U.S. Pending Home Sales Decline

The National Association of Realtors (NAR) reported that pending home sales fell 1.3% during April (-3.3% y/y) to an index level of 109.8 following a 0.9% March slip. The index is reported on a 2001=100 basis.

Pending sales figure continued to exhibit mixed performance across regions. The index in the Midwest fell 4.7% following a 1.2% decline. For the South, the index fell 2.7%, the first monthly decline since November. The index in the Northeast declined 1.7% after a 3.1% March fall. To the upside was the index for the West. It rose 5.8% to the highest level since December.

The pending home sales index measures home sales when the sales contract is signed, analogous to the new home sales report. In contrast, existing home sales are recorded when the sale is closed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity parallels the level of closed existing home sales in the following two months. The series dates back to 2001, and the data are available in Haver's PREALTOR database.

Navigating the Different Signals from Inflation and Unemployment is the title of yesterday's speech by Fed Governor Lael Brainard and it can be found here https://www.federalreserve.gov/newsevents/speech/brainard20170530a.htm

Pending Home Sales (SA)	Apr	Mar	Feb	Apr Y/Y	2016	2015	2014
Total	109.8	111.3	112.3	-3.3	109.8	108.8	101.2
Northeast	97.2	98.9	102.1	-0.6	96.3	90.7	83.9
Midwest	104.4	109.6	110.9	-6.1	107.3	107.1	100.3
South	125.9	129.4	127.9	-2.3	122.8	123.0	115.5
West	100.0	94.5	97.3	-4.2	102.5	102.4	93.1

 

Chicago Purchasing Managers Index Rebounds
by Tom Moeller  May 31, 2017

The Chicago Purchasing Managers Business Barometer for May increased to 59.4 following a decline to 58.3 in April. It was the highest index level since November 2014. The latest reading surpassed expectations for 57.5 in the Action Economics Forecast Survey. Readings above 50 indicate growth, while those below 50 show declines in activity levels.

Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released tomorrow. The Haver figure also rose to 59.4, similarly the highest level since November 2014. During the last ten years, there has been a 61% correlation between this adjusted Chicago Purchasing Managers index and real GDP growth.

Most of the component series improved this month. The production, order backlog, inventory and supplier delivery indexes each rose. The new orders series, however, retraced most of its April increase.

The employment index strengthened to the highest level since October 2014, and continued to register positive job growth. Twenty-eight percent (NSA) of respondents reported higher payroll levels while 16% reported lower employment. During the last ten years, there has been a 74% correlation between the employment index and the m/m change in nonfarm payrolls.

The prices paid barometer eased slightly to the lowest level in six months. An unchanged 35% of respondents paid higher prices while nine percent reported lower prices, compared to 11% one year earlier.

The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. The ISM-Adjusted headline index is calculated by Haver Analytics using these data to construct a figure with the ISM methodology. Summary data are contained in Haver's USECON database, with detail, including the ISM-style index, in the SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA)	May	Apr	Mar	May '16	2016	2015	2014
General Business Barometer	59.4	58.3	57.7	50.3	53.1	50.3	60.7
ISM-Adjusted General Business Barometer	59.4	57.7	57.2	48.8	52.0	51.6	59.3
Production	63.2	59.5	61.7	49.3	54.7	52.5	64.5
New Orders	61.4	65.9	60.4	50.2	55.7	50.4	63.8
Order Backlogs	51.8	43.0	49.6	47.5	47.4	44.4	54.2
Inventories	55.5	53.3	60.5	38.1	47.2	52.1	55.9
Employment	57.1	53.8	49.1	48.8	49.4	50.3	56.0
Supplier Deliveries	59.6	56.0	54.4	57.6	52.8	52.5	56.5
Prices Paid	57.3	62.9	64.7	55.1	53.1	46.8	61.0

 

U.S. Gasoline & Crude Oil Prices Rise Further
by Tom Moeller  May 31, 2017

Regular gasoline prices nudged higher to $2.41 per gallon last week (2.9% y/y), the highest level in three weeks. Prices remained down five cents versus late April's high and lower than the 2014 high of $3.71 per gallon. Haver Analytics constructs factors adjusting for the seasonal variation in gasoline pump prices. The seasonally adjusted price held steady at $2.23 per gallon, but remained down from the $2.71 early-January high.

WTI crude oil prices increased to $50.40 per barrel last week (3.0% y/y) from $49.25 in the prior week. Prices remained down from $53.18 in early-April. Prices declined to $49.66 yesterday. Brent crude oil prices increased w/w to $53.08 per barrel last week and were $52.44 per barrel yesterday.

Natural gas prices improved to $3.14/mmbtu last week (71.1% y/y), then fell to $3.05 yesterday.

Last week, gasoline demand fell 1.9% y/y, while total petroleum product demand declined 0.8% y/y. Gasoline inventories were little changed y/y and inventories of all petroleum products eased 0.4% y/y. Crude oil input to refineries increased 6.3% y/y in the last four weeks.

The energy price data are reported by the U.S. Department of Energy. The petroleum demand and inventory figures are from the Oil & Gas Journal Weekly. These data can be found in Haver's WEEKLY database. The daily figures are in DAILY and greater detail on prices, demand and production, along with regional breakdowns, are in OILWKLY.

Weekly Energy Prices	05/29/17	05/22//17	05/15/17	Y/Y %	2016	2015	2014
Retail Gasoline ($ per Gallon, Regular)	2.41	2.40	2.37	2.9	2.31	2.03	2.30
Light Sweet Crude Oil, WTI ($ per bbl.)	50.40	49.25	47.06	3.0	43.22	48.90	93.64
Natural Gas ($/mmbtu, LA, WSJ)	3.14	3.08	3.12	71.1	2.49	2.62	4.37

 

U.S. Mortgage Loan Applications Rebound; Rates Decline
by Tom Moeller  May 31, 2017

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index increased 4.4% (-16.2% y/y) in the week ended May 19, after a 4.1% decline during the prior week. Refinancing applications rebounded 10.5% (-30.1% y/y) following a 5.7% fall. Purchase applications were off 0.8% (+2.9% y/y) after a 2.7% decline.

The effective interest rate on a 15-year mortgage held fell to 3.55%, the lowest level since late-November. The effective rate on a 30-year fixed-rate loan dropped to 4.28%. The rate on a Jumbo 30-year loan fell to 4.30%. For adjustable 5-year mortgages, the effective interest rate rose slightly to 3.40%.

The average mortgage loan size rose to $293,400 (3.7% y/y). For purchases, loan size decreased to $319,300 (+3.8% y/y); for refinancings, it rebounded to $260,500 (-0.5% y/y).

Applications for adjustable rate loans increased 20.0% y/y, while applications for fixed rate loans declined 18.4% y/y.

The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.

MBA Mortgage Applications (%, SA)	05/26/17	05/19/17	05/12/17	Y/Y	2016	2015	2014
Total Market Index		4.4	-4.1	-16.2	15.6	17.9	-41.4
Purchase		-0.8	-2.7	2.9	13.3	15.5	-12.9
Refinancing		10.5	-5.7	-30.1	17.3	19.7	-52.8
15-Year Mortgage Effective Interest Rate (%)		3.55	3.59	3.16 (May '16)	3.22	3.37	3.54