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May 22, 2019
The Moody's Delinquency Tracker total delinquency rate for commercial mortgage-backed securities declined 10 basis points to 3.53% in April. The decrease in delinquencies stemmed mainly from retail for the month. Three of the six property types declined, two held steady and one inched upward. Additionally, all regional delinquency rates, except the East, fell in April. Meanwhile, payoffs and dispositions outweighed new issuance in the month, decreasing the total balance of CMBS conduit loans.
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May 13, 2019
President Trump's escalation of the trade war with China did not damage global business sentiment, at least according to last week's business survey results. Global sentiment is soft but has stabilized in recent weeks, consistent with a global economy that is growing below its potential. Of course, this bears close watching the longer it takes for the U.S. and China to come to some arrangement and end the tit-for-tat tariff increases.
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Apr 15, 2019
New-vehicle sales are improving heading into the important spring sales season. Unit sales of new automobiles increased from 111,917 to 124,058 in February on an unadjusted basis. The monthly gain narrowed the year-over-year decline from 6.9% to 3.3%. In dollar terms, new-vehicle sales have fallen only slightly from a year earlier, down 0.2%. Positive results for the truck segment are offsetting steep losses in passenger vehicle sales.
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Apr 11, 2019
For the first time in 12 months, U.S. household borrowing experienced a decrease in balances. Every lending category except first mortgage and student loans contracted in March. Bankcard and retail cards both continued their seasonal decrease this month. Total dollar delinquency rate declined by 0.18% to 2.44% while write-offs and bankruptcies maintained at 0.1%.
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Apr 10, 2019
The federal government has incurred a cumulative budget deficit of $691.2 billion in the first half of fiscal 2019, compared with $599.7 billion over the same period last fiscal year. The federal government ran a budget deficit of $146.9 billion in March, less than the $208.7 billion shortfall in March 2018. Federal revenues increased by 8.5% on a year-ago basis to $228.8 billion thanks to gains in individual income and employment taxes. Meanwhile, spending fell by 10.4% to $375.8 billion because of notable year-over-year declines in Medicare, Veterans Affairs and income security expenditures.
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Apr 10, 2019
The March consumer price index won't cause the Federal Reserve to be less dovish, but it does suggest that the bond market's increased bets on a rate cut late this year or early next are premature and overdone. The CPI increased 0.4% in March, compared with 0.2% in February. The increase was in line with our forecast and driven by higher energy prices. The CPI for energy was up 3.5% following a 0.4% gain in February. Food prices were up 0.3%, in line with the average increase over the prior three months. The core CPI came in light, rising 0.1%. There was a sizable drop in apparel prices, as the Bureau of Labor Statistics incorporated new source data. On a year-ago basis, the headline and core CPIs were up 1.9% and 2%, respectively.
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Apr 10, 2019
The top-line market index fell 5.6% in the week ending April 5. This contraction relative to the previous week was entirely due to refinancing activity falling back to Earth. The four-week moving averages for purchasing and refinancing were positive and showed the strongest gains since early February despite the fall in the top-line number. Purchase applications have risen 10.6% over the past four weeks—the fourth consecutive gain in the moving average. Refinancing applications have increased 30.8% over the same period, with positive base effects helping build on the previous week's 22.6% gain in the average. In terms of one-week changes, the purchases index moved up 0.5% while the refinancing index dropped 11.4%.
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Apr 10, 2019
Higher energy prices boosted global inflation in March, but the monetary implications for central banks in developed economies are not significant. Energy prices normally have a transitory effect on inflation in developed economies, and therefore the dovish shift by many central banks is unlikely to change soon. Our global CPI rose 0.5% in March following a 0.3% increase in each of the prior two months. The CPI in developed economies was up 0.3% in March following a 0.2% gain in February. The CPI in developing economies increased 0.6% after rising 0.4% in each of the prior two months. On a year-ago basis, the global CPI was up 5.2% in March, the strongest since October.
