Browsing Posts tagged new homes

Economic Indicators Roundup (April 15, 2014)

Economic indicators are everywhere, so this is kind of like a dashboard that I like to follow.  For each indicator, I will try to give you a brief description, the latest reading and what I understand to be its implications.  For simplicity, I will assign each a rating of positive, neutral or negative.  For the economic indicators, I will denote in each one’s section how I decide which rating to give it.  At the end, I assign an overall rating, but this is just to guide me in my takeaway of where things stand.  It’s not scientifically rigorous or anything.

  • Positive - indicative of a healthy, growing economy.
  • Neutral - indicative of a slow or no growth economy but not a contracting (recession) economy.
  • Negative - indicative of a shrinking economy or recession.

(NOTE: For a “Quick ‘n Easy” read, just review the labeled white boxes, then skip to my “Easy Take” summary at the end.  You can review any charts/graphs afterward.  I want to make sure no one is intimidated by the length of my posts, even though I’m trying to making them easy …)


Quick Summary

Indicator (Click for details – only works if full article is open) Current Rating (change from previous roundup)
ADS Business Conditions Index Positive
Bloomberg Financial Conditions Index Positive
Daily Consumer Leading Indicators Negative
Citigroup Economic Surprise Index Negative
Employment Trends Index Positive
Chicago Fed National Activity Index Neutral
Easynomics Real Estate Price Stability Index Positive
Easy Trends Dashboard   (min/max -3 to +3) +2.56 = Definitely moving in a positive direction, with very few unconfirmed trends or off-trend readings

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.



Economic Indicator: ADS Business Conditions Index   |   POSITIVE
Easy Intro to ADS Business Conditions Index   |   Link to Source   |   Latest Date This Info Represents: April 5, 2014

Quick ‘n Easy

A combination of several key indicators of business conditions suggests, with high confidence, that at the end of December 2013 (most recent date for which there is data for all components of the index), conditions were below average (-0.486).  As of about a week and a half ago, it suggested, with low confidence, that current conditions were slightly above average (+0.143), historically speaking.  The index suggests that economic activity took a temporary dive in late 2013 before bouncing back quickly to levels that are slightly above historical averages.

Economic Indicators - ADS Business Conditions Index April 5 2014

Source: PhiladelphiaFed.org

Easy Description: Combines several indicators together to describe current business conditions.  A value above zero means that conditions are better than average, but below zero means worse than average.

Latest Readings:

April 5, 2014: Positive (+) 0.143 (includes weekly unemployment figures and maybe one other indicator)

One month prior: Positive (+) 0.109
One quarter prior: Negative (-) 0.521

The most recent date for which there is data for all components of the index is end of December 2013, when conditions were below average (-0.486).

Implications: It looks like conditions took a hit after reaching an interim high in mid-November 2013.  Fortunately, we never went into a recession-type shrinking phase, and preliminary data suggest that conditions quickly bounced back up to above average levels since mid-February.

Additional Info: This index provides confident readings about the past when all of the indicators have been collected (everything to the left of the left-most vertical line).  The readings in between the two vertical lines are somewhat less confident because they include some, but not all, of the indicators.  And the latest reading always falls to the right of the right-most vertical line and includes only a couple of indicators.

Easynomics Rating Methodology: For this index, I will use the very latest reading and rate anything between zero and minus (-) 1.00 as “neutral” – anything above or below that will be rated “positive” or “negative” respectively.

continue reading…

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Economic Indicators Roundup (April 7, 2014)

Economic indicators are everywhere, so this is kind of like a dashboard that I like to follow.  For each indicator, I will try to give you a brief description, the latest reading and what I understand to be its implications.  For simplicity, I will assign each a rating of positive, neutral or negative.  For the economic indicators, I will denote in each one’s section how I decide which rating to give it.  At the end, I assign an overall rating, but this is just to guide me in my takeaway of where things stand.  It’s not scientifically rigorous or anything.

