by Calculated Risk on 11/23/2023 08:47:00 AM

Here are five economic reasons to be thankful this Thanksgiving. (Hat Tip to Neil Irwin who started doing this years ago)

1) The Unemployment Rate is Below 4%

The unemployment rate was at 3.9% in October. The unemployment rate is down from 14.7% in April 2020 (the highest since the Great Depression).

The unemployment rate is up from 3.7% a year ago (October 2022). 

This was up from 3.4% in April 2023 - and that matched the lowest unemployment rate since 1969!

2) Low unemployment claims.

This graph shows the 4-week moving average of weekly claims since 1971.

Weekly claims were at 209,000 last week.

The dashed line on the graph is the current 4-week average.

Even though weekly claims have bounced around a little recently, the 4-week average is close to the lowest level in 50 years.

3) Inflation is Decreasing

This graph shows the year-over-year change in three measures of inflation since 1970: CPI, Core CPI, and Core CPI ex-shelter.  

CPI was up 3.2% YoY in October, down from the recent peak of 8.9%.  

Core CPI was up 4.0% YoY, and Core CPI ex-shelter was up 2.0% YoY in October.

Overall inflation is moving back to the Fed's 2% target.

4) Mortgage Delinquency Rate Near the Lowest Level since at least 1979

This graph, based on data from the MBA through Q3 2023, shows the percent of loans delinquent by days past due.  Even though delinquencies increased in Q3, mortgage delinquencies were near the lowest level since the MBA survey started in 1979.

Note: The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process decreased year-over-year in Q3 even with the end of the foreclosure moratoriums and are historically low.

5) Household Debt burdens at Low Levels

This graph, based on data from the Federal Reserve, shows the Total Debt Service Ratio (DSR), and the DSR for mortgages (blue) and consumer debt (yellow).

The Household debt service ratio was at 13.2% in 2007 and has fallen to under 10% now., and the DSR for mortgages (blue) are near the lowest level for the last 35 years.  

This data suggests aggregate household cash flow is in a solid position.

Happy Thanksgiving to All!