NOTE: sometime over the past week, the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we’ve used in creating our graphs, and also left us with about half the differentiating color options we had available and used before the upgrade…as a result, most of the FRED graphs we’ve included here previously, which were all stored at the FRED site and which we’d always hyperlinked back there, were reformatted, which was an improvement in some cases, and in some cases made them virtually unreadable… however, you can now click the text links we’ve always used in referring to them to view our graphs as interactives…but since an interactive graph doesn’t copy / paste into an email, this post was originally formatted with screenshots of the FRED graphs used, so we’re still experimenting with embedding the interactive graphs…if you see something that dont look right, we’re working on it, try back later…

reports we saw this week include those on consumer prices, industrial production, housing starts and existing home sales, and two regional Fed manufacturing surveys, in which the New York Fed and the Philadelphia Fed both reported improving conditions for that sector in their regions in March…there were also a few minor releases from the Bureau of Labor Statistics: Real Earnings for February, which adjusts the hourly earnings data from the employment report for inflation using the consumer price data published the same day; County Employment and Wages for the Third Quarter, and the Metropolitan Area Employment and Unemployment Summary for January…in addition, the Bureau of Economic Analysis reported that our current-account deficit shrunk to $81.12 billion in the 4th quarter of last year, it’s lowest level in more than 14 years, as our trade deficit on goods fell from $178.4 billion in the 3rd quarter to $171.8 billion in the 4th, our surplus on services increased  from $56.9 billion in the 3rd to $57.9 billion in the 4th quarter, and our surplus on income increased from $59.1 billion in the third to $64.4 billion in the 4th quarter, as receipts on U.S.-owned assets abroad increased to $204.5 billion from $195.9 billion and payments on foreign-owned assets in the US increased to $137.8 billion from $134.6 billion….

on Tuesday, the Census Bureau released it’s report on New Residential Construction for February (pdf), which you may recall is an inexact survey conducted by Census field agents that gives us a monthly estimate of new housing permits, starts and completions from a small sampling of sites and permit offices accessed….building permits were authorized at a seasonally adjusted annual rate of 1,018,000 housing units in February, which was “7.7 percent (±1.0%) above the revised January rate of 945,000″ and “6.9 percent (±1.2%) above” last February’s annualized rate of permit issuance….housing starts, which includes apartment units, were at a seasonally adjusted annual rate of 907,000, 2.0% (±12.1%)* below the revised January (annualized ) estimate of 909,000 and 6.4% (±9.9%)* below the February 2013 rate..note the asterisks indicate that Census does not have sufficiently accurate data to determine whether housing starts increased or decreased over the periods cited….based on data extrapolated from field reports, permits for 105,200 housing units were issued in February, 54,200 of which were for single family homes…similarly, the unadjusted monthly data on housing starts indicates an estimate of 62,400 units started, of which 40,100 were single family homes…

Existing Home Sales Slip to 19 Month Low in February

then on Thursday, the National Association of Realtors (NAR) reported on February Existing Home Sales, in which the ongoing slowdown in sales of existing homes was attributed to severe winter weather and higher prices caused by the tight inventory of homes available for sale…seasonally adjusted existing home sales fell 0.4% from an annual rate of 4.62 million in January to 4.60 million in February, a 19 month low, and 7.1% below the 4.95 million-unit annual rate homes were selling at last February…the median home price of homes sold in February was $189,000, 9.1% higher than a year earlier; with a $189,200 median for single family homes and a $187,900 median for condos and co-ops sold, while the average price of single family rose 7.1% to $236,900 and the average prices for co-ops and condos rose 9.4% to $240,400 (pdf source includes regional prices and sales)…it appears that a change in the mix of homes sold is a major factor in the average price increase, as distressed sales selling at a discount, ie, foreclosures and short sales, accounted for 16% of February sales, vis-a-vis 25% a year ago…the effect of this can be seen in the bar graph below, which is taken from an NAR graphics supplement (pdf) which shows that the number of homes selling below $100,000 has declined by 18.0% since last year, while homes selling for between $750,000 and a million and over $1 million have increased by 13.0% and 14.4% respectively over last February…

Feb 2014 existing home sales price brackets 2

all cash sales continue to be a major factor in home sales; according to the NAR, all-cash transactions accounted for 35% of February sales, up from 33% of sales in January and 32% of sales a year ago…other sources put the percentage of all-cash transactions higher; RealtyTrac reports that all cash sales accounted for 44.4% of all home sales in January, while Goldman Sachs put the percentage of all cash home deals as high as 60%; since major institutional investors are pulling back from home buying, this suggests that the increase in cash deals is driven by either wealthy individuals or foreign buyers, although reports of such are usually anecdotal…the NAR reports that first time home buyers accounted for 28% of home purchases in February, up from 26% in January, but still down from 30% a year earlier and below their normal participation above 40%…it’s widely assumed that student debt is having an impact on that; Freddie Mac reports that the average rate for a conventional 30-year fixed-rate mortgage fell to 4.30% in February, down from 4.43% in January, still low by historical standards despite being up from 3.53% a year earlier…

February Consumer Prices Increase 0.1% on Higher Rents, Meat and Fruit Prices

the Consumer Price Index for for All Urban Consumers (CPI-U) for Febraury indicated modest price changes for most everything except food as seasonally adjusted prices rose 0.1%, and the change in prices overall from a year earlier was just 1.13%…the unadjusted index itself, which is based on prices of 1982 through 1984 equal to 100.0, rose from 233.916 to 234.781…since energy prices were down while food prices were up in February, the core CPI, which is the index for all items except food and energy, was also up 0.1 in February, from 235.367 to 236.075, while the year over year change in core prices was essentially unchanged at 1.62%…

the seasonally adjusted energy index fell 0.5% in February after rising 0.6% in January and 1.6% in December, but was still down 2.5% over the preceding year…despite the fact that fuel oil rose 4.1% for the month, the energy commodities index was down 1.3% because prices for gasoline, which accounts for more than 90% of the index, fell 1.7% and was 8.1% lower than last February…prices for other fuel commodities, ie, propane, kerosene, and firewood rose 10.7% in February and were up 37.5% year over year …the price index for energy services rose 0.7% on a 3.6% increase for utility gas service while the cost of electricity fell 0.2%; in the year ending February, electricity prices rose 3.8% and natural gas prices rose 8.3%..

the seasonally adjusted food price index rose 0.4% in February as the food at home index rose 0.5% and the food away from home index rose 0.3%, as prices at full service restaurants rose 0.4%, fast food prices rose 0.2%, while meals at work and schools were 0.6% lower; for the year ending February, the food index had increased by 1.5% on a 0.9% uptick in the food at home index and a 2.2% increase in prices for food away from home….higher prices for meats and fruits, typically attributed to drought in California and Texas, were the primary driver of the higher food at home index…the meats, poultry, fish, and eggs index was up 1.2% on beef prices that were 4.0% higher, egg prices that rose 2.2%, and fish and seafood prices that were 0.9% higher than in January; for the year, meat prices rose 3.6%, poultry prices rose 2.5%, and egg prices were 5.7% higher…in addition, the fruit and vegetable index rose 1.1% in February but was still down 0.4% for the 12 month period highlighted here; driving the higher prices in February were a 3.4% increase in both apples and oranges and a 4.0% increase in other fresh fruits, while fresh vegetables fell 0.2% on 3.5% cheaper lettuce, while the processed fruits and vegetable index rose 0.5%…dairy products were also 0.7% higher in February, as cheese and related products were priced 1.6% higher, but the full year increases were less, at 0.6% for the dairy group and just 0.2% for cheese…meanwhile, the index for cereals and bakery products was 0.4% lower in February as breakfast cereals were priced 1.1% lower, the rice, pasta, & cornmeal group fell 0.9%, bread was 0.1% lower while prices for flour and mixes rose 1.6% and cookie prices rose 0.7%…prices for beverages were also modestly lower, by 0.3%, as juices fell 0.2% and roast coffee prices averaged 0.4% lower, while prices in the miscellaneous category of other foods at home rose 0.2% as pickles and relishes rose 2.8%, salad dressings rose 0.4%, peanut butter prices fell 0.5% and soups were priced 1.5% cheaper…on a year over year basis, only 2 food line items showed price changes greater than 10%; lettuce prices fell 20% while oranges were up 12.2% over a year earlier…

