March industrial production, new home construction, and existing home sales

major monthly reports released this week included the March report on Industrial Production and Capacity Utilization from the Fed, the March report on New Residential Construction from the Census Bureau, and the Existing Home Sales Report for March from the National Association of Realtors (NAR)…the week also saw the release of the Regional and State Employment and Unemployment Summary for March from the BLS and the first two regional Fed manufacturing surveys for April: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index fell to +5.2, down from +16.4 in March, suggesting a slower growth rate of First District manufacturing… meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell to +22.0 in April from +32.8 in March and from +43.3 in February, indicating a smaller but still significant plurality of the region’s manufacturing firms reported increases in their activity this month…

Industrial Production Up 0.5% in March on Return to Normal Temperatures

industrial production increased in March entirely on a jump in the seasonally adjusted output of utilities, which saw demand return to normal levels after record warm February temperatures across much of the US…the Fed’s G17 release on Industrial production and Capacity Utilization for March reported that industrial production rose 0.5% in March after rising by a revised 0.1% in February, which left production 1.5% higher than a year ago…the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, was at 104.1 in March, after the February index was revised down to 103.5 from 103.7 and the January index was revised down from 103.6 to 103.5…this month’s data now reflects the results of an annual revision on March 31st which left the IP indexes for most months about 1% lower than previously published numbers..

the manufacturing index, which accounts for more than 77% of the total IP index, fell to 102.9 in March, after the February index was revised from 103.6 to 103.3, the January index was revised from 103.1 to 103.0, and the December index was revised from 102.5 to 102.6…as a result, the manufacturing index now stands 0.8% above its year ago level, while first quarter manufacturing has grown at a 2.8% annual rate over that of the 4th quarter of 2016….meanwhile, the mining index, which includes oil and gas well drilling, rose 0.1%, from 106.0 in February to 106.1 in March, after the February index was revised down from 110.6, which left the mining index 2.9% higher than it was a year earlier…finally, the utility index, which typically fluctuates due to deviations from normal temperatures, rose by 8.6% in March, from 93.2 to 101.3, after the February utility index was revised from 93.4 to 93.2, down 5.8% from January…

this report also includes capacity utilization data, which is expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry rose to 76.1% in March from 75.7% in February, which was revised from the 75.4% reported last month and the the 75.9% reported in the annual revision …capacity utilization of NAICS durable goods production facilities fell from a revised 75.3% in February to 74.6% in March, while capacity utilization for non-durables producers rose from a revised 76.9% to 77.0%…capacity utilization for the mining sector fell to 81.9% in March from 82.0% in February, which was previously reported as 80.5%, while utilities were operating at 75.7% of capacity during March, up from their 69.7% of capacity during February, which was previously reported at 70.9%…for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories..

March Housing Starts Reportedly Lower, New Permits Higher 

the March report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were started at a seasonally adjusted annual rate of 1,215,000 in March, which was 6.8 percent (±12.5 percent)* below the revised estimated February annual rate of 1,303,000, but was 9.2 percent (±9.1 percent) above last March’s rate of 1,113,000 housing starts a year…the asterisk indicates that the Census does not have sufficient data to determine whether housing starts actually rose or fell during March, with the figures in parenthesis the most likely range of the change indicated; in other words, March housing starts could have been up by 5.7% or down by as much as 19.3% from those of February, with revisions of a greater magnitude in either direction possible…in this report, the annual rate for February housing starts was revised from the 1,288,000 reported last month to 1,303,000, while January starts, which were first reported at a 1,285,000 annual rate, were revised from last month’s initial revised figure of 1,251,000 annually to a 1,241,000 annual rate with this report….these annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 98,500 housing units were started in March, up from the 88,600 units that were started in February and the 82,300 units that were started in January..

the monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data…in March, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,260,000, which was 3.6 percent (±2.8 percent) above the revised February rate of 1,216,000 permits, and was 17.0 percent (±1.2 percent) above the rate of building permit issuance in March a year earlier…the annual rate for housing permits issued in January was revised up from the originally reported 1,213,000….again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 111,900 housing units were issued in March, up from the revised estimate of 84,800 new permits issued in February…. for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 1.215 Million Annual Rate in March and Comments on March Housing Starts… 

Existing Home Sales 4.4% Higher in March

the National Association of Realtors (NAR) reported that existing home sales rose at a 4.4% rate from February to March on a seasonally adjusted basis, projecting that 5.71 million existing homes would sell over an entire year if the March home sales pace were extrapolated over that year, a pace that was also 5.9% above the annual sales rate projected in March of a year ago….the NAR also reported that the median sales price for all existing-home types was $236,400 in March, up from the revised $228,200 in February, and 6.8% higher than in March a year earlier, which they report as “the 61st consecutive month of year-over-year gains”…..the NAR press release, which is titled “Existing-Home Sales Jumped 4.4% in March“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release…as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

since this report is entirely seasonally adjusted and at a not very informative annual rate, we usually look at the raw data overview (pdf) to see what actually happened during the month…this unadjusted data indicates that roughly 456,000 homes sold in March, up 44.8% from the 319,000 homes that sold in February, and up by 8.3% from the 421,000 homes that sold in March of last year, so we see the effect of a large seasonal adjustment….that same pdf indicates that the median home selling price for all housing types rose by 3.6%, from a revised $228,200 in February to $236,400 in March, while the average home sales price rose 3.3% to $278,500 from the $269,500 average sales price in February, while it was up 5.3% from the $264,400 average home sales price of March a year ago…for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: NAR: “Existing-Home Sales Jumped 4.4% in March” and A Few Comments on March Existing Home Sales..


(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

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