Signs of Weak GDP.
MBA Mortgage Applications (week ended 5/8/2015)
– Purchase Index Week/Week -0.2%. Previous weeks were +1.0%, +0.0%, +5.0%, -3.0%, +7.0%, +6.0%, +5.0%, -2.0%, +2.0%, -0.2%, +5.0%, -7.0%, and -7.0%.
– Refinance Index Week/Week -6.0% Previous weeks were -8.0%, -4.0%, +1.0%, -2.0%, -3.0%, +4.0%., +12.0%, -5.0%, -3.0%, -0.2%, +1.0%, and -16.0%.
– Composite Index Week/Week -3.5%. Previous weeks were -4.6%, -2.3%, +2.3%, -2.3%., +0.4%, +4.6%, +9.5%, -3.9%, -1.3%, -1.3%, +0.1%, -8.0%. and -13.2%.
Higher rates hurt refinance applications. Purchase applications reflect the combination of lack of buyers are current prices and also the fact that in the for the past couple of years there are more cash buyers who don’t need a mortgage. This is especially trues in places like South Florida. The all-cash buyer does not affect the week-to-week trend but is simply noted as a factor in the longer term decline in purchase applications.
Retail Sales (April 2015)
– Retail Sales month/month +0.0%. Previous was +0.9%
– Retail Sales less autos month/month +0.1%. Previous was +0.4%
– Less Autos & Gas month/month +0.2%. Previous was +0.5%.
This is consumer spending – the heart of GDP.
This is why I pay little attention to Consumer Confidence data. Consumer Confidence is supposed to forecast Retail Sales. That ain’t happening. Rather than try to assess why the people surveyed do not follow up and spend the money they say they intended to spend I would simply continue my belief that Consumer Confidence metrics are only very weakly correlated with spending.
Import and Export Prices (April 2015)
– Export Prices month/month -0.7%. Previous was +0.1%
– Export Prices year/year -6.3%. Previous was -6.7%
– Import Prices month/month -0.3%. Previous was -0.2%
– Import Prices year/year -10.7%. Previous was -10.5%.
Business Inventories (March 2015)
– Inventories month/month +0.1%. Previous was +0.2%.
This is also a GDP components and is weak. This and the downward revision to February will take something out of 1stQ2015 GDP making it more probable that we had zero or negative GDP change in the 1stQ2015.