MTS Insights

Economic Report Monitor #59 August 14th, 2020 New residential figures for July came out and provided a fresh but of optimism for a strong economic recovery. Housing starts jumped 22.6% in July, another huge bounce, leading to a July total 23.4% higher than last year. The 1.496 million unit starts that beat expectations of 1.24 million heavily.  It was multifamily home units that carried the number in July with a 56.7% increase in that category to 547,000 units. The number is the strongest since January 2020 (619,000 units) and is 67.8% higher than a year ago. Single-family homes were up just 8.2% to 940,000 units, slightly lagging the 1,034,000 units in February. Since single-family homes are typically more in demand, it's slightly concerning to see that category lag the overall trend. Single-family home demand recovery is stronger than supply recovery The NAHB/Wells Fargo Housing Market Index report pointed to hot demand for single-family homes coming out of the bottom of the C...

Economic Report Monitor #59 August 14th, 2020 Retail sales in July confirmed what most people were expecting. The economic recovery has slowed with a resurgence of COVID-19 cases stalling reopening processes. Overall, sales increased just 1.2% after they surged 8.4% in June and failed to meet expectations of 2.3% that economists surveyed by Dow Jones suggested . Despite growth being muted in July, sales for the first 7 months of 2020 are down just -2.1% from the same period in 2019. Excluding motor vehicles & parts and gasoline stations, that number is actually 0.2% higher. From CNBC Motor vehicles & parts also dragged July retail sales lower with a -1.2% drop for the month. Retail sales without that category were 1.9% and closer to expectations. Building material & garden equipment & supplies dealer also dragged sales with a -2.9% drop itself. Furniture stores were flat at 0.0%. These numbers might point to further pain for durable goods categories which was most inte...

Economic Report Monitor #58 August 7th, 2020 Following the disappointing number on Wednesday, the Bureau of Labor Statistic's official report of the employment situation came out today. In a similar fashion, the BLS report showed a slower recovery in July as only 1.8 million jobs were added with the unemployment rate falling just 0.9% to 10.2%. While this beat expectations of about 1.6 million, it confirmed that a V-shaped recovery in the labor market is unlikely to materialize. From MarketWatch The number of unemployed individuals dropped by just 1.4 million to 16.3 million but is still up by about 10.6 million since February. Most of the COVID-19 losses remain as the number of individuals that have been jobless for 15 to 26 weeks rose by 4.6 million to total 6.5 million. Fresh job losses that occurred in the last 5 weeks are about 3.2 million, with just 364,000 added in July, suggesting the contraction in employment has slowed significantly. Most of the job additions were tempo...

Economic Report Monitor #57 August 5th, 2020 The first of the jobs numbers came out today for July as the ADP Employment Report  was released before the market opened. The number largely disappointed with an increase of 167,000 in private payrolls, well below the June reading of 4.314 million and the expected number for July of 1.5 million. Based on the report, it seems that the resurgence of cases has influenced reopening processes to slow and in some cases stop completely. Larger companies lead the gains adding 129,000 jobs in July with medium businesses shedding -25,000 and small businesses adding 63,000. Small businesses probably only outperformed medium businesses because reopening processes are likely favoring operations with small numbers of employees working at a time. Businesses with only 1-19 employees, typically the most economically sensitive, added 45,000 jobs, the second-most behind businesses with 1,000+ at 111,000. The sectors that added the most jobs were in the s...