November Key Economic Data

The ISM Manufacturing Index surprised economists with a PMI reading of 56.4 in October—the highest level in 2013. Expectations were for the index to fall to 55 in October but instead the PMI increased 0.2 percentage points from September’s reading of 56.2. The indexes for new orders, production, inventories and employment all indicated growth.

The JPMorgan Global Manufacturing. Global manufacturingpicked up in October with production, new orders and international trade volumes all improving. The JP Morgan Global Manufacturing PMI rose to 52.1 in October from 51.8 in September. Expansion was seen all regions of the PMI composite except France, India and Greece which were still in the negative growth range below a reading of 50. Cost inflation was at a 1.5 year high although average selling prices increased only modestly.

The AIA Architecture Billings Index dropped to 51.6 in October from 54.3 in September, indicating a slower pace of growth for construction design activity. The new project inquiry index, an indicator for future demand, rose to 61.5 from 58.6 last month. Calculated on a three month moving average, the regional averages were as follows: West 55.9, South 54.4, Midwest 51.6, and Northeast 49.7. The averages dropped in the West and Northeast but were up slightly in the South and Midwest this month.

New Residential Construction. Data was delayed by the government shutdown. The October data will be released with the data release on November 26.

Existing home sales fell in October but low inventory continues to drive home prices upward according the National Association of Realtors. Home sales fell 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September. Sales are up 6.0 percent from this time last year. The national median existing home price was up 12.8 percent year-over-year to $199,500. The median time on market rose to 54 days as compared to 50 days in September and 71 days in October 2012.

S&P/Case Shiller US National Home Price Index rose 11.2 percent y/y for highest level since 2006. The index rose 3.2 percent q/q. Strong price gains in the West. Signals market is shifting to slower growth rather than acceleration.

US auto sales. U.S. automakers sales were up by 10.4 percent in October to 1.2 million vehicles. Early October sales slowed during the government shutdown as customers waited to see how the fiscal standoff resolved, but auto sales picked up later in the month. The seasonally adjusted annualized rate fell slightly to 15.22 million, down from 15.26 million in September and from 16.1 million in September.

Federal Reserve Manufacturing Index: The Richmond (5^th District) index surged to 13 in November from 1 in October. Shipments and new orders were up. Prices for raw materials and finished goods rose at slower pace. Input price growth is expected to slow over next several months. Kansas City (10^th district) showed modest growth in manufacturing activity for November. The new orders index jumped from 3 to 15. Future activity indices rose with the composite index up four points to 12. Market uncertainty, shortage of skilled labor and continued low inventories remained concerns. In Philadelphia (3^rd district) the pace of growth slowed, most indices were lower than September. The future general activity index moderated with a drop of 15 points to 45.8 in November. One third of manufactures expect to add workers in the next six months.

Construction Employment showed a fifth consecutive month of growth in October with 11,000 jobs added and an unemployment rate of 9 percent. Construction employment increased in 39 states over the past 12 months according to the Associated General Contractors of America. Mississippi and Florida led annual job growth, Indiana experienced the largest yearly decline; Alaska and Florida had the largest growth for the October, while Arizona and Texas lost the most jobs in October.