Cyber Monday, Manufacturing, Pending Home Sales

November 30, 2015

Monday – November 30

Americans flocked to the malls this past weekend and online to purchase gifts as the holiday shopping season unofficially kicked off with Black Friday. The National Retail Federation (NRF) reported that more than 151 million people said they shopped in stores and/or online during the long weekend. The NRF went on to say that more than 121 million people will purchase items online today, which is known as Cyber Monday, a 5% decrease from last year’s 126 million.

The manufacturing sector continues to be a drag on the U.S. economy as evidenced by the recent weak numbers from the New York State region and today’s report from the Chicago area. The Chicago Purchasing Managers Index, a measure of business activity, fell to 48.7, below the 55 expected and down from the 56.2 recorded in October. Readings below 50 indicate contraction, above 50, expansion.

The National Association of REALTORS® reports that Pending Home Sales in October increased 0.2%, below the 0.7% expected following two months of declines. The index is up nearly 4% from a year ago and has produced annual gains for 14 straight months. Pending Home Sales measures signed real estate contracts for existing single-family homes, condos and co-ops. Lawrence Yun, NAR chief economist, says pending sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.

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Home Sales, Consumer Spending, Labor Market

November 25, 2015

Wednesday – November 25

The Commerce Department reported on Wednesday that sales of new single-family homes rose in October from September signaling that the housing market continues to steadily improve. New Home Sales were up 10.7% in October to an annual rate of 495,000, below the 504,000 expected. However, September was revised lower to 447,000 from 468,000. Sales in the Northeast hit their highest level since January 2010. Supply still remains a concern with just 5.5 months to clear out the current supply.

Consumer spending slipped in October as Americans saw their incomes rise, but opted to save their hard earned money rather than spend it on goods and services. Personal Spending was unchanged last month when expectations called for a 0.3% rise. Consumer spending accounts for more than two-thirds of U.S. economic activity and has been sliding in the past three months.

The Labor market continues to strengthen as evidenced by the low amount of Americans filing for first time unemployment benefits. The Labor Department reported that Weekly Initial Jobless Claims fell 11,000 to 260,000 in the latest week and below the 272,000 expected. Claims are now below the 300,000 mark for 38 consecutive weeks, the longest stretch in years, and are close to levels not seen since the early 1970s.

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Home Prices, GDP, Consumer Confidence

November 24, 2015

Tuesday – November 24

Home prices experienced solid gains across the U.S. as the sector continues to improve. The Case Shiller 20-city Index saw home price gains rise 5.5% on an annual basis from September 2014 to September 2015, up from the 5.1% recorded in August on a year-over-year basis. However, the lofty gains could be shutting many buyers out of the market. The national index rose 0.8% from August to September. “Home prices and housing continue to show strength with home prices rising at more than double the rate of inflation,” said David Blitzer, managing director at S&P Dow Jones Indices, which produces the numbers for the Case Shiller report.

The Bureau of Economic Analysis reported on Tuesday that the second reading for economic growth in the third quarter was revised higher from the initial reading, led by a buildup in inventories. Gross Domestic Product rose to 2.1% from the 1.5% originally reported, but well below the 3.9% recorded in the second quarter. Within the numbers it showed that consumer spending edged lower, though it still remains at a brisk pace of 3%. Gross domestic product is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.

Consumer Confidence declined to the lowest levels since September 2014 as Americans were less favorable on the job market. The Conference Board reported that its Consumer Confidence Index fell to 90.4 in November, below the 99.6 expected and down from the 99.1 registered in October. Within the report it said that those anticipating more jobs in the months ahead declined, while those anticipating fewer jobs increased.

