Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Housing starts in totality were about as expected but the multi family side continues to show deceleration as the market absorbs a huge increase in supply this year and deal numbers don’t pencil out like they did pre 2022. Single family starts rose by 27k m/o/m, a 5 month high. Multi family starts fell to 327k, a 6 month low. As for what is planned to come via permits, single family rose a touch, by 3k m/o/m to 970k. Permits for multi family construction fell to 458k from 503k. That is the 2^nd lowest read since the Covid lows and 2018 before then.

2)The NAHB home builder sentiment index for October rose 2 pts m/o/m to 43 though still well below 50. The estimate was 42. The Present Situation component was up 2 pts to 47 while the Expectations side was above 50 for a 2^nd month, up by 4 pts to 57 and likely optimistic with the Fed in rate cutting mode, though mortgages mostly price off the 10 yr which we know is higher. Of note still, Prospective Buyers Traffic was well under 50 again at 29, though up 2 pts m/o/m. The NAHB said “Despite the beginning of the Fed’s easing cycle, many prospective home buyers remain on the sideline waiting for lower interest rates. We are forecasting uneven declines for mortgage interest rates in the coming quarters, which will improve housing demand but place stress on building lot supplies due to tight lending conditions for development and construction loans.”

3)After last week’s jump in initial jobless claims to a revised 260k (up 2k), in part due to the hurricane, it fell back to a still elevated 241k where the estimate was 259k. This raised the 4 week average to 236k from 232k. Delayed by a week, those still receiving continuing claims numbered 1.867mm as expected, up slightly from the prior week and still hanging around the highest level since November 2021.

4)September core retail sales rose .7% m/o/m, above the estimate of .3% and after rising by .3% in the month before which was left unrevised. Not included here, auto sales were flat while building materials were up by .2% m/o/m.

5)September import prices remained benign and about as expected.

6)Container shipping rates continue to fall w/o/w with the Shanghai to Rotterdam route down by $218 to $3,373, still well above the about $1,700 level at the beginning of the year but well off its summer high above $8,000. Prices to NY and LA also fell. Air cargo rates though were little changed w/o/w but still up 20% y/o/y according to World ACD pricing. 

7)The October Philly index surprised to the upside with a print of +10.3, up from +1.7 and above the estimate of +3. Of note too, the 6 month business outlook did rise to 36.7 from 15.8 and just below the 38.7 seen in July.

8)Within the NY Consumer Expectations survey there was slight improvement in the labor market answers.