Initial claims remain somnolent, while continuing claims pop slightly
The Bonddad Blog
by New Deal democrat
1d ago
   - by New Deal democrat The divergence in the trends between initial and continuing claims continued this week, as the former continued their somnolent good news, while the latter had a slightly disconcerting pop. Initial claims declined -2,000 to 210,000, and the four week average declined -750 to 211,000. On the other hand, with the usual one week delay, continuing claims rose 24,000 to 1.819 million: The first two are in the same range they have been in for the past 4 to 6 months, while continuing claims are at their highest number but for 2 weeks in the past two years. O ..read more
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A detailed look at manufacturing, and an update on frieght
The Bonddad Blog
by New Deal democrat
2d ago
   - by New Deal democrat As I wrote on Monday, the big question for this year is whether the recessionary effects of the Fed rate hikes have just been delayed, or whether, because the rate hikes have stopped, so has the headwind they normally produce. Watching manufacturing and construction, especially housing construction, is what I expect to supply the answer. On Monday I focused on housing construction and sales. Since there’s no big economic news today, let’s take a more detailed look at manufacturing. There are three manufacturing metrics that are “official” components ..read more
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Repeat home sales price declined slightly in January; expect deceleration in the CPI measures of shelter to continue
The Bonddad Blog
by New Deal democrat
3d ago
   - by New Deal democrat As I noted again yesterday, house prices lag home sales, which in turn lag mortgage rates. Yesterday we got the final February reading on sales. This morning we got the final January read on prices, for repeat sales of existing homes. Last week’s report on existing home sales showed a sharp increase in February, a repeat of the seasonally adjusted sharp increase last February, which was almost completely taken back over the next two months. YoY sales remained down by over 3%, but the median price of an existing home remained higher by 5.7% - very much *unli ..read more
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As mortgage rates remain rangebound, so do new home sales
The Bonddad Blog
by New Deal democrat
4d ago
   - by New Deal democrat Let’s begin this post by putting why I am watching new home sales in context. The economy was kept out of recession last year, despite aggressive Fed rate hikes, in large part by commodity price deflation, much or most of which was triggered by the un-kinking of supply chains after the pandemic. That gale force economic tailwind is gone, but the Fed rate hikes remain. So the big question for this year is whether the effects of the Fed rate hikes have just been delayed, or whether, because the rate hikes have stopped, so has the headwind they normally produ ..read more
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Weekly Indicators for March 18 - 22 at Seeking Alpha
The Bonddad Blog
by New Deal democrat
6d ago
   - by New Deal democrat My “Weekly Indicators” post is up at Seeking Alpha. With interest rates having come down from their highs of five months ago, I anticipated that the shorter leading indicators might follow suit and improve. This week, there was some more evidence that they have. As usual, clicking over and reading should bring you up to the virtual moment as to the important indicators for the economy, and will reward me with a little pocket change ..read more
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Signs of a thaw in the frozen existing homes market, but a very long way to go
The Bonddad Blog
by New Deal democrat
1w ago
   - by New Deal democrat There’s no big economic news today, but yesterday existing home sales were released. While they have historically constituted up to 90% of the entire market, they have much less economic impact than new home sales, which involve all sorts of construction activity, followed by landscaping, furnishings, and other sales. Since the Fed started raising rates two years ago, the two markets have gone in entirely different directions, since existing homeowners are largely trapped by new or refinanced mortgages in the 3% range, while builders of new homes can make ..read more
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The positive streak of news from initial and continuing jobless claims continues
The Bonddad Blog
by New Deal democrat
1w ago
   - by New Deal democrat Initial and continuing claims once again continued their recent good streak.  Initial claims declined -2,000 to 210,000, while the four week moving average rose 2,500 to 211,250. Continuing claims, with the typical one week delay, increased 4,000 to 1.807 million: While these aren’t the 50+ year lows we saw 18 months ago, they’re not far off. For forecasting purposes, the YoY% change for initial claims is -15.0%, while the four week average is down -10.4%. Continuing claims are now only up 0.2%: Needless to say, these strongly indicate no rec ..read more
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“Are you better off than you were four years ago?”
The Bonddad Blog
by New Deal democrat
1w ago
   - by New Deal democrat No economic news today, so let me take a look at the supposed killer recent GOP meme that they claim is completely unanswerable: “Are you better off today than you were four years ago?” This is based primarily on consumer sentiment reading as well as polling that has consistently shown that most people think that the economy is poor, even though they rate their own situation as doing well. Dan Guild has a model comparing consumer sentiment with Presidential approval ratings. He concludes that Biden will lose re-election unless consumer sentiment as measure ..read more
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Housing construction rebounds in February, as permits and starts are stable and rebounding
The Bonddad Blog
by New Deal democrat
1w ago
   - by New Deal democrat Yesterday I wrote of how Fed rate hikes had not translated into a decline in the amount of housing under construction, and without that I did not see how a recession could occur. And in reaction to January’s housing construction report I concluded, “To signify a likely recession, units under construction would have to decline at least -10%, and needless to say, we’re not there. With permits having increased off their bottom, I am not expecting such a 10% decline in construction to materialize.” This morning’s report for February confirmed that sentiment, a ..read more
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Manufacturing and construction vs. the still-inverted yield curve
The Bonddad Blog
by New Deal democrat
1w ago
   - by New Deal democrat Prof. Menzie Chinn at Econbrowser makes the point that the yield curve is still inverted, and has not yet eclipsed the longest previous time between onset of such an inversion and a recession. So he believes the threat of recession is still on the table. And he’s correct about the yield curve, although it is getting very long in the tooth. In the past half century, the shortest time between a 10 minus 2 year inversion (blue in the graph below) to recession has been 10 months (1980) and the longest 22 months (2007). For the 10 year minus 3 month inversion ..read more
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