U.S. Economics Weekly Review (Oct. 26, 2015)

- Housing index was almost solid while upward momentum of price somewhat eased

- Manufacturing indexes including regional Feds' slightly bottomed-up with external fears decreased

- 3Q GDP will be released ahead of FOMC... market expects 1.5%...

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1. Housing index was almost solid while upward momentum of price somewhat eased

  (1) U.S. Home Builders Index Strengthens to 10-Year High

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo increased 4.9% to 64 (18.5% y/y) from a downwardly revised September level of 61. It was the highest level since October 2005 and beat expectations for 62 in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted.

  (2) U.S. Housing Starts Post Firm Gain but Building Permits Ease

Housing starts during September increased 6.0% to 1.206 million (AR) from 1.132 million in August, last month reported as 1.126 million. During all of the third quarter, starts inched 0.5% higher versus Q2. The latest figure surpassed expectations for 1.131 million starts in the Action Economics Forecast Survey.

Housing Starts (000s, SAAR)	Sep	Aug	Jul	Sep Y/Y %	2014	2013	2012
Total	1,206	1,132	1,152	17.8	1,001	928	784
Single-Family	740	738	759	11.1	647	620	537
Multi-Family	466	394	393	28.7	354	308	247
Starts By Region
Northeast	137	111	160	28.7	110	97	80
Midwest	137	156	171	-18.0	159	149	129
South	621	617	556	23.0	497	467	400
West	311	248	265	30.0	236	217	175
Building Permits	1,103	1,161	1,130	4.4	1,052	987	829

  (3) U.S. Existing Home Sales Rebound as Prices Fall Again

Sales of existing homes increased 4.7% (8.8% y/y) during September to 5.550 million and recouped the August decline to 5.300 million, revised from 5.310 million.

Existing Home Sales (SAAR, 000s)	Sep	Aug	Jul	Y/Y %	2014	2013	2012
Total	5,550	5,300	5,580	8.8	4,920	5,074	4,657
Northeast	760	700	700	11.8	640	658	596
Midwest	1,310	1,280	1,300	12.0	1,131	1,194	1,063
South	2,210	2,130	2,290	5.7	2,048	2,032	1,834
West	1,270	1,190	1,290	9.5	1,102	1,190	1,163
Single-Family Sales	4,930	4,680	4,950	9.6	4,334	4,473	4,125
Median Price Total ($, NSA)	221,900	228,500	231,800	6.1	206,708	195,667	175,433

2. Manufacturing indexes including regional Feds' slightly bottomed-up with external fears decreased

  (1) U.S. Markit Manufacturing PMI turned up this month with robust new orders index

  (2) Philadelphia Fed Nonmanufacturing Survey Indicates Improvement

  (3) Kansas City Federal Reserve Factory Sector Index Improves

... Manufacturing’s soft spot will end with a short-cycle.
Global manufacturing has stagnated this year, expanding at a less-than-1% annualized pace. Three developments should promote a rebound toward 2.5% growth. First, we expect tech activity to pickup, helped in part by a year-end product cycle for mobile devices.
Second, we expect rising global tech and consumer demand to allow companies to slow stock-building, removing a recent drag on manufacturing output. Finally, a sharp slowing in China’s industrial sector should end as policy supports consumer and infrastructure spending.

3. U.S. Initial Jobless Insurance Claims Remain Near 1973 Low

Initial claims for unemployment insurance notched higher during the week ended October 15 to 259,000 from 256,000 during the prior week, revised from 255,000.

4. U.S. Leading Economic Index Declines... but, seems old fashioned...

It seems that components in leading, coincident, and lagging economic indexes are old fashioned maybe as economic structures change after financial crisis...

Business Cycle Indicators (%)	Sep	Aug	Jul	Sep Y/Y	2014	2013	2012
Leading	-0.2	0.0	0.0	3.4	5.8	3.3	2.1
Coincident	0.2	0.1	0.3	2.2	2.5	1.9	2.6
Lagging	0.5	0.1	0.4	4.0	3.8	3.8	3.1