North America’s major stock market indices have taken investors on a ‘theme park’ ride over the past 12 months − as can be seen from Graph 1. More often than not, it hasn’t been much fun.
There were substantial dips for all four indices – Dow Jones Industrials (DJI), the S&P 500, NASDAQ and the Toronto Stock Exchange (TSX) − in September of last year, followed by recovery for the U.S. series, and then another crater in the January-February period of this year.
Canada’s TSX stayed mainly down once it faltered in the fall of last year.
In the most recent month, however, there were notable improvements once again. At the close of trading in March 2016, the DJI, S&P 500 and NASDAQ were all within 1.0% of their levels achieved a year prior.
The TSX moved +4.9% during the month of March, but was still -9.4% year over year.
Worry has centered on the likely performance of corporate profits. It’s well known that in the energy sector, the low price of oil is taking a heavy toll on the revenues of exploration and extraction companies, as well as their service and material suppliers.
Yes, I’m an economist first, but in my secondary role as ‘tech whiz’ – my wife and kids would guffaw at that assertion – I’ve come across an exciting feature of standard Excel spreadsheets that I feel must be shared with you.
Of course, there’s always the danger that I’ve finally clued in to something everybody else has known about for years. However, I’ve asked around and it seems most people aren’t yet aware of a tool called ‘Sparklines’ that is highly worthwhile.
And neat and cool and easy to use.
Let’s suppose you have a ‘wall’ of data, such as appears in Table 1 that accompanies this Economy at a Glance. I’ve included the row numbers and column letters for ease of explanation.
The statistics in cells ‘C2’ diagonally to ‘O22’ are percent changes of U.S. put-in-place construction investment, latest 12-month averages versus previous 12-month averages. (more…)
Obtaining a proper read on retail sales in the U.S. and Canada these days has been made harder by the sharp drop in gasoline prices, -20.7% year over year south of the border and -13.1% on the north side.
As a result, February’s cash register ‘take’ by gas station operators in the U.S. was -15.6% year over year, while in Canada, in January, it was -7.1%. (Retail sales data from Statistics Canada consistently lags results from the Census Bureau by a month.)
Therefore, U.S. retail sales in February that were +3.1% year over year in total including gas station billings, were a much better +4.8% without them.
Similarly in Canada, an already good jump in total retail sales in January of +6.8% improved to an outstanding +7.3% when sales at the pump were omitted.
A significant milestone has just been reached in the U.S. labor market. For the latest week ending February 27th, America’s initial jobless claims figure was less than 300,000 for the 52nd week in a row.
That’s a whole year of strong success in keeping the number of people newly unemployed quite low. (In the Great Recession of 2008-2009, the number topped off at 670,000.)
Falling below their 300,000 benchmark level, rosy initial jobless claims automatically imply encouraging news from the Employment Situation Report published by the Bureau of Labor Statistics (BLS).
The BLS has just reported that in February, the total number of jobs in the U.S. rose by 242,000, where a gain of 200,000 or more is considered bullish.
The national unemployment rate stayed below 5.0% at 4.9%, the same as in January. A year ago, it had been 5.5%.
In another positive sign, the proportion of working-age people who actively sought employment in February moved a little higher, to 62.9%. This measure is called the ‘participation rate’ and it usually picks up when job prospects are good.
(On the flip side, when job prospects are abysmal, people stop looking for work and the result is a ‘discouraged worker’ effect.)
The multi-family market is where the excitement is to be found in the U.S. and Canadian city housing starts markets.
Table 6 shows some strikingly large percentage gains in multi-family starts from 2014 to 2015, with New York (+109.6%) – already busting at the seams with high-rise towers – more than doubling its annual volume of groundbreakings.
Miami (+60.4%) and Dallas-Fort Worth (+54.4%) recorded year-over-year multi-unit starts increases that were ahead by more than half. While Miami has staged a nice recovery (to 16,000 units in 2015) in multi-unit starts since its disastrous level (only 1,600 units) in the Great Recession year of 2009, it still remains considerably below its 15-year previous best figure of 23,300 units in 2005.
