Economic Activity Above Trend
- Mar 25, 2014
Black Knight Financial Services (formerly the LPS) released its latest Home Price Index report on Monday, which is based on January 2014 residential real estate transactions. There was no increase nor decrease month over month. Since last year, the index increased 8 percent, a slight drop in the rate from recent months.
The Black Knight index combines the company’s property and loan-level databases to produce an analysis of home prices for each of more than 18,500 U.S. zip codes. The index represents the price of non-distressed sales by taking into account price discounts for REO and short sales. Black Knight also released data for the 20 largest states, and 40 MSAs, on Monday. Prices were up in 10 of the 20 largest states in January, dropped in eight, and didn’t move in two.
Separately, the company reported that nearly 1 million fewer loans are non-current this February than a year ago, with the share of loans in foreclosure down over 34 percent year over year; foreclosure starts dropped 30 percent compared with this time last year. Mississippi, New Jersey and Florida have highest rates of non-current loans.
Chicago Fed Reports Economic Activity Above Trend
The Chicago Federal Reserve Bank of Chicago said on Monday that the Chicago Fed National Activity Index (CFNAI) increased to +0.14 in February from –0.45 in January, led by improvements in production-related indicators. The CFNAI is a monthly index designed to gauge overall U.S. economic activity and related inflationary pressure.
The index’s three-month moving average, the ponderously named CFNAI-MA3, decreased to –0.18 in February from +0.02 in January, marking its first reading below zero in six months. These numbers suggest that growth in national economic activity was just below its historical trend. It also suggests, the central bank points out, that there won’t be much inflation this year.
The CFNAI is a weighted average of 85 monthly economic indicators, with a positive index reading meaning that growth is above trend and a negative index reading corresponding to growth below trend. The 85 indicators included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.
Wall Street had a down day on Monday, with the Dow Jones Industrial Average dropping 26.08 points, or 0.16 percent. The S&P 500 was down 0.49 percent and the Nasdaq declined 1.18 percent.