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May 07, 2021
Global semiconductor sales returned to form in March. After sales declined in two of the past three months, global semiconductor sales surged 3.6% in March to $41.1 billion. All four sales regions registered an increase on the month with Europe recording the largest monthly increase at 5.7%. The industry is performing well on a year-ago basis as sales expanded an impressive 9.2% from March 2020.
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May 07, 2021
The seasonally adjusted Ivey Purchasing Managers' Index fell in April to 60.6 from 72.9 in March. The reading is still signaling expansion, though at a slower pace than last month. The index came in at 22.8 in April 2020, right in the midst of major pandemic stress. Of the four detailed measures, only the Ivey suppliers index was below 50 in March.
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May 07, 2021
Mortgage delinquency rates dropped 35 basis points to 6.38% in the first quarter of 2021, according to the Mortgage Bankers Association's survey. Although this marks three straight quarters of decreases, the total delinquency rate is still 202 basis points above where it was at this point last year. Conventional loans saw a decrease in their delinquency rate while Veterans Affairs and Federal Housing Administration loans both saw increases.
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May 07, 2021
Wholesale inventories expanded 1.3% in March, following an upwardly revised 1% increase in February. Durable goods stockpiles grew 1.2% while nondurable goods inventories increased 1.4%. Wholesale sales jumped 4.6% in March, and February data were revised up to show no change from January (previously -0.8%). The strong bounce in wholesale sales offset the inventory build, pulling the inventory-to-sales ratio down to 1.22 from 1.26.
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May 07, 2021
Payroll employment was far weaker in April than expected. The Bureau of Labor Statistics reports that 266,000 net new jobs were added—one-third of our expectation—while the unemployment rate edged up to 6.1%. Moreover, March's figure was revised down to 770,000 from the 916,000 reported last month. Goods producers, retailers, transportation/warehousing and temp help all shed jobs. Chip shortages have resulted in declines in auto manufacturing, especially.
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May 07, 2021
The U.S. economy has a lot of momentum heading into this quarter because of the fiscal stimulus and weather-related bounce in March. Our estimate of real monthly GDP increased 2.4% in March after falling a revised 2.1% in February (previously 0.9%). Monthly GDP in February was hurt more than previously thought by winter storms that swept across a good portion of the country. The gain in mark, leaves monthly GDP up 5.5% on a year-ago basis in March. This is misleading because of easy base effects. Last March was when the pandemic was intensifying. Our estimate of monthly GDP is consistent with the government's advance estimate of first quarter GDP, which showed a 6.4% annualized increase.
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May 06, 2021
U.S. initial claims for unemployment insurance are signaling optimism for the labor market. New filings fell from an upwardly revised 590,000 to 498,000 in the week ended May 1, posting the lowest total since the pandemic began and besting consensus expectations for a more modest decline. Continuing claims barely budged, rising from 3.653 million to 3.69 million in the week ended April 24. The number of those filing for Pandemic Unemployment Assistance dropped by about 20,000 in the week ended May 1 to 101,214, the lowest total since these benefits were first introduced in April 2020. Total initial claims are now around 600,000, by far the lowest level since the pandemic began, providing additional evidence that the labor market is gaining momentum.
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May 06, 2021
Job cut announcements fell to 22,913 in April, marking the third decline in a row and falling to their lowest level since 2000. Entertainment/leisure, insurance and telecommunications accounted for the majority of the decline in job cuts. The decrease in layoff announcements was fairly concentrated for being so strong; only 14 of the 30 industries tracked by Challenger, Gray & Christmas Inc. saw job cut announcements decrease from March to April.
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May 05, 2021
A much larger than expected decline in oil inventories will support oil prices. Commercial crude oil inventories fell by 8 million barrels in the week ended April 30, handily beating consensus expectations of a 2.6 million-barrel decline. Gasoline inventories rose by 737,000 barrels, contrary to analyst expectations that stocks would fall by 451,000 barrels. Distillate inventories fell by 2.9 million barrels, much more than analyst predictions of a 168,000-barrel draw. Refinery capacity utilization rose to 86.5% from the prior week's 85.4%. Over the last four weeks, total U.S. oil demand was 34.2% higher than in the same period last year.