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Existing Home Sales, Mortgage Rates, Thanksgiving

November 23, 2015

Monday – November 23

The National Association of REALTORS® (NAR) reported on Monday that Existing Home Sales in October declined 3.5% from September to an annual rate of 5.36 million units, lower than the 5.50 million expected. Year-over-year, sales were up 3.9%. The NAR said that the WestERN region was hit the hardest with a near 9% decline. The median home price for all housing types was $219,600, which is 5.8% above the $207,500 recorded in October 2014. Inventories declined to 4.5%.A spokesperson from the NAR said

Fannie Mae released its November Economic and Housing Outlook revealing that it sees economic growth rising the fourth quarter of 2015 bringing the yearly total to 2.2% with a slight pickup to 2.4% in 2015. Fannie Mae said that solid consumer spending, an increase in construction activity, home sales and home prices appear poised to offset global headwinds. On the housing end, Fannie Mae expects mortgage rates to rise only gradually through next year, and an improving income trend should support affordability.

Fun facts about Thanksgiving. On December 26, 1941, President Franklin D. Roosevelt signed a joint resolution of Congress changing the national day of Thanksgiving from the last Thursday of the month to the fourth Thursday. The first Macy’s Thanksgiving parade took place in New York City in 1924. It featured animals from the Central Park Zoo instead of floats; floats didn’t join the route until 1927. The average person consumes 3,000 calories during Thanksgiving dinner. With other meals and snacking included, it can add up to around 4,000 and 6,000 calories.

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No Housing Bubble, Homes Sales in August, Black Friday

November 20, 2015

Friday – November 20

The San Francisco Federal Reserve Bank reported this week that it doesn’t see another housing bubble forming. In its findings, the bank said that home prices have rebounded and are nearly back to the pre-recession peak. The bank said, “However, conditions in the latest boom appear far less precarious than those in the previous episode. The current run-up exhibits a less-pronounced increase in the house price-to-rent ratio and an outright decline in the household mortgage debt-to-income ratio—a pattern that is not suggestive of a credit-fueled bubble.”

Research firm CoreLogic reported this week that cash sales accounted for 31.7% of total home sales in August, down from 34.9% in the same month last year. August rose 0.8% from July. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. According to CoreLogic’s report, the cash sales share typically increases month over month in August due to seasonality in the housing market. CoreLogic does see cash sales to return to pre-recession levels in 2017.

Black Friday deals will be coming early this year and could start as early as this weekend. A spokesperson for says deals are spread out over a longer time period this year. Amazon, Best Buy and Costco have already begun to roll out deals, but the “doorbuster” prices will be reserved for Thanksgiving night and Friday. Black Friday is the day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It’s common for retailers to offer special promotions and to open early to draw in customers.

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Unemployment, Manufacturing, Obamacare

November 19, 2015

Thursday – November 19

Americans filing for first-time unemployment benefits fell in the latest week and now are near levels seen in the early 1970s. The Labor Department reported on Thursday that Weekly Initial Jobless Claims fell 5,000 in the latest week to 271,000, which was in line with expectations. The four week moving average of claims, which irons out seasonal abnormalities, rose by 3,000 to 270,750, the highest in eight weeks, though still a very low number. The low level of claims signals an improving job market, while the economy remains on a steady upward growth pattern.

Manufacturing activity in the Philadelphia region improved marginally in November. The Philadelphia Fed Index rose to 1.9 in November from the -4.5 recorded in October. Within the report it showed that the new orders and shipment components remained negative, while the employment index improved overall, though there was a decline in average work hours. Manufacturing activity has been edging lower throughout the year, due in part to a decline in the energy sector.

In an about-face, UnitedHealth Group Inc. the U.S.’s biggest health insurer, is considering pulling out of Obamacare, a month after the insurer said that it would expand its presence in the program. The insurer is pulling back on marketing efforts for the plans it’s selling this year under the Affordable Care Act, and may exit from that market in 2017. UnitedHealth cited the business has proven to be more costly than expected.

