Economic Reports 11/01/06
Oct. ISM Manufacturing DOWN @ 51.2 vs prior 52.9 Full Report
Inside the number: New orders DOWN to 52.1% from 54.2%; Employment UP to 50.8% from 49.4%; Prices DOWN to 47.0% from 61.0%; Inventories UP to 49.4% from 46.4%.
Inventories are building and prices have peaked for this cycle, the deceleration should continue in the months to come.
A peak into the future: TRW Automotive Holdings Corp., the world's second biggest maker of vehicle air bags, said third quarter profit fell by half because of production cuts by U.S. automakers.
Sept NAR Pending Home Sales DOWN -1.1% vs prior +4.7%
Inside the number: down 13.6% in the past year. Home sales down 14% in the past year, while building permits have plunged 27%.
Pending home sales index +2.1% in the Midwest, but -18.5% YOY; -0.4% in the West and -15.2% YOY; -1.3% in the South and -9% YOY; -5.9% in the Northeast -15.9% YOY.
MBA Weekly Mortgage Applications DOWN -3%
Inside the number: Down 11.2% in the past year to their lowest level in 3 years. Purchase applications are down -29% from their peak in the summer of 2005.
Refi apps down -4.5% weekly and -42% from the 2005 peak. Despite 30 yr rates dropping to 6.24%, the housing & lending machine are grinding to a crawl.
One reason why is less "easy ARM money". The spread between a one year ARM and a 30 year fixed narrowed to 31 basis points, the second narrowest spread in five years. Still, ARMs accounted for 25.9% of the latest week's loan applications.
Oct. Construction Spending DOWN -0.3% vs prior FLAT
Inside the number: Private residential construction spending -1.1% vs prior -1.6%. The 6th straight monthly decrease with spending down 6.9% over the last year. Federal construction spending -1.5%.
Summary: Housing sales, starts, construction spending & automotive manufacturing continue to decline.
Expect the auto sales "bump up" to last quarters declining GDP to disappear in the near term barring extreme incentives from the manufacturers.
It remains to be seen if the impact of these critical sector declines can continue to be offset by the remaining Gulf rebuilding and Iraqi war efforts.
Inside the number: New orders DOWN to 52.1% from 54.2%; Employment UP to 50.8% from 49.4%; Prices DOWN to 47.0% from 61.0%; Inventories UP to 49.4% from 46.4%.
Inventories are building and prices have peaked for this cycle, the deceleration should continue in the months to come.
A peak into the future: TRW Automotive Holdings Corp., the world's second biggest maker of vehicle air bags, said third quarter profit fell by half because of production cuts by U.S. automakers.
Sept NAR Pending Home Sales DOWN -1.1% vs prior +4.7%
Inside the number: down 13.6% in the past year. Home sales down 14% in the past year, while building permits have plunged 27%.
Pending home sales index +2.1% in the Midwest, but -18.5% YOY; -0.4% in the West and -15.2% YOY; -1.3% in the South and -9% YOY; -5.9% in the Northeast -15.9% YOY.
MBA Weekly Mortgage Applications DOWN -3%
Inside the number: Down 11.2% in the past year to their lowest level in 3 years. Purchase applications are down -29% from their peak in the summer of 2005.
Refi apps down -4.5% weekly and -42% from the 2005 peak. Despite 30 yr rates dropping to 6.24%, the housing & lending machine are grinding to a crawl.
One reason why is less "easy ARM money". The spread between a one year ARM and a 30 year fixed narrowed to 31 basis points, the second narrowest spread in five years. Still, ARMs accounted for 25.9% of the latest week's loan applications.
Oct. Construction Spending DOWN -0.3% vs prior FLAT
Inside the number: Private residential construction spending -1.1% vs prior -1.6%. The 6th straight monthly decrease with spending down 6.9% over the last year. Federal construction spending -1.5%.
Summary: Housing sales, starts, construction spending & automotive manufacturing continue to decline.
Expect the auto sales "bump up" to last quarters declining GDP to disappear in the near term barring extreme incentives from the manufacturers.
It remains to be seen if the impact of these critical sector declines can continue to be offset by the remaining Gulf rebuilding and Iraqi war efforts.
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