  • Positive - indicative of a healthy, growing economy.
  • Neutral - indicative of a slow or no growth economy but not a contracting (recession) economy.
  • Negative - indicative of a shrinking economy or recession.

(NOTE: For a “Quick ‘n Easy” read, just review the labeled white boxes, then skip to my “Easy Take” summary at the end.  You can review any charts/graphs afterward.  I want to make sure no one is intimidated by the length of my posts, even though I’m trying to making them easy …)


Quick Summary

Indicator (Click for details – only works if full article is open) Current Rating (change from previous roundup)
ADS Business Conditions Index Positive
Bloomberg Financial Conditions Index Positive
Daily Consumer Leading Indicators Negative
Citigroup Economic Surprise Index Negative   (Downgrade)
Employment Trends Index Positive
Chicago Fed National Activity Index Neutral
Easynomics Real Estate Price Stability Index Positive
Easy Trends Dashboard   (min/max -3 to +3) +2.56 = Definitely moving in a positive direction, with very few unconfirmed trends or off-trend readings

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.



Economic Indicator: ADS Business Conditions Index   |   POSITIVE
Easy Intro to ADS Business Conditions Index   |   Link to Source   |   Latest Date This Info Represents: March 29, 2014

Quick ‘n Easy

A combination of several key indicators of business conditions suggests, with high confidence, that at the end of December 2013 (most recent date for which there is data for all components of the index), conditions were below average (-0.486).  As of about a week and a half ago, it suggested, with low confidence, that current conditions were virtually average (+0.067), historically speaking.  The index suggests that economic activity took a temporary dive in late 2013 before bouncing back quickly to levels that are around historical averages.

Economic Indicators - ADS Business Conditions Index March 29 2014

Source: PhiladelphiaFed.org

Easy Description: Combines several indicators together to describe current business conditions.  A value above zero means that conditions are better than average, but below zero means worse than average.

Latest Readings:

March 29, 2014: Positive (+) 0.067 (includes weekly unemployment figures and maybe one other indicator)

One week prior: Positive (+) 0.087
One month prior: Positive (+) 0.117
One quarter prior: Negative (-) 0.470

The most recent date for which there is data for all components of the index is end of December 2013, when conditions were below average (-0.486).

Implications: It looks like conditions took a hit after reaching an interim high in mid-November 2013.  Fortunately, we never went into a recession-type shrinking phase, and preliminary data suggest that conditions quickly bounced back up to above average levels since mid-February.

Additional Info: This index provides confident readings about the past when all of the indicators have been collected (everything to the left of the left-most vertical line).  The readings in between the two vertical lines are somewhat less confident because they include some, but not all, of the indicators.  And the latest reading always falls to the right of the right-most vertical line and includes only a couple of indicators.

Easynomics Rating Methodology: For this index, I will use the very latest reading and rate anything between zero and minus (-) 1.00 as “neutral” – anything above or below that will be rated “positive” or “negative” respectively.

continue reading…

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Economic Indicators Roundup (March 31, 2014)

Economic indicators are everywhere, so this is kind of like a dashboard that I like to follow.  For each indicator, I will try to give you a brief description, the latest reading and what I understand to be its implications.  For simplicity, I will assign each a rating of positive, neutral or negative.  For the economic indicators, I will denote in each one’s section how I decide which rating to give it.  At the end, I assign an overall rating, but this is just to guide me in my takeaway of where things stand.  It’s not scientifically rigorous or anything.

  • Positive - indicative of a healthy, growing economy.
  • Neutral - indicative of a slow or no growth economy but not a contracting (recession) economy.
  • Negative - indicative of a shrinking economy or recession.

