Economic data

The NAHB home builder sentiment survey was unch at 16, in line with expectations and flat for a 4th straight month. Present conditions rose by 2 pts to 17, the best since June. The Future outlook rose 1 pt. Prospective Buyers Traffic was unch at 12. Expressing how depressed the industry remains, 50 is the breakeven between expansion and contraction. According to the NAHB head, “while builders are starting to see more interest among potential home buyers, we are dealing with a multitude of challenges, including competition from foreclosure properties and inaccurate appraisals of new homes, which are limiting our ability to sell…On top of that, an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects, and most do not see that situation improving anytime soon.” While things are really not much better for builders, its hard to imagine they can get much worse.

The Feb NY Fed survey (the 1st Feb industrial figure out) was about in line with expectations at 15.4 vs 11.9 in Jan to the best since June but also reflected continued inflation pressures and mixed components. New Orders fell a touch. Backlogs rose but remained negative. The Employment component fell by 5 pts but the average workweek rose to a 5 month high. Inventories rose 5 pts to the highest since April. Prices Paid rose 10 pts to 45.8, the highest since Aug ’08 while Prices Received rose 1 pt to 16.9, the most since Oct ’08, thus “suggesting some pressure on profit margins” said the NY Federal Reserve Bank. The 6 month outlook fell by 10 pts to 49.4 but from a very elevated level in Jan. The outlook for both Prices Paid and Received over the next 6 months fell and central bankers around the world are hoping for the same thing.

Retail Sales were below expectations headline, ex auto’s and ex auto’s/gasoline and Dec was revised lower. Sales ex auto’s and gasoline specifically rose .2% vs the forecast of up .4% and Dec was revised to a gain of .1% vs the initial reading of up .4%. The core rate which takes out building materials in addition to auto’s and gasoline, was up .4% after a decline of .1% in Dec (revised from up .2%). Sales rose in electronics, after 3 months of declines, food/beverages, health/personal care, department stores and for online retailers. Sales fell at restaurant/bars, clothing, sporting goods, building materials and furniture. This data doesn’t take into account inflation where many things we buy are imported and Jan import prices rose 5.3% y/o/y vs estimates of 4.4%. Of course though what we bought in Jan was imported well before but points to the future influence inflation will have. Import prices from China rose .3% for a 4th straight month.

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