1)Initial claims fell to 348k from 377k last week and that is 16k less than expected. Those filing for PUA rose by almost 6k to 109k. Continuing claims totaled 2.82mm from 2.90mm in the week prior and that is a fresh post covid low but was 20k more than expected. Delayed by two weeks, continuing PUA rose by 57k to 4.88mm but after a good decline in the prior two weeks. Those still getting emergency claims fell another 66k to 3.79mm.
2)US industrial production in July rose by .9% m/o/m, above the .5% estimate but partly given back with a 2 tenths downward revision to June. Manufacturing rebounded by 1.4% m/o/m after a .3% drop in June but just think what it could be doing if supplies were available. Capacity utilization rose to 76.1% from 75.4%.
3)After net foreign selling of US Treasury notes and bonds of $93.4b was seen in May, foreigners bought back a net $10.9b in June. That leaves the year to date total of net selling at $28.5b. With respect to Japan, the largest holder, they were net sellers of notes and bonds for the 3rd straight month, totaling $37.4b over this time frame. China sold almost $9b worth in June.
4)Japan said its July CPI fell .3% y/o/y at the headline level, one tenth more than expected and down .6% ex food and energy, two tenths above the estimate. All of this was due to the 40% drop in mobile phone fees and also a change in the base year.
5)Australia said employment rose by 2.2k in July, well better than the estimate of down 43.1k. A modest gain in part time offset a small fall in full time. Their unemployment rate fell down to 4.6% from 4.9% but in part due to a drop in the participation rate likely due to the selective lockdowns.
6)Singapore’s non oil domestic exports rose by 12.7% y/o/y, a bit better than the estimate of up 12%. Versus June, they were lower by .9% but after a 6% increase and above the estimate of down 1.7%.
7)Consumer prices in the UK in July was flat m/o/m after a .5% increase in June. That was 2 tenths less than expected and it slowed the y/o/y gain to 2% from 2.5%. The ONS said there was a slowdown in the price gains in clothing, footwear and computers/games and toys. Part of this moderation is comps as clothing/footwear prices didn’t fall last summer as much as they typically do. Because of last year’s shutdowns, the prices for computers/games and toys didn’t fall, also setting up for tougher comp this year. Finally, there were tough comps in the hospitality sector because last July everything reopened.
8)Freedom Day in the UK was July 19th and in that month jobless claims fell by 7.8k after a huge 136k person decline in June (revised down from 115k). Dated data from the 3 months ended June saw an employment increase of 95k, about as expected and the unemployment rate ticked down by one tenth to just 4.7%. Weekly earnings were robust, rising by 7.4% y/o/y ex bonuses. There are employee shortages in the UK too.
9)”Let there be songs to fill the air” tonight at Citi Field, //twitter.com/deadandcompany/status/1428753988896366599
1)The Fed might be getting closer to tapering but not before they are intent on continuing to jam its balance sheet higher. It grew by $85.4b on the week to another record high of $8.34 Trillion.
2)Core retail sales in July, a month that saw the cost of living rise .5% from June as measured by CPI, fell 1% m/o/m. That was 8 tenths worse than expected, somewhat offset by the 3 tenths upward revision to June. So, on an inflation adjusted basis, core retail sales fell by 1.5% in July from June.
3)The August NY manufacturing index fell to 18.3 from 43 in July and 17.4 in June. That is 10 pts below expectations. Smoothing out the monthly volatile in this data point, the 6 months average is 24.5. Prices paid fell .7 pts but at 76.1 remains very high and in line with the 6 month average. Prices received rose almost 7 pts m/o/m to 46 and is 10 pts above the 6 month average and at the highest level since this survey began in 2001. The 6 month business outlook got back most of what it lost in July, up 7 pts to 46.5 and that is 5.4 pts above the 6 month average. Capital spending plans were mixed with both components below the 6 month average. Expectations for prices paid rose but those received fell but only after a 13 pt jump in July.
4)The August Philly manufacturing index fell to 19.4 from 21.9 and vs the estimate of 23.1. That is the lowest print since December 2020. Prices paid was 71.2, 2 pts below the very high 6 month average. Prices received rose 7 pts to 53.9 and is 11 pts above its half yr average and at the highest level since 1974. Of particular note in this data was the 15 pt drop in the 6 month outlook to 33.7. That is almost 22 pts below the 6 month average and the lowest since October 2019. Capital spending plans fell to a 6 month low. While prices paid receded in the outlook, those received jumped 14 pts.
5)Housing starts totaled 1.53mm in July, 70k less than expected and compares with 1.65mm in June. Of this, single family starts totaled 1.11mm vs 1.63mm in June and this compares with the 6 month average of 1.126mm. Multi family starts made up the balance of 423k vs 451k for the 6 month average. The real fly in today’s data was the total of single family permits which came in at 1.048mm, the lowest since July 2020. Multi family permits though rose to 587k from 528k and that is the most since January.
6)There was a 7 bps uptick in the average 30 yr mortgage rate to 3.06% and while still historically low, mortgage apps fell on the week. Purchases fell .8% w/o/w and are lower by almost 19% y/o/y on tougher comps. They are down in 6 of the last 8 weeks. Refi’s dropped by 5.3% w/o/w after last week’s 1.8% rise. They are lower by 8.4% y/o/y.
7)The August NAHB home builder sentiment index fell 5 pts m/o/m to 75 where the estimate was for no change. That’s the lowest since July 2020. The Present Conditions component declined by 5 pts to 81 but Expectations held at 81. Prospective Buyers Traffic, reflecting the demand side, dropped by 5 pts to 60, also the lowest since July 2020. With respect to those price hikes, the NAR said “some prospective buyers are experiencing sticker shock due to higher construction costs.” As for the supply side, “higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales.”
8)Canada said its July CPI rose .6% m/o/m, double the estimate and up from .3% in June. Prices are up 3.7% y/o/y. Prices are up 6% year to date annualized.
9)Germany said its July PPI rose 1.9% m/o/m, double the estimate and comes after a 1.3% jump in June. It’s up 10.4% y/o/y and 15% year to date annualized.
10)UK wholesale prices for July rose .8% m/o/m, well more than the estimate of up .5% and that is even after a 6 tenths upward revision to June. Prices are up 10% y/o/y. Output charges were up by .6% m/o/m for a 2nd month. They are higher by 7% year to date annualized.
11)Retail sales in the UK in July ex fuel missed expectations with an unexpected 2.4% m/o/m drop vs the estimate of no change.
12)Retail sales in China in July rose 8.5% y/o/y, below the 12.1% pace in June and the estimate of up 10.9%. Industrial production grew by 6.4% vs the forecast of 7.9% and the 8.3% increase in June. Fixed asset investment year to date also missed the consensus.
13)Japan said its exports rose 37% y/o/y in July helped by easy comps but that was just below the estimate of up 39.4%. Imports were higher by 28.5% y/o/y, vs the forecast of up 35.3%.
14)The world’s 3rd busiest container port, Ningbo-Zhoushan in China, has been partially shut down because of a few covid cases. New Zealand is essentially shutting down the entire country because of a few covid cases. Sydney is initiating selective lockdowns because of a few covid cases.