U.S. Construction Spending Is Little Changed for Second Month
The value of construction put-in-place improved 0.1% (3.7% y/y) during February following unrevised stability in January. A 0.4% rise in building activity had been expected in the Action Economics Forecast Survey.
Private sector building activity increased 0.7% (3.8% y/y) after a 0.7% decline in January. Nonresidential construction improved 1.5% (1.3% y/y) and reversed January’s shortfall. Office construction strengthened 6.5 (3.0% y/y) and commercial construction rose 1.2% (7.4% y/y). (…)
The value of public sector building activity declined 2.1% (+3.7% y/y) and reversed the prior month’s increase. Highway and street construction, the largest component of public sector construction, eased 0.2% (-3.1% y/y).
Why Consumer Spending Growth Is Slowing Banks are becoming more cautious lending to Americans despite a strong job market and rising incomes
(…) Credit-card lenders including Capital One and Synchrony Financial have confirmed that they tightened lending standards over the last two years in response to rising defaults or delinquencies. So, too, have auto lenders like Santander Consumer. (…)
This makes sense given the amount that consumers have borrowed in recent years. Data from the Federal Reserve Bank of New York show that aggregate household debt balances have risen for 14 straight quarters and at the end of last year exceeded their previous 2008 peak by $473 billion. (…)
Here’s a chart I show regularly:
Manhattan Home Sales Plunge Most Since 2009
Sales of all condos and co-ops fell 25 percent in the first quarter from a year earlier to 2,180, according to a report Tuesday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest annual decline since the second quarter of 2009, when Manhattan’s property market froze in the wake of Lehman Brothers Holdings Inc.’s bankruptcy filing and the global financial crisis that followed.
The drop in sales spanned from the highest reaches of the luxury market to workaday studios and one-bedrooms. Buyers, who have noticed that home prices are no longer climbing as sharply as they have been, are realizing they can afford to be picky. Rising borrowing costs and new federal limits on tax deductions for mortgage interest and state and local levies also are making homeownership more expensive, giving shoppers even more reasons to push back on a listing’s price — or walk away. (…)
Eurozone PMI at eight-month low amid broad-based growth slowdown
The final IHS Markit Eurozone Manufacturing PMI® posted 56.6 in March, unchanged from the earlier flash estimate and down further from December’s series-record high. The latest reading and the average over the first quarter as a whole (58.2) both remained indicative of solid growth nonetheless. (…)
The further easing in the headline PMI mainly reflected slower growth of manufacturing production and incoming new business, both of which rose to the lowest extents since November 2016. Growth in new export business* (which is not a component of the headline PMI) slipped to a 15-month low.
The breadth of the upturns in output, new orders and new export business was as wide as their slowdowns during March, as all of the countries covered recorded sustained growth in each, albeit at slower rates than in recent months. In some Northern nations, this was partly driven by bad weather.
There were also signs that capacity constraints deriving from the recent growth spurt were impacting on production growth in March. Recent lengthening in suppliers’ delivery times has been among the greatest in the survey history, leading to widespread reports of raw material shortages and supply delays. This trend was especially noticeable in the Netherlands and Germany, both of which saw record lengthening in vendor lead times.
Backlogs of work at euro area manufacturers also increased during March, taking the current sequence of expansion to almost three years. Companies reacted to the sustained pressure on their capacity by raising employment. Jobs growth was signalled for the forty-third straight month, although the pace of increase eased to a seven-month low. (…)
Input price inflation remained marked in March, despite easing to a six-month low. Higher costs were driven, at least in part, by supply-chain constraints. Average selling prices also continued to rise at a solid clip, albeit the slowest in the year so far, as companies passed on the rise in purchasing costs. There were also reports that the ongoing upturn in demand was leading to improved pricing power.
BTW, the euro devalued by 35% vs the USD between 2008 and 2016. It lost 17% since.
There is a broad-based tailing off of manufacturing PMIs in Asia in March. For the most part, the drops are not severe. But even where the queue percentile standings are relatively high, it is only because recent manufacturing activity levels in the region have been soft. (…)
TECHNICALS WATCH
CNN’s Fear & Greed Index:
Momentum turns against Wall Street’s bull run Breach of a key technical level raises bigger questions for US equities
The bull is back sitting on its 200d m.a. this morning but he’s pretty uncomfortable…
Good thing the 200d m.a. is still rising. Hopefully, the earnings season gets to a good start next week.
To make you more uncomfortable:
(…) Apple provides Intel with about 5 percent of its annual revenue, according to Bloomberg supply chain analysis. Intel shares dropped as much as 9.2 percent, the biggest intraday drop in more than two years, on the news. They were down 6.4 percent at $48.75 at 3:30 p.m. in New York. (…)
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Zuckerberg says it will take ‘a few years’ to fix Facebook
Also uncomfortable: