services were positive. Factory orders increased.  February construction spending increased slightly, but simply reversed a revised negative January reading.


My weekly report is not a forecasting tool.  Rather, the high frequency weekly indicators are meant to provide an up-to-this-week snapshot of the economy.  They will confirm a trend or indicate a switch in trend well before monthly reports.


As recently, let's start again with consumer spending:


Consumer spending

Gallup's 14 day average of consumer spending averaged between $80 and $100 for most of 2013, with frequent YoY comparisons over $20, and few less than +$10.  In 2013 the YoY range for the ICSC declined to between +1.5% and +3.0%, while Johnson Redbook YoY was between from +2% to a high over +4%.  The ICSC and Johnson Redbook are at the low end of their recent range.  For the second week in a row we finally got a decent reading from Gallup.


Steel production from the American Iron and Steel Institute 

  • -3.4% w/w
  • -0.4% YoY

Steel production over the last several years has generally been in a decelerating uptrend.  After a strongly positive move late in 2013, YoY comparisons turned negative again in January and have been mixed since.



 Railroad transport from the AAR 

  • +20,200 carloads up 7.2% YoY
  • +13,300 carloads up 7.8% ex-coal
  • +30,400 or +13.5% intermodal units
  • +51,500 or +10.0% YoY total loads

Shipping transport

Rail transport ended 2013 on a very positive note.  Rail traffic was very volatile in February but has rebounded sharply in the last three weeks.  The Harpex index slowly rose, then stabilized, but has slowly declined since July 2013. The Baltic Dry Index made a new 3 year high in December 2013, then fluctuated and have now declined.  Both the Baltic Dry Index and the Harpex Index were in a range near their bottom for about 2 years, but rose significantly above those ranges in 2013.


Interest rates and credit spreads

  • 5.00% BAA corporate bonds down -0.11%
  • 2.72% 10 year treasury bonds down -0.02%
  • 2.28% credit spread between corporates and treasuries down -0.09%

Interest rates for corporate bonds made a low of 4.46% in November 2012. Treasuries fell to a possible once-in-a-lifetime low of 1.47% in July 2012, but rose over 1.6% above that mark in late 2013.  Yields declined significantly since the relatively poor December employment report three months ago, and have remained in that range.  Spreads returned to their 3 year low set over one month ago.  Their recent high was over 3.4% in June 2011.

Housing metrics

Mortgage applications from the Mortgage Bankers Association:

  • w/w purchase applications up +3%
  • YoY purchase applications down -17%
  • w/w refinance applications up +1%

Both refinance applications and purchase applications are still near their recent post-recession lows.

Housing prices

  • YoY this week +11.4%

Housing prices bottomed in November 2011 on Housing Tracker, and YoY comparisons rose to just shy of +12% in late 2013. In the last month the YoY reading has declined from this range, but rebounded this week.  The still sharp YoY increase in prices might actually be a negative, given higher mortgage rates.

Real estate loans, from the FRB H8 report:

  • -0.2% w/w
  • +0.3% YoY
  • +3.8% from their bottom

Loans turned up at the end of 2011, but with higher interest rates, the comparisons rolled over and had been almost consistently negative since April 2013, although they have improved in the last month, turning positive YoY for the last two weeks.

Money supply


  • -0.6% w/w
  • +0.9% m/m
  • +9.3% YoY Real M1


  • +0.2% w/w
  • +0.3% m/m
  • +5.0% YoY Real M2

In January 2012, YoY Real M1 made a high of about 20%, and YoY Real M2 made a high of about 10.5%.  Growth in both decelerated since then.  Real M2 made a new 2 year low several months ago, but both Real M1 and Real M2 have improved substantially since.


Employment metrics

 Initial jobless claims

  • 326,000 up +15,,000
  • 4 week average 319,500 up +1,750

Initial claims rose this week, but were still quite low, and are near their post-recession lows on a 4 week basis.


The American Staffing Association Index was unchanged at 94. It is up +2.97% YoY.


Only late 2007 and early 2008 were better than 2013. The YoY comparison faded in February but stabilized in the last few weeks and improved this week.


Tax Withholding 

  • $204.0 B for the month of March vs. $186.6 B last year, up +$17.4 B or +9.3%
  • $179.3 B for the last 20 days ending Thursday vs. $169.7 B for 20 days ending Thursday 1 year ago, up +$9.6 B +5.7%.

Both measures continue to show reasonable to substantial improvement YoY.


Oil prices and usage

  • Oil down -$0.53 to $101.14 w/w
  • Gas up +.03 to $3.58 w/w
  • Usage 4 week average YoY up +0.9%

The price of Oil began its seasonal climb in February, but has plateaued in the last three weeks at readings below those of 1, 2, and 3 years ago. The 4 week average for gas usage was again positive this week, after being negative for eight straight weeks, suggesting that its weakness had to do with the unusually severe winter.  In the larger picture, it continues to look like in 2013 the Oil choke collar finally loosened its hold on the economy slightly.

Bank lending rates

The TED spread and LIBOR are both somnolent. LIBOR made a new 3 year low this past week.


JoC ECRI Commodity prices

  • Up +0.64 to 125.40 w/w
  • -1.51 YoY 

The long leading indicators continued their 2014 trends. Treasury rates are significantly below their December highs. Money supply continued its rebound.  Bank lending rates remain low.  Real estate loans have turned slightly positive.  Only mortgage applications continue to be poor.


The short leading indicators were mixed but remained positive this week.  Initial jobless claims increased but were still low.  Credit spreads were at their post-recession lows. Commodities, tax withholding, gas and oil were neutral.


The coincident reports also turned generally positive.  Consumer spending was weakly positive and tax withholding was positive.  Rail transport was also strongly positive.  YoY comparisons of gas usage were up.  Only steel and shipping were negative.


This week was another very positive week. The winter slowdown is over, and the spring spring is here.


Have a nice weekend!

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