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Apr 09, 2019
The four-week moving average in our U.S. policy uncertainty index hasn't budged recently, as it came in at 128.9 in the week ended April 5. Still, policy uncertainty remains higher than normal. Fiscal policy is boosting uncertainty, but there is more uncertainty surrounding monetary policy. Financial markets have significantly repriced expectations given the past tightening in financial market conditions. Fed funds futures markets are betting on a rate cut late this year or early next.
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Apr 09, 2019
The NFIB Small Business Optimism Index inched higher in March, rising from 101.7 to 101.8, still among the lowest since November 2016. The details were a little better than in February. Hiring plans edged higher but remain below that seen toward the end of last year. Plans to raise worker compensation also increased in March, consistent with other evidence that suggests some further, but gradual, acceleration in nominal wage growth. Expectations for the economy to improve were unchanged in March. All told, small-business confidence held up better than some of the other measures of business sentiment we closely track. Business sentiment should improve, as financial market conditions have eased, and we look for growth to accelerate.
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Apr 08, 2019
Global economic growth is slowing, but we are not signaling warning bells just yet. The composite leading indicator for OECD countries continued its slide, declining from a revised 99.2 in January (previously 99.1) to 99.1 in February. The U.S. headline index likewise slipped, dropping from 99.2 to 99.1 over the month. The euro zone similarly weakened, with Germany dropping 0.2 point to 99.2. Among developing economies, Mexico and Brazil logged steady increases, while China, India and Russia were unchanged.
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Mar 27, 2019
The first increase in exports since July 2018 drove a decline in Canada's merchandise trade deficit. Exports increased by 2.9% in January, and imports rose by 1.5%. As a result, the merchandise trade deficit narrowed to C$4.2 billion from C$4.8 billion December.
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Mar 06, 2019
The nominal trade deficit widened to its highest level in a decade in December as the softening global economy and ongoing trade war took a toll. Net exports fell $9.5 billion from November, placing the goods and services deficit at $59.8 billion. The goods deficit increased $9 billion, while the services surplus declined $483 million. Total nominal exports fell 1.9% from November, while total nominal imports increased 2.1%.
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Mar 04, 2019
U.S. construction spending declined 0.6% in December, falling well below the consensus estimate of a 0.2% increase. Residential spending drove the decrease in total construction spending, falling 1.4%. Total public construction also fell 0.6%. Of the largest components, public spending decreased the most in healthcare, highway and street, and sewage and waste disposal construction. Private construction spending also decreased by 0.6% but finished the year up 0.8%. Despite the pullback, total construction spending remains elevated and is 1.6% higher than its December 2017 level.
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Mar 04, 2019
Despite a sixth consecutive decline in the top-line current business conditions index, New York City purchasing managers provided plenty of reason for hope in February. Although the current conditions index in the ISM-New York Report on Business fell from 63.4 to 61.1, its components generally moved in a positive direction, with demand and labor indicators rising and growth in prices paid slowing. The six-month outlook surged back to its fall 2018 levels in rising more than 13 points to 71.5, but expected demand cooled a bit.
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Mar 01, 2019
U.S. inflation continues to flirt with the Federal Reserve's 2% objective but this isn't sufficient to quiet the central bank's dovish tone. Inflation will need to accelerate and inflation expectations move higher for the Fed to considering raising interest rates and this is unlikely to occur soon. The headline PCE deflator rose 0.1% in December, a little stronger than our forecast. Excluding food and energy, the PCE deflator was up 0.2%, in line with our forecast. On a year-ago basis, the headline and core PCE deflators rose 1.7% and 1.9%, respectively. Overall, we see the risks of inflation falling below the Fed's objective in the first half of next year as high. Therefore, our subjective odds for a rate hike in the first half of this year has fallen recently.
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Mar 01, 2019
Canadian GDP took another small step back in December. GDP dipped 0.1% in December, following an identical decline in the previous month. Output fell in 13 of 20 industries. Goods producers fell 0.7%, while services producers ticked 0.2% higher.