(NOTE: For a “Quick ‘n Easy” read, just review the labeled white boxes, then skip to my “Easy Take” summary at the end.  You can review any charts/graphs afterward.  I want to make sure no one is intimidated by the length of my posts, even though I’m trying to making them easy …)


Quick Summary

Indicator (Click for details – only works if full article is open) Current Rating (change from previous roundup)
ADS Business Conditions Index Positive
Bloomberg Financial Conditions Index Positive
Daily Consumer Leading Indicators Negative
Citigroup Economic Surprise Index Neutral
Employment Trends Index Positive
Chicago Fed National Activity Index Neutral
Easynomics Real Estate Price Stability Index Positive
Easy Trends Dashboard   (min/max -3 to +3) +2.67 = Definitely moving in a positive direction, with very few unconfirmed trends or off-trend readings

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.



Economic Indicator: ADS Business Conditions Index   |   POSITIVE
Easy Intro to ADS Business Conditions Index   |   Link to Source   |   Latest Date This Info Represents: March 22, 2014

Quick ‘n Easy

A combination of several key indicators of business conditions suggests, with high confidence, that at the end of December 2013 (most recent date for which there is data for all components of the index), conditions were below average (-0.481).  As of about a week and a half ago, it suggested, with low confidence, that current conditions were slightly above average (+0.138), historically speaking.  The index suggests that economic activity took a temporary dive in late 2013 before bouncing back quickly to levels that are slightly better than historical averages.

Economic Indicators - ADS Business Conditions Index March 22 2014

Source: PhiladelphiaFed.org

Easy Description: Combines several indicators together to describe current business conditions.  A value above zero means that conditions are better than average, but below zero means worse than average.

Latest Readings:

March 22, 2014: Positive (+) 0.138 (includes weekly unemployment figures and maybe one other indicator)

One week prior: Positive (+) 0.139
One month prior: Positive (+) 0.080
One quarter prior: Negative (-) 0.386

The most recent date for which there is data for all components of the index is end of December 2013, when conditions were below average (-0.481).

Implications: It looks like conditions took a hit after reaching an interim high in mid-November 2013.  Fortunately, we never went into a recession-type shrinking phase, and preliminary data suggest that conditions quickly bounced back up to above average levels since mid-February.

Additional Info: This index provides confident readings about the past when all of the indicators have been collected (everything to the left of the left-most vertical line).  The readings in between the two vertical lines are somewhat less confident because they include some, but not all, of the indicators.  And the latest reading always falls to the right of the right-most vertical line and includes only a couple of indicators.

Easynomics Rating Methodology: For this index, I will use the very latest reading and rate anything between zero and minus (-) 1.00 as “neutral” – anything above or below that will be rated “positive” or “negative” respectively.

continue reading…

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Economic Indicators Roundup – Abridged Version (March 27, 2014)

Economic indicators are everywhere, so this is kind of like a dashboard that I like to follow. For simplicity, I will assign each a rating of positive, neutral or negative. At the end, I assign an overall rating, but this is just to guide me in my takeaway of where things stand.  It’s not scientifically rigorous or anything.

  • Positive - indicative of a healthy, growing economy.
  • Neutral - indicative of a slow or no growth economy but not a contracting (recession) economy.
  • Negative - indicative of a shrinking economy or recession.

Quick Summary

Indicator (Click for details – only works if full article is open) Current Rating (change from previous roundup)
ADS Business Conditions Index Positive   (Upgrade)
Bloomberg Financial Conditions Index Positive
Daily Consumer Leading Indicators Negative
Citigroup Economic Surprise Index Neutral
Employment Trends Index Positive
Chicago Fed National Activity Index Neutral
Easynomics Real Estate Price Stability Index Positive
Easy Trends Dashboard   (min/max -3 to +3) +2.44 = Likely moving in a positive direction, with several unconfirmed trends or off-trend readings

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.