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Housing Starts, Apple, Heating Costs

November 18, 2015

Wednesday – November 18

The Commerce Department reported on Wednesday that Housing Starts in October fell 11% to an annual rate of 1.060 million units versus the 1.173 million expected. October’s numbers hit a seven-month low, but starts remained above the one million mark for seven straight months. This is the longest such streak since 2007. On the brighter side, Building Permits, a sign of future construction, rose 4.1% from September. The data signals a sustainable housing market recovery.

Shares of Apple received a boost this morning after investment banking giant Goldman Sachs said Apple’s stock could rise 43% in the next 12 months. Goldman Sachs cited that the iPhone Upgrade Program, Apple Music, and upcoming streaming television products could be a game changer for how the market views the tech giant. The price per share of Apple is currently around $116 and could go to $163, said Goldman Sachs.

The Department of Energy (DOE) recently reported that due to warmer temperatures expected this winter, U.S. consumers will most likely pay less to heat their homes this season compared to last year. For those using propane, expect to see a 27% decline or $767 this season. Homes that heat with oil could see a drop of 15% or $362, while natural gas users will see a savings of 5% or $31. “U.S. households in all regions of the country can expect to pay lower heating bills this winter, because temperatures are forecast to be warmer than last winter and that means less demand for heat,” said the DOE’s Energy Information Administrator Adam Sieminski.

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Home building steady, Consumer Price Index, Thanksgiving Travel

November 17, 2015

Tuesday – November 17

After hovering near 10-year highs, home builder sentiment slipped in November. The National Association of Home Builders reported that its Housing Market Index fell three points in November from October to 62. Any number over 50 indicates that more builders view conditions as good rather than poor. “The November report is a pullback from an unusually high October and is more in line with the consistent, modest growth that we have seen throughout the year,” said NAHB Chief Economist David Crowe. “A firming economy, continued job creation and affordable mortgage rates should keep housing on an upward trajectory as we approach 2016.”

Consumer prices edged higher in October, fueled by increases in rents and energy. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.2% last month, in line with estimates, after two straight monthly declines. When stripping out volatile food and energy, the so-called Core CPI also rose by 0.2%, which matched expectations. The year-over-year Core CPI rose by 1.9%, just near the Fed’s target rate of 2%, which is considered hot given that Gross Domestic Product is now around 2%.

Thanksgiving travel could be a bit more congested this year due to a firming economy, lower gas prices and a stronger job market. The four-day holiday weekend should see 46.9 million Americans traveling 50 or more miles from home, which would be the highest number since 2007, according to auto club AAA. Most of the traveling, or 90%, will be driving. AAA reported that the average price for a regular gallon of gasoline is $2.14, 75 cents cheaper than last year this time. AAA went on to say that the average price for a regular gallon of gas could drop below $2 by Christmas.

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Manufacturing Weak, Gas Prices Mortgage Applications Down

November 16, 2015

Monday – November 16

Business activity in the New York State region declined for the fourth straight month in November, signaling that manufacturing activity remains weak. The New York State Index fell to 10.7 in November, below the -6.0 expected after falling in October. Within the report, it showed that the new orders and shipments components declined, while the employment numbers were also weak.

Just in time for the Thanksgiving drive to Grandma’s house, gas prices should slip this week after the price of oil fell to near $40 a barrel in trading in New York City. The national average price for a regular gallon of gasoline hit $2.15 this week, down from $2.21 a week ago and $2.28 a month ago. “Americans are finding the cheapest gas prices for this time of year since 2008,” said Mark Jenkins, spokesman of AAA – The auto club group. “Now that oil prices are falling again, pump prices should get even cheaper as we approach the holiday travel season.”

The Mortgage Bankers Association (MBA) reports that its Builder Application Survey showed mortgage applications for new home purchases fell by 8% in October from September. The decline was due in part to the new TRID rules that went into effect recently. The survey tracks application volume from mortgage subsidiaries of home builders across the country. Despite the decrease, the MBA’s estimate of new single-family housing sales for October was up more than 7% from a year ago.

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