Dallas, on the other hand, in 2015 (28,000 multi-family units) shot well past its prior most stellar year (18,400 units in 2008).
Boston (+42.5%), Los Angeles (+34.2%) and San Francisco (+30.5%), in 2015, had multi-family starts levels that were close to or better than one-third higher than in 2014. (more…)
In the previous Economy at a Glance, there was an examination of ‘total’ housing starts in the largest urban centers in the U.S. and Canada.
2015 ‘actuals’ and year-over-year percent changes were laid out in two tables for 12 cities south of the border and six on the northern side.
The figures are being called ‘starts’, although for the U.S. centers they are actually derived from residential building permits.
The city definitions are based on broad boundaries that include downtown cores and nearby suburbs with close commuting ties.
In this current EAAG, the focus will be narrowed to the single-family market.
Nation-wide in the U.S., single-family starts are now accounting for about two-thirds of total starts, with multiples making up the other 33%. (In Canada last year, the proportions were the reverse, 35% for singles and 65% for multiples.)
The share in the U.S. taken by ‘singles’ has dropped dramatically over the past several years. A decade ago, it wasn’t uncommon for singles to be as much as 80% of total starts.
Based on the latest ‘actuals’ from Statistics Canada, the spring 2016 forecasts, out to 2019, of construction capital spending − also known as put-in-place investment – have just been calculated by CanaData.
Versus the fall of 2015, the year-over-year projections have mostly been scaled back.
Grand total constant dollar (i.e., adjusted for inflation) construction will decline a further 3.1% in 2016 after a drop of 3.4% in 2015. 2017 will see a slight improvement of +1.0%, followed by +3.5% in 2018 and +4.3% in 2019.
In the fall of last year, the comparable percentage changes were: 2015, -2.2%; 2016, +0.5%; 2017, +2.7%; and 2018, +4.1%. There was no 2019 forecast at that time.
In current dollars, 2015’s grand total was $285 billion, or -2.4% compared with $292 billion in 2014.
After a further 1.8% decline in this current year, 2016 will chalk up a volume of slightly less than $280 billion.
Current dollar gains of 2.9% and 5.6% in 2017 and 2018 respectively will finally lift the total dollar value of all Canadian put-in-place construction activity above $300 billion two years from now.
CMD announced today that January’s level of U.S. construction starts, excluding residential work, was $24.7 billion, an increase of 9.8% versus December. The nearly double-digit percentage increase was noteworthy since there is usually (i.e., average over 10-years-plus) a December-to-January decline, due to seasonality, of 8.5%.
Compared with January of 2015, the latest month’s starts level was +12.9%. Relative to average non-residential starts in January over the preceding five years, 2011 to 2015, the gain was +18.6%.
The starts figures throughout this report are not seasonally adjusted (NSA). Nor are they altered for inflation. They are expressed in what are termed ‘current’ as opposed to ‘constant’ dollars.
‘Non-residential building’ plus ‘engineering/civil’ work accounts for a considerably larger share of total construction than residential activity. The former’s combined proportion of total put-in-place construction in the Census Bureau’s December report was 63%; the latter’s was 37%. (more…)
My favorite meal when traveling on business or pleasure used to be breakfast in the hotel where I was staying. In the ‘old days’, a morning repast was almost invariably cheap, plentiful and delicious.
Last summer, I took my family to Chicago for some wonderful sightseeing. We live in Toronto. (Our oldest child has moved out of the house and he and his girlfriend undertake their own travel adventures.)
The price of the breakfast buffet where we were registered downtown was $32.50 USD. For the four of us, that would have come to $130.00 USD.
Such a charge would have been steep enough on its own. Factor in the value of the Canadian dollar at the time, and the price was going to be $160.00 CAD.
Consider the further devaluation in the loonie since then, and the pain rises to $185.00 CAD.
That’s serious coinage. It’s nearly enough to rent a tuxedo, which I’ve always considered to be an excursion into luxury land. (more…)