Easy Trends Dashboard

Updated: March 27, 2014
Consensus Score: +2.44   (vs +2.39 one week ago)
Interpretation:  Likely moving in a positive direction, with several unconfirmed trends or off-trend readings

Indicator Trend Score* (change from last roundup)
Employment Report +3
Existing Homes Sales and Inventory Months of Supply +3
Factory Orders +1
GDP +3
Industrial Production +3
New Residential Homes Sales and Inventory Months of Supply +2   (up by 0.5)
Personal Income Levels +1
Residential Investment +3
Unemployment Claims +3

*Trend Score Definitions:

  • Confirmed trend with no recent readings that are off trend: +3 (good direction) or -3 (bad direction)
    • For each consecutive recent reading that was off trend in the opposite direction, I move the score by one point in the direction of zero
  • Unconfirmed trend: +1 (good direction) or -1 (bad direction)
  • No trend that has at least 50 percent confidence: 0

Easy Take

The ADS Business Conditions Index was upgraded to “positive” this week. The overall consensus thus gets upgraded to “positive” again.

The Easy Trends Dashboard is still in good shape, barely better than last week after a new home sales report that established an unconfirmed trend in the right direction. Every component of the Easy Trends Dashboard is positive.  The overall average for the trends dashboard suggests that indicators I follow are likely headed in the right direction.

We currently have 4 positive, 2 neutral and 1 negative economic indicators.  Using a scale of positive=3, neutral=2 and negative=1, this yields an average rating of 2.43 out of 3.00 (versus 2.29 one week ago), which falls in the upper third of the possible range.  In other words, my set of economic indicators combine into a “positive” rating.  The consensus view of the above indicators is that economic conditions are consistent with positive growth at or above the historical average rate.  Trends suggest that indicators are likely headed in a good direction.

Disclaimer: My dashboard isn’t really a group of similar indicators, so we can’t say that it represents any one particular thing.  For example, it’s not geared strictly toward predicting the future of the economy like a leading indicators dashboard.  It’s not like a coincident indicator dashboard that focuses on how things are right this second.  It’s just a bunch of things I like to follow, interpreted in a way to be consistent with either economic growth or shrinkage.  I would just guess that if the indicators I most like to follow start trending one way or the other, there is a good chance the economy is going that way, too.

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New Residential Homes Sales and Inventory Months of Supply – Easy Trends (thru February 2014)

Sales of new residential homes contributes to the GDP, and the level of supply can indicate something about prices.  I’m continuing a feature called “Easy Trends” – a place where I’ll analyze the recent trend for an indicator (in this one, it is new residential homes sales and inventory) and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest new residential homes inventory months of supply trend analysis for more info.

Quick ‘n Easy

For new residential homes reports, there are two key things to look at: 1) number of homes sold and 2) inventory of homes for sale.  When there are too many new residential homes still left unsold (inventory) on the market, it usually means that prices will be dropping because supply is greater than demand.  A good way of measuring the inventory is to calculate how long it would take that inventory to sell at the current pace of sales.  The normal level of supply for new residential homes is a little less than 6 months.

For new residential homes reports, there are two key things to look at: 1) number of homes sold and 2) inventory of homes for sale.  We care about the number sold because each one contributes to the overall economy (builders get paid, brokers get paid, companies that made the raw materials get paid, etc).  We care about inventory because when there are too many new residential homes still left unsold (inventory) on the market, it usually means that prices will be dropping because supply is greater than demand.  The opposite is true if there is very low inventory.  A good way of measuring whether current levels of new residential homes are too high or too low is to calculate how long it would take the current inventory to sell at the current annual pace of sales.  For example, if there are 150,000 unsold new residential homes with the most recent report saying the annual pace of sales was 225,000, here’s what the calculation would look like:

Example:
225,000 new residential homes sold per year
divide by 12 to get 18,750 new residential homes sold per month
150,000 unsold homes divided by 18,750 sold per month = 8 months supply

Here’s a graph of the New Residential Homes Sales followed by Inventory Months of Supply from Calculated Risk:

New Residential Homes Sales February 2014 - Calculated Risk

Courtesy: CalculatedRiskBlog.com

 

New Residential Homes Inventory Months of Supply February 2014 - Calculated Risk

Courtesy: CalculatedRiskBlog.com

New Residential Homes Trends and Projections

Below, I will discuss whether the indicators are currently in a trend, when the last confirmed trend was and what that says about projecting the next data points to be released.