excluding food and energy, most of the seasonally adjusted price changes to core CPI components were modest in February, with a 0.2% increase in the major shelter index accounting for half the rise in the core price index, as both rent and owner’s equivalent rent rose by 0.2% and lodging away from home rose 0.6%….prices for apparel, on the other hand, were down 0.3% as women’s apparel fell 1.3%, women’s footware rose 2.1%, men’s apparel rose 1.2%, and prices for men’s footware fell 0.8%…meanwhile, the index for medical care rose 0.3%. as prices for medical care commodities rose 0.6% on prescription drug prices that were 0.9% higher while prices for personal medical equipment fell 0.4%, and the index for medical care services rose 0.2% as hospital services were 0.6% higher while physician’s services fell 0.1%…in addition, the index for transportation commodities not including fuel was unchanged as new cars and trucks prices that were 0.1% higher were offset by used car and truck that were down 0.1% and tire prices that were 0.3% lower, while prices for transportation services were up 0.3% on 0.5% higher car and truck leasing and a 1.2% hike in airline fares, while motor vehicle registration and license fees were unchanged and prices for other intercity transportation fell 1.2%…. also, the recreation price index was up 0.1% as recreation commodities were unchanged as 0.9% lower TV prices and a 4.1% drop in prices for photographic equipment were offset by 1.2% higher prices for audio equipment and toy and bicycle prices that were 0.7% higher, while recreation services rose 0.1% as pet services rose 0.4%, admission to sporting events rose 1.0% and rental of video and audio discs and other media fell 0.8%…and lastly, the education and communication index was also up 0.1% as education and communication commodities fell 0.5% on 2.2% lower prices for telephone hardware and similar consumer information items. while textbooks and school supplies were priced 0.9% higher; then education and communication services were 0.2% higher on 2.4% higher postage and delivery services and 0.7% higher tuition, while prices for telephone services fell 0.4%…on a year over year basis, only two line items among CPI components showed price changes greater than 10%; video disc and similar media services have declined by 11.8%, and televisions are 12.6% cheaper than they were a year earlier…

the screenshot of our new FRED graph below shows the monthly change in each of the major component indexes of the CPI since January 2000, with all of the indexes reset to the beginning of the recession of March 2001; admittedly, that’s odd, but at the present time FRED is refusing to save graphs reformatted to observation dates other than from the beginning and end of a recession (i have already complained)…as you may recall, we’ve formatted CPI graphs similarly in the past in order to compare the price growth of each of these components over time, and because a few of there indexes were created based on 1997 prices = 100 while the rest are 1982-84 prices = 100, we’ve remarked them all to the same date to make for an apples to apples comparison…so in blue, we have the relative track of the price index for food and beverages; in red, we have the reset price index for housing, which includes rent, homeowners equivalent rent, utilities, insurance & everything to do with household operations; in violet, we have the price changes for apparel, which is obviously the only index to show a net price decline over the decade; meanwhile, changes in the volatile transportation price index, in brown, are showing the impact of gas prices on the cost of transportation, while the relative change in the index for medical care in orange has obviously risen the most over the period…next, the price changes for education and communication are tracked in dark green, and our last reset index, in bright green, is for recreation prices…(see larger interactive version of this chart at FRED, which should allow for comparisons of all indexes shown below as of any given date, and which will also allow one to view the same price chart beginning at any date after 1948)

Feb 2014 CPI reset to 2001

Industrial Production Up 0.6% in February, Rebounding from January Downturn

for February industrial production, the surprising weakness that was seen when January’s data disappointed with a downturn was more than reversed with a 0.6% increase in February, as the Fed’s G17 report on Industrial production and Capacity Utilization for the month showed that the seasonally adjusted industrial composite index for all industry, which was set in 2007 equal to 100.0, rose to 101.6 in February from 101.0 in January; although it was occasionally reported that January’s change was revised upward to a 0.2% decline, this occurred because the December index was revised down from 101.4 to 101.2; January’s index remained unchanged…combining that with a similar revision to November in the opposite direction left the industrial production for all industry 2.8% above it’s level of a year earlier…the manufacturing index, which accounts for three-fourths of total production, rose 0.8%, from 96.4 to 97.2, which, when combined with the revision to January, left it at the same level as in December and 1.5% above the year earlier reading…the mining index, which includes gas and oil production, rose 0.3%, from 122.8 to 123.2, bringing its year over year increase to 6.1%….and while the utility index fell 0.2%, from 107.2 in January to 107.0 in February, it was still 3.6 above the December level of 103.4, and 8.3% above a year earlier…since these seasonally adjusted readings for January and February represent utility usage above the seasonal norms, we can expect this index to retreat when temperatures return to a more seasonal level…

in addition to the breakdown of industrial production into its three industry groups, this release also reports on industrial production by market group…among final products and nonindustrial supplies, which accounted for 53.22% of industrial output in 2013, February production of consumer goods rose 0.8% after falling 0.5% in January, as seasonally adjusted production of durable goods rebounded from a 2.7% downturn to a show a 2.1% increase; that was in turn driven by a 4.6% increase in production of automotive products, which were rebounding from a 5.1% pullback in January that was said to be weather related; production of durable appliances, furniture and carpeting, however, fell 1.7% in February after falling 0.4% in January…for the 12 months ending February, durable goods production rose 4.6% on a 6.9% increase in production of automotive products, while home electronics production rose 2.5%, production of appliances, furniture and carpeting rose 4.9%, and production of miscellaneous durable goods rose 1.1% from February 2013 to February this year…production of non-durable goods, meanwhile, rose 0.5% in February after rising 0.1% in January and was 2.0% ahead of last year’s output; among non-energy non-durable categories, food and tobacco production rose 1.0% in February after falling 0.7% in January but still remained 1.0% below the year earlier output; clothing production fell 0.7% after falling 0.6% previously but was still 1.2% ahead of last years pace, in addition, output of paper products increased 1.1% in February after falling 1.2% in January and was now off 2.7% in the year ending with this report, while output of chemical products rose 0.9% in February and 2.1% for the year…meanwhile, output of energy, also included in non-durable totals, fell 0.8% in February after rising 2.3% in January and was now 8.4% higher than last February…

production of business equipment rose 1.3% in February after being down three out of the previous four months; production of transit equipment rose by 2.0% after falling 1.6% in January, while production of industrial equipment rose 1.6%, and production of information processing equipment fell 0.1%…since last February, production of business equipment has risen 2.8%, with production of transit equipment up 3.8%, production of industrial equipment up 2.1%, and production of information processing equipment up 2.1% from a year earlier…in addition, production of defense and space equipment rose 0.2% In February, which was 2.6% higher than a year earlier, and production of construction supplies rose 0.2%, but were only up 0.1% year over year, while output of business supplies rose 0.7% and posted a year over year growth rate of 3.1%…both supply indexes remain well below the 2007 level of 100.0 with the construction supply index at 82.9 and the business supply index at 93.7…..meanwhile, production of raw and intermediate materials that would input into other production processes rose 0.4% and were up 3.2% for the year ending February…

as we would expect with a sizable increase in production, the capacity utilization rate for all industry, expressed as the percentage of our plant and equipment that was in use during the month, also rose, from 78.5% in January to 78.8% in February; which is up from our capacity utilization rate of 78.1 in February of 2013…capacity utilization by all manufacturers rose from 75.9% to 76.4%, with the operating rate for NAICS classified durable goods manufacturers at 76.6% and capacity utilization by NAICS classified manufacturers of non-durables at 77.6%…among the durable goods manufactures, both makers of machinery at 82.5% and manufacturers of fabricated metal products at 87.5% saw their operating rates rise by 1.0% in February, while among the non-durable goods manufacturers, the operating rate for the paper products industry rose from 81.2% to 82.0%…meanwhile, capacity utilization by the ‘mining’ industry slipped 0.1%, from 89.2% to 89.1%, which given their higher production, suggests that oil and gas rig counts probably rose during the month; while the operating rate for utilities fell from 83.5% to 83.3%…

a screenshot of our FRED graph for this report below shows the seasonally adjusted industrial production index for all industry in black, the manufacturing production index in blue, the utility production index in green, and the mining production index in red from the beginning of the index year of 2007, at which time they were all benchmarked to equal 100.0; also shown below is the track of capacity utilization for total industry since 2007 in pink; note that it’s a percentage, rather than an index number like the other metrics we’re tracking on the same graph…(you should also be able to click to view interactive graph

Feb 2014 industrial production

(the above is the commentary that accompanied my regular sunday morning links emailing, synopses which in turn were mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)