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May 05, 2021
The U.S. services activity expanded in April, albeit at a less frenetic pace than in March. The ISM nonmanufacturing survey's composite index slipped from an all-time high of 63.7 in March to 62.7, a touch lower than forecast. The details to the report highlight ongoing supply chain disruptions. Supplier deliveries were meaningfully slower, while inventories entered into contractionary territory. Business activity and new orders were a drag on the top-line index because of production-capacity constraints. On the bright side, employment was supportive of the overall index. All told, the nonmanufacturing segment of the economy is expanding into the spring and will benefit once U.S. consumers reach near-normalcy this summer.
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May 05, 2021
The labor market is off and running. In April, private sector payrolls grew by 742,000 on net—a continued acceleration of growth and the strongest reading since September. Private sector payrolls are still more than 8 million jobs short of pre-COVID-19 levels, but job gains have totaled 1.3 million over the last two months after adding only about 1 million jobs in the five months prior. Goods producers posted another solid gain in April, adding 106,000 jobs to go with the 98,000 added in March. Service providers continue to do most of the heavy lifting, adding 636,000 positions in April.
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May 04, 2021
The nominal trade deficit widened to $74.4 billion in March, fueled by rising goods imports. The U.S. trade deficit did not yawn as much as we projected but came in on par with the consensus expectation. February's trade deficit was revised narrower by about $600 million. The trade deficit in services remained stable around $17.1 billion.
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May 04, 2021
The booming pace of new residential construction shows no signs of abating, yet the nonresidential sector's struggles continue. Total building permits rose 5.7% in March from the prior month, reflecting a 15.9% increase on the residential side and a 15.6% decline in intentions for new nonresidential structures. Year-over-year comparisons have become skewed as the base period now marks the start of the pandemic. Still, residential permits have increased 69.8% from the prior year while nonresidential permits have mounted little to no recovery, up 2.2%. The pandemic-induced shifts in the housing market and construction industry will begin to reverse until interest rates start rising and vaccines allow social activities to return to normal.
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May 04, 2021
In March, Canada's merchandise exports increased slightly by 0.3%. Meanwhile, imports pushed higher by 5.5%. Canada's trade balance subsequently moved from a surplus of C$1.4 billion in February to a deficit of C$1.1 billion in March.
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May 04, 2021
U.S. new-vehicle sales put the pedal to the metal for the second month in a row. With 18.5 million annualized units sold, April 2021 is the strongest April sales in the history of the U.S auto market and the highest of any month since July 2005. Total light vehicles sold represent a monthly increase of 3.1% and were 112.2% above the pandemic-ravaged totals of April 2020. Sales of both passenger cars and light trucks remained strong. Seasonally adjusted annualized unit sales of light trucks and SUVs increased by 2.4% from March and were 21.9% above April 2019. Passenger car sales rose month over month, increasing 5.3% from March. Car sales beat last April's numbers by 109.4% but were 14% below April 2019 as consumers continue to shift towards larger vehicles.
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May 04, 2021
The CoreLogic Home Price Index rose 2% in March from the previous month and 11.3% year over year. Year-ago house price appreciation has accelerated to the fastest pace since 2006 because housing supply is limited and demand is being boosted by historically low mortgage rates.
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May 03, 2021
U.S. construction spending increased just 0.2% in March, well below the consensus expectation of a 2% increase. While residential outlays increased 1.7%, the top-line figure was weighed down by a 1.1% decrease in nonresidential spending. Public construction also declined, by 1.5%, and sits 4.6% below its March 2020 level. U.S. construction spending is up 5.3% over the past year thanks to the red-hot housing sector masking weakness elsewhere.
