Wednesday, January 19, 2011

Annual Housing Completions

The other component of housing data that often gets overlooked is the number of actual housing completions.  While this is not a forward indicator, it gives a better retrospective look at the housing market as it relates to valuation of the home construction sector.  Since data began being collected on this back in 1968, we just posted the worst home completions number ever, coming in at 653,500 total homes completed.  The previous worst number was last year, coming in at 794,400 total homes.  In other words, the home construction market came in at 18% below last year.  The recent peak number was in 2006, coming in at 1,979,400.  The all time peak was in 1973, coming in at 2,100,500.  We are 67% off the 2006 high. 

Thursday, January 13, 2011

Trade Balance: Reality Edition

The news today has mostly been focusing on the supposed narrowing trade gap due to a weaker dollar and “growing global demand”.
Here’s what the numbers YTD look like in 2005 chained dollars compared to last year:

The trade gap has actually increased $66.73 billion.

Tuesday, January 11, 2011

JOLTS and the Jobless Recovery, Decade Edition

Oftentimes the reporting for the BLS JOLTS data (Job Openings and Labor Turnover Survey) focuses on job openings, but I personally don’t find a job opening compelling if it doesn’t translate into an actual hire, from an economic standpoint. 
They compile both, as well as providing separations data.  I decided to do a quick bump up of these numbers to get a net job creation number (simply take hires and subtract separations).  The trending was not at all surprising, it mirrored the technical recession periods of 2001-2002 and 2008-2009.  What was surprising was the total net creation; specifically, per this data we’ve had a net negative job creation over the past decade of 1.76 million jobs.

Thursday, January 6, 2011

Of Blizzards And Angst

Per the headline, snow in December + “angst” = sales and profit misses for retailers.  These misses probably could have been avoided had the analysts tracking retailers simply kept their eye on the ball.
This tracks discretionary consumer spending (excludes house, vehicle, and standard monthly bills).  They include a handy download link to get all the raw data in Excel.
From this data, here’s what average consumer discretionary looked like in 4Q 2009 vs. 4Q 2010:

Daily spending dropped from $66.79 in 4Q 2009 down to $63.96 in 4Q 2010, or a drop of 4.2%.  Obviously there are other factors at work in determining how this relates to stock valuation for the retail sector as a whole, but from a fundamentals standpoint, it’s probably unreasonable to make an argument for higher valuations of retail stocks in the absence of significant cost cutting measures.