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Ugly inflation in services drives up the 3-month “core CPI” for 7th month, to 4.5% annualized, worst in a year, and the 3-month overall CPI to worst since Nov 2022. So inflation behaved very badly again in March. January was terrible, but it was kind of written off as maybe one of those January blips. […]
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And wages rose at a good clip too. It was the kind of jobs report we’d expect from an economy that is plugging along just fine, at growth rates that are above the long-run average, powered by drunken sailors all around: By consumers outspending inflation with gusto, especially on services, by the government spending trillions it borrows hand-over-fist, […]
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Biggest Price Drops from 2022 Peak: San Francisco, Seattle, Portland, Denver, Phoenix, Dallas, Las Vegas 20-City Index drops for 3rd month in a row, forming Double Top. Only Washington DC sets a new all-time high. The home price index for the 20 metros that the S&P CoreLogic Case-Shiller Home Price Index covers declined by 0.1% from […]
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Core services inflation dished up bad head fakes last time we had this mess in 1966-1982. Mention of a rate hike crops up in a Fed speech. Over the past year or so, the Fed has been intensely discussing inflation in “core services,” which is where inflation had shifted to in 2022, from goods inflation […]
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These double-tops are weird. Prices coming off the second top. Only Miami home prices hit a new high. The overall home price index for the 20 metros that today’s S&P CoreLogic Case-Shiller Home Price Index covers declined by 0.6% from the prior month, the second month in a row of declines. The index formed a double-top […]
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Inflation might not go back into the bottle voluntarily, and these mortgage rates – considered low in 1970-2000 – might stick around. The average conforming 30-year fixed mortgage rate rose to 7.0% in the latest week, according to the Mortgage Bankers Association today. The daily measure by Mortgage News Daily has been over 7% for days. These […]
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But that’s how inflation is, once out of the bottle: It serves up nasty surprises. We’ll start with the “core services” CPI (services minus energy services) because this is so crucial, and because Powell keeps talking about it. We have been concerned here for months about the refusal of core services inflation to ease off, and […]
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The economy grew solidly. The debt spiked. The US government debt is measured in “current dollars,” meaning: not adjusted for inflation. So we compare it to GDP in “current dollars,” not adjusted for inflation. The hope is that the current-dollar GDP, grew faster than the current-dollar debt so that the burden of the debt on […]
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Housing market is frozen, people have gone on buyers’ strike, and sellers are hoping that this too shall pass. The median price of existing single-family houses, condos, and co-ops in the US whose sales closed in December dropped to $382,600, down by 7.5% from the peak in June 2022, according to data from the National Association […]
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Armed with income increases that outran inflation by a wide margin in 2023, they continue to splurge, no matter what. Total retail sales jumped by 0.6% seasonally adjusted in December from November, and by 5.6% year-over-year, to $710 billion. Not seasonally adjusted, retail sales jumped to $771 billion, according to Census Bureau data today. Despite price drops […]
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Used vehicle prices at auctions fell another 0.5% in December from November, seasonally adjusted; and by 2.0%, not seasonally adjusted, according to the Manheim Used Vehicle Value Index today. Manheim is the largest auto auction house in the US and a unit of Cox Automotive. Its auction venues sell about 5 million vehicles a year. […]
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Down from 2022 highs: San Francisco -12%, Seattle -11%, Portland -6%; Denver, Phoenix, Las Vegas -5%; Dallas -4%, San Diego -2%, Los Angeles -1%. But new highs in 8 metros. Today’s S&P CoreLogic Case-Shiller Home Price Index for “October” is a three-month moving average of home prices whose sales were entered into public records in August, September, […]
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So far, vice chair Williams, Mester, Bostic twice already, and even Goolsbee who accused markets of wishful thinking. All heck re-broke loose in the markets last Wednesday after the Fed announced that it would keep its five interest rates steady, with the top at 5.5%, and with the “dot plot” in its Summary of Economic Projections […]
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They amount to 32% of Tier 1 capital and don’t matter, until they suddenly do. “Unrealized losses” on securities – mostly Treasury securities and government-guaranteed MBS – at FDIC-insured commercial banks at the end of Q3 jumped by $126 billion (or by 22%) from the prior quarter to $684 billion, according to the FDIC’s quarterly […]
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Higher for how much longer? “The extent of additional policy firming that may be appropriate… The FOMC voted unanimously to keep its five policy rates unchanged today, with the top of its policy rates at 5.50%, as had been broadly messaged in recent weeks in speeches by Fed governors. It was the second meeting in a […]
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The much-awaited and hoped-for slowdown in the second half turned into a drunken party in Q3. This was Fed Chair Jerome Powell’s reaction this morning when he saw the Q3 GDP report, as captured by cartoonist Marco Ricolli for WOLF STREET: In Q3, all our drunken sailors were at it together in one huge party – consumers, […]
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NAR, the Realtor lobbying group, demands its easy-money heroin back that the Fed has confiscated. The national median price of previously owned houses, condos, and co-ops fell to $394,300 in September, down by 4.7% from the peak 18 months ago, in June 2022, according to data from the National Association of Realtors (NAR) today. June is […]
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Or why auto insurance has gotten so ridiculously expensive — after used vehicles have gotten so ridiculously expensive. I’m going to lay out some crazy shocking numbers relating to used car prices, cost of repairs, insurance, and rental cars. This isn’t data, but it’s one incident that illustrates what we’ve discussed here for the past […]
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September Update: Spring Bounce Fades. 20-City Index -0.6% from Peak in 2022, Flat Year-over-Year. San Francisco -11% from the peak, Seattle -10%, followed by Las Vegas, Phoenix, Portland, Denver, Dallas, San Diego, Los Angeles, and Tampa. The S&P CoreLogic Case-Shiller Home Price Index, released today, for the 20 metros it covers ticked up 0.6% in […]
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Month-to-month CPI spikes, core CPI and core services CPI accelerate, despite ongoing massive health insurance adjustments. The Consumer Price Index (CPI) jumped by 0.63% in August from July, the biggest month-to-month increase since June 2022. Annualized, this amounts to a red-hot 7.8%. This jump comes despite the still ongoing ridiculous monthly adjustment to the health […]
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Editors’ Note: As the news rolls in of one EV disaster after another, the easy money and greed of Wall Street have to be examined. However, it also should be noted this is part of a government, top-down, problem of central planning. Politicians have a dream and if the dream does not comport with reality, […]
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Spiking Interest payments will hopefully, knock on wood, force the drunken sailors in Washington to go through detox. The gigantic US government debt is now approaching $33 trillion, amid a tsunami of issuance of Treasury securities to fund the mind-blowing government deficits and roll over maturing securities. At the same time, the Fed has hiked its […]
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He fretted about the re-accelerating economy flying above the “below-trend” growth required to get to 2%. “We will keep at it until the job is done.” The most important aspect of Fed Chair Jerome Powell’s speech today [8/25/23] at the Jackson Hole Symposium was his total and repeated smackdown of the folks that had either […]
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Mortgage applications to purchase a home: -40% from 2022 and 2019, 3rd worst week since 1995, behind only two weeks in February. The 7%+ mortgages are doing their magic on the housing market as they keep buyers out of the market, and home sales sagged further in late July and August, from already dismal levels, […]
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3rd Year-over-Year Price Drop in a Row. Monthly Increases Are “Just Seasonal”: Robert Shiller Home price rise since 2012 “may be coming to an end”: Shiller. Biggest YoY drops: Seattle, San Francisco, Las Vegas, Phoenix, San Diego, Portland, Denver, and Dallas. “Probably what’s happening with the increase in home prices, it’s just seasonal, it’s […]
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2nd Overall YoY Price Drop since 2012. Biggest in Seattle, San Francisco, Las Vegas, Phoenix, San Diego, Portland, Dallas… It’s spring selling season, when prices always rise month-to-month, and they did, but it wasn’t enough. It’s still spring selling season when sales volume and prices nearly always rise on a month-to-month basis, and they […]
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The driver: computer, electronic, and electrical manufacturing. The amount spent on building manufacturing plants in May in the US jumped by 73% from a year ago, and by 147% from May 2021, to $15.7 billion, according to Census Bureau data today. This by far outpaces the increase in construction costs (more on that in […]
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Debt doesn’t matter. Until it does. And now it does. The U.S. national debt spiked by $572 billion since the debt ceiling was suspended two weeks ago after the sarcastically named “Fiscal Responsibility Act of 2023” was signed into law, the Treasury Department reported Friday evening. The total government debt now exceeds $32.0 trillion […]
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A cleansing process, long overdue, to whittle down the corporate debt overhang and clear out deadwood, at the expense of investors. It’s turning into a banner year for corporate bankruptcy filings, after years of Easy Money that caused all kinds of excesses, fueled by yield-chasing investors, in an environment where the Fed had repressed […]
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It Sinks in that the Fed Won’t Cut Rates “Anytime Soon,” Mortgage Applications Plunge to 1995 Levels. Even Investors Pull Out. Spring selling season was a dud. But what comes next may be worse, that’s what mortgage applications and investors tell us. The 7% mortgages are back. The average interest rate on 30-year fixed-rate mortgages with conforming […]
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Not encouraging: core PCE price index refuses to come down, and has moved sideways since July last year. The inflation index favored by the Fed, the core PCE price index – which, by excluding the food and energy products, is a measure of underlying inflation – re-accelerated in April, as services inflation re-accelerated back into […]
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All-Cash sales plunge 22% as investors don’t feel like overpaying either. The 2023 version of the spring selling season is here. OK, it’s spring selling season, the famously best times of the year to sell a home, because that’s when prices rise and sales rise due to hot demand from home buyers who were […]
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Inflation Whac A Mole. Housing Inflation may be peaking at 8%+, but rents re-accelerated. The Consumer Price Index (CPI) for April, released today by the Bureau of Labor Statistics, was marked by a very unwelcome reversal in durable goods prices which suddenly jumped again month-to-month. This was driven by a spike in used vehicle prices. […]
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Even Miami lost ground. The spring selling season is a dud so far. And the banking crisis hasn’t even made it into the data yet. That’s still to come. The spring selling season is here, but so far, it’s a dud. In some markets, home prices fell from the prior month, despite spring selling […]
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The economy would muddle through, but in the markets, all heck would break loose. Here’s why. The issue is this: Since April 2022, the Fed has hiked its policy interest rates by 450 basis points, but consumer price inflation as measured by the “core” PCE price index – which excludes volatile food and energy products […]
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The government can manipulate the gross national debt to keep it below the debt ceiling while issuing new debt. But not for long. Then the game is over. Periodically, we get to watch our favorite farce, played out in Washington DC in front of a bedazzled world, a product of true creative genius that only […]
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Still -21% from a Year Ago, -25% from 2 & 3 Years Ago. Have a Look at the Chart. Spring selling season volume lowest since Housing Bust 1. So you read in the headlines today that pending home sales rose “unexpectedly” for the third month in a row, and that’s another sign that the boom […]
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An enormously important new regime gets engraved into central-bank handbooks. The ECB and Bank of England are also on board. It makes sense in this era of high inflation, QT, rising policy interest rates, and high financial fragility in the banking system, after years of money printing and interest rate repression. The new regime […]
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Some markets are already deep into it, and others just started. A sobering trip from the free-money decade in la-la-land, back to normal. The housing market in the United States has turned down, and in some big markets very dramatically so. Other markets lag a little behind. That’s how it went during the last Housing […]
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Prices of Existing Homes Fall 13% from Peak, on Lowest Sales since 2010 The market is still frozen, potential sellers sit on vacant properties, hoping this too shall pass. Cash Buyers, investors, and second-home buyers pull back further. In terms of closed sales, December and January usually mark the low point of the year for […]
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This takes some doing: San Francisco Bay Area house prices plunged faster from the peak than they’d spiked to the peak. Housing Bubble 2 continues to deflate relentlessly, no matter what data set we’re looking at. Today we got the S&P CoreLogic Case-Shiller Home Price Index for “November,” which is a three-month moving average of home sales […]
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It just keeps getting worse. Mortgage applications to purchase a home are a forward-looking indicator of where home sales volume will be. Existing home sales that closed in November already plunged by 35% year-over-year, the 16th month in a row of year-over-year declines, making for a historic plunge. And mortgage applications went in the wrong direction […]
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The Crazy Stuff & Asset Prices that arose during Easy Money are coming unglued as Easy Money ended. The era of money-printing and interest-rate repression in the United States, which started in 2008, gave rise to all kinds of stuff, and the easy money kept going and kept going, and all this money needed to […]
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To get rid of ballooning inventories amid spiking cancellations & plunging sales, builders try to sell to rental operations, but they pulled back too. If a homebuilder cannot sell their ballooning inventory of unsold new houses to households, at current prices and mortgage rates, amid plunging sales and soaring cancellation rates of signed contracts – topping out […]
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Automakers need to do some serious navel-gazing about price levels and going upscale, if they want to sell more vehicles. To illustrate the data we’re going to look at in a moment, I “built” a 2023 model year F-250 Lariat on Ford’s website: MSRP $104,070. I could build something more expensive in the F-350 lineup. […]
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Deflating Everywhere, Fastest in San Francisco & Seattle. Phoenix & Dallas Roll Over Too In several markets, prices plunged even faster than they’d spiked. From the peak in May, house prices in the San Francisco Bay Area dropped by 11.6%, in the metros of Seattle by 11.3%, San Diego by 7.9%, Los Angeles by […]
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Sellers are struggling with denial: Priced “right,” a home will sell, but “right” is where the buyers are, and they’re a lot lower. Sales of all types of previously owned homes – houses, condos, and co-ops – fell by 5.9% in October from September, the ninth month in a row of declines, to a seasonally adjusted […]
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Big drops in San Diego, Los Angeles, Dallas, Portland, Phoenix, Boston. Prices going down faster than they’d spiked? No way. Oops. This is the first month in this cycle that the S&P CoreLogic Case-Shiller Home Price Index, which lags reality on the ground by 4-6 months, is showing house price declines in all the metros in […]
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Holy-moly mortgage rates of 7% slash demand for new houses due to super-inflated prices, but prices are now coming down. Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, […]
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Beneficiaries got whacked over the head in 2021 and 2022 by raging inflation that outran the COLAs. Among the raging and worse-than-expected inflation data released today was the Consumer Price Index for All Urban Wage Earners and Clerical Workers (CPI-W), which the Social Security Administration uses to calculate the Cost-of-Living Adjustment (COLA) for Social Security benefits. […]