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May 03, 2021
The ISM manufacturing survey unexpectedly fell in April, but it remains elevated and the outlook is favorable for factory conditions this quarter. The ISM manufacturing index fell from 64.7 in March to 60.7 in April. Across the board, the details were less impressive than in March. New orders fell from 68 to 64.3 while production dropped from 68.1 to 62.5. The employment index also fell. Supplier deliveries slipped but are still high and will likely remain this way for the next several months. The prices-paid index rose from 85.6 to 89.6 as the number of commodities noted as up in price and/or in short supply continues to grow.
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Apr 30, 2021
The rally in agricultural prices strengthened in March. The Agricultural Prices Received Index increased 2.6% from February to 98.3, which was 6.4% higher than a year earlier. The crop production index was up 1.2% from February and 14% year over year. The livestock production index rose 4.1% over the month, putting it 0.2% higher than a year earlier. The prices paid index rose to 111.7 in March, 0.8% higher than in February and 1.9% higher than a year earlier.
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Apr 30, 2021
Producer prices continued their steady climb higher in March. The Industrial Product Price Index rose 1.6% compared with February and was up 10% over the previous year. Excluding volatile energy and petroleum product prices, the IPPI was up 1.3%, with 14 of the 21 constituent commodity groups seeing higher prices. The Raw Materials Price Index rose 2.3% and was up 34.7% over the previous year.
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Apr 30, 2021
Many factors came together to lift spending in March. The final, largest round of stimulus checks were largely distributed, weather improved, and the stock market gained ground. Real spending surged 3.6%, the third largest gain in history, after falling 1.2% (unrevised) in February and growing 3.1% (previously 3%) in January. Real spending topped its pre-pandemic level for the first time. Goods spending led the increase, rising 7.3%. Durable goods spending jumped 10.3% and nondurable goods grew 5.6%. Service spending rose 1.7%. Prices increased 0.5%, and nominal spending surged 4.2% after rounding. The saving rate soared to 27.6% from an upwardly revised 13.9% as income was lifted by stimulus checks. That was the second highest saving on record, following last April.
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Apr 27, 2021
The four-week moving average in our U.S. policy uncertainty index fell from 376.8 to 376.3 in the week ended April 23. Fiscal policy uncertainty is declining but remains elevated. Though President Biden has signed the $1.9 trillion fiscal rescue package, attention is shifting toward an infrastructure package and corporate tax rates. The Fed's new forward guidance hasn't impacted uncertainty about monetary policy, which remains fairly low.
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Apr 26, 2021
Texas factory activity continued to show strong growth in April. Though some current component indicators such as production and capacity utilization eased from their March highs, just about all continued to show high double-digit positive margins. Future conditions indicators, which are customarily strong, were even higher than usual.
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Apr 19, 2021
Elevated house prices are motivating builders to push ahead with new construction at a record pace. Canadian housing starts rose to 335,200 annualized units, a gain of 21.6% from 275,567 units in February. The multifamily side led the way with a gain of 33.8% while single-family increased by 3.6%. The six-month moving average, Canada Mortgage & Housing Corp.'s preferred trend measure, was 273,664, up from 252,636 in February.
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Apr 05, 2021
The consumer credit market expanded in March 2021, increasing by $41 billion, a 0.29% month-to-month change. The consumer credit market is now $14.2 trillion in outstanding debt and is 4.13% higher than where it was last year. One year into the pandemic, we have witnessed dramatic changes in balance growth and loan performance, with some types of loans seeing growth unchanged, while others have seen their outstanding balance plummet. Performance continues to improve across all loan categories.
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Apr 02, 2021
The U.S. recovery is keeping up its impressive pace. The Moody's Analytics & CNN Business Back-to-Normal Index notched another record high this week, climbing to 87.1. This marks a 0.6-point increase from the week before. The U.S. index ends March 4.3 points higher than it began. Eleven states saw their indexes tick down this week, while the rest posted gains. Consumers, hurrying back to long-suppressed in-person activities, are driving the strong weekly gains.
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Mar 26, 2021
Household financial burdens increased again in the fourth quarter as incomes continued to fall. Disposable income fell 8.8% at an annual rate in the quarter while debt payments and obligations rose at their fastest pace in a year. The financial obligations rose 39 basis points to 14.71%. The third quarter was revised up from 14.27% to 14.32%. The debt service ratio rose 25 basis points to 9.41% from its prior level, which was revised up 3 basis points. The mortgage debt service ratio rose almost as much as the consumer ratio.