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Feb 28, 2019
The agricultural prices received index started the year off on the wrong foot, falling 4.5% in January due to a sharp decline in the crop production index. At 84.9, the prices received index is down 0.7% from a year earlier. The crop production index declined 10.8% in January and is down 1.7% from a year earlier. The livestock production index increased 6.4%, putting it 3.6% above the level in January 2018.
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Feb 28, 2019
The homeownership rate continues to move up, coming in at 64.8% in the fourth quarter of 2018, compared with 64.4% in the third quarter. Although quarterly changes have generally not been statistically significant, the underlying trend over the last two years has been a clear recovery from the historical decline that occurred in the decade through 2016. The rental vacancy rate ticked down to 6.6% from 7.1% in the third quarter, and the homeowner vacancy rate ticked down to 1.5% from 1.6%.
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Feb 28, 2019
The industrial product price index fell in January for a third consecutive month. The index was 0.3% lower, mainly because of lower prices for energy and petroleum products. Of the 21 major commodity groups, 12 were lower. The raw materials price index rose 3.8%, driven largely by crude energy product prices.
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Feb 27, 2019
Stockpiles expanded at the end of the fourth quarter. According to the advance estimate, wholesale stockpiles rose 1.1% in December after a revised 0.4% gain in November. Retailers advanced 0.9% following a 0.4% decline in November. Auto inventories rose 0.7%, while retailers excluding autos rose 1%.
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Feb 26, 2019
Consumer confidence rebounded in February, rising to 131.4, a three-month high, gaining 9.7 points over the January report on top of a 1.5-point upward revision. Present conditions were viewed more favorably, gaining 3.3 points over a modest upward revision, improving to 173.5, a post-2000 record. Consumers also shook off the pessimism in expectations, with that index rising 14 points after last month's drop, rising to 103.4.
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Feb 26, 2019
Existing-home price appreciation slowed in the three months to December compared with the same period in November, reinforcing the decelerating trend that has been ongoing since spring 2018. Year-ago growth in the 20-city composite index fell to 4.2% in December, down from 4.6% in November. Year-ago growth in the 10-city composite index decreased to 3.8% in the three months ending in December, down from 4.2% in the three months to November. Growth in the national house price index dropped to 4.7% in December, below the 5.1% pace of appreciation in November.
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Feb 25, 2019
Texas factory activity continued to rise in February. Although the pace of current production decelerated, respondents' outlooks for both their own companies and the economy as a whole brightened. Uncertainty over near-term prospects diminished significantly. Expectations for growth six months from now remained optimistic.
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Jan 31, 2019
New single-family home sales jumped up in November, increasing 16.9% on a monthly basis. Sales came in well above Moody's Analytics and consensus forecast expectations. Even so, totals are still 7.7% below year-ago levels. Sales increased in all census regions but the West in November. Additionally, the median new-home price fell this month and remains well below year-ago levels.
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Jan 30, 2019
The Canadian labor market improved slightly in November. Average weekly earnings of nonfarm employees rose 0.3% to C$1,012, and year-ago growth slowed to 2%. The number of nonfarm employees rose 8,600 from October. The average workweek ticked up to 32.8 hours.
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Jan 11, 2019
The California Composite Index, measuring overall manufacturing activity, decreased from 65 in the fourth quarter of 2018 to 61.2 in the first quarter of 2019. California manufacturers are still expecting economic expansion, but at a slowing rate. The production, employment, new orders and commodity price components all decreased in the first quarter.
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Jan 08, 2019
Household financial burdens are low and inching lower. The financial obligations ratio fell 3 basis points to 15.29% in the third quarter. It was down 21 basis points over the preceding year, with the drop amplified by the jump in disposable income cause by tax cuts in the first quarter. The debt service ratio fell 2 basis points to 9.82% from its prior level to a record low. It is down 15 basis points over the last year. The drop came from the mortgage ratio. The consumer debt service ratio was unchanged.
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