I usually start my trend analysis from about three years ago. continue reading…

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Economic Indicators Roundup (March 17, 2014)

Economic indicators are everywhere, so this is kind of like a dashboard that I like to follow.  For each indicator, I will try to give you a brief description, the latest reading and what I understand to be its implications.  For simplicity, I will assign each a rating of positive, neutral or negative.  For the economic indicators, I will denote in each one’s section how I decide which rating to give it.  At the end, I assign an overall rating, but this is just to guide me in my takeaway of where things stand.  It’s not scientifically rigorous or anything.

  • Positive - indicative of a healthy, growing economy.
  • Neutral - indicative of a slow or no growth economy but not a contracting (recession) economy.
  • Negative - indicative of a shrinking economy or recession.

(NOTE: For a “Quick ‘n Easy” read, just review the labeled white boxes, then skip to my “Easy Take” summary at the end.  You can review any charts/graphs afterward.  I want to make sure no one is intimidated by the length of my posts, even though I’m trying to making them easy …)


Quick Summary

Indicator (Click for details – only works if full article is open) Current Rating (change from previous roundup)
ADS Business Conditions Index Neutral
Bloomberg Financial Conditions Index Positive
Daily Consumer Leading Indicators Negative
Citigroup Economic Surprise Index Neutral
Employment Trends Index Positive
Chicago Fed National Activity Index Neutral
Easynomics Real Estate Price Stability Index Positive
Easy Trends Dashboard   (min/max -3 to +3) +2.39 = Likely moving in a positive direction, with several unconfirmed trends or off-trend readings

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.



Economic Indicator: ADS Business Conditions Index   |   NEUTRAL
Easy Intro to ADS Business Conditions Index   |   Link to Source   |   Latest Date This Info Represents: March 8, 2014

Quick ‘n Easy

A combination of several key indicators of business conditions suggests, with high confidence, that at the end of December 2013 (most recent date for which there is data for all components of the index), conditions were below average (-0.289).  As of about a week and a half ago, it suggested, with low confidence, that current conditions were virtually average (-0.049), historically speaking.  The index suggests that economic activity generally improved the latter half of 2013, but it may have experienced a temporary slowdown from mid-November 2013 to mid-January 2014 before returning to near average levels.

Economic Indicators - ADS Business Conditions Index March 8 2014

Source: PhiladelphiaFed.org

Easy Description: Combines several indicators together to describe current business conditions.  A value above zero means that conditions are better than average, but below zero means worse than average.

Latest Readings:

March 8, 2014: Negative (-) 0.049 (includes weekly unemployment figures and maybe one other indicator)

One week prior: Negative (-) 0.064
One month prior: Negative (-) 0.237
One quarter prior: Negative (-) 0.087

The most recent date for which there is data for all components of the index is end of December 2013, when conditions were below average (-0.289).

Implications: It looks like conditions began deteriorating after hitting an interim high in mid-November.  Although we aren’t in a recession-type shrinking phase, preliminary data suggest that since early December, growth has been slower than historical averages, although it may have bounced back up to near-average levels now.  This index was much stronger before the disappointing jobs report for December and weaker-than-expected industrial production report for January though.

Additional Info: This index provides confident readings about the past when all of the indicators have been collected (everything to the left of the left-most vertical line).  The readings in between the two vertical lines are somewhat less confident because they include some, but not all, of the indicators.  And the latest reading always falls to the right of the right-most vertical line and includes only a couple of indicators.

Easynomics Rating Methodology: For this index, I will use the very latest reading and rate anything between zero and minus (-) 1.00 as “neutral” – anything above or below that will be rated “positive” or “negative” respectively.

continue reading…

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