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Mar 26, 2021
U.S. net exports will likely be a drag on first-quarter GDP growth. The advance nominal goods deficit widened from $84.6 billion in January to $86.7 billion in February, a little wider than we expected. Nominal goods exports dropped 3.8% in and the weakness was fairly broad-based. Imports also declined, falling 1.4%. A standout is automotive vehicle imports and exports, which were down 19.7% and 5.9%, respectively. Similar to the drops in automotive vehicle industrial production and durable goods orders, the weakness is likely attributed to the global semiconductor shortage.
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Mar 26, 2021
Wholesale trade inventories gained 0.5% in February. This represents a slowdown from January's revised 1.4% increase. Durable goods stockpiles rose 0.2%, while nondurables increased 0.8%. Retail inventories were unchanged. Excluding motor vehicles and parts, retail inventories grew by 1.2%.
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Mar 26, 2021
In line with our forecast, nominal personal income contracted 7.1% from January to February. January's data were juiced by the disbursement of funds from the Coronavirus Response and Relief Supplemental Appropriations Act, which passed in late December. That fading support caused government transfers to drop by 27.4% in February and is chiefly responsible for the overall decline. Compensation of employees held flat. The personal saving rate fell from 19.8% to 13.6% in February, similar to December's rate.
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Mar 26, 2021
U.S. inflationary pressures will develop in the first half of the year, but this is attributable to transitory factors, and the implications for monetary policy are minimal. The headline PCE deflator rose 0.2% in February, a touch weaker than either we or the consensus anticipated. The increase in February follows a 0.3% gain in January and 0.4% rise in December. Food prices increased 0.2% after falling 0.1% in January. Energy prices were up 3.8%, the second consecutive monthly gain in excess of 3%. Excluding food and energy, the PCE deflator rose 0.1%, leaving it up 1.4% on a year-ago basis. The year-over-year comparisons get messy beginning in March.
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Mar 24, 2021
Mortgage applications fell by 2.5% in the week of March 19, after decreasing by 2.2%. The purchase index was up 2.6%, but the 5.1% decline in the refinance index outweighed it. Applications are falling again as contract rates continue their upward trend. This has been affecting refinancing acutely, but as is clear in the week's release, demand for purchasing mortgages is holding up. Despite the increase in recent weeks, contract rates are historically low; moreover, the pandemic is still driving up demand for low-density housing. As a result, demand for new housing will persist this year. When rates stabilize, we expect applications for new mortgages to rise further in 2021, though the pace will slow considerably from last year's frenzy.
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Mar 22, 2021
Global business sentiment turned positive last week on a four-week moving average basis for the first time in a year. Responses to all nine questions in the survey are improving, except for the demand for office space. More than one-third of respondents say that current business conditions are getting better, which is the highest percentage of respondents since before the pandemic a year ago. Businesses are also more upbeat about the economy's prospects later this summer and hiring and investment intentions remain firmly positive. Business sentiment is strongest in the Asia-Pacific region and weakest in North America.
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Mar 16, 2021
The Moody's Delinquency Tracker total delinquency rate plunged 28 basis points in February to 7.31%. The large decline is because of loan modifications and forbearance agreements offsetting newly delinquent loans. All property types experienced a decline in their delinquency rate. Meanwhile, all regional delinquency rates decreased except for that of the East.
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Mar 15, 2021
The January job numbers for state and regional economies showed that the labor market was off to a positive start in the new year. Jobless rates were lower in 33 states and the District of Columbia, up from 19 in December, and stable in 17 states. Compared with December, more states reported that employment rose and significantly fewer reported a decline. The largest over-the-month job gains occurred in Minnesota, New York and Pennsylvania. Jobless claims are still stubbornly high, but the recent passage of the American Rescue Plan Act and the diminishing threat from COVID-19 will juice activity this spring. ** Data table and chart will be posted soon.**
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