by Calculated Risk on 2/03/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Case-Shiller: National House Price Index Up 5.1% year-over-year in November

• Inflation Adjusted House Prices 2.3% Below Peak

• Asking Rents Mostly Unchanged Year-over-year

• Fannie and Freddie: Single Family Serious Delinquency Rate Increased Slightly, Multi-family Unchanged in December

• Freddie Mac House Price Index Increased in December; Up 6.6% Year-over-year

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 2/03/2024 08:11:00 AM

This will be light week for economic data. 

The key report this week is the December trade deficit.

----- Monday, February 5th -----
10:00 AM: ISM Services Index for January.

2:00 PM: Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS).

----- Tuesday, February 6th -----
8:00 AM ET: Corelogic House Price index for December.

11:00 AM: NY Fed: Q4 Quarterly Report on Household Debt and Credit

----- Wednesday, February 7th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Trade Balance report for December from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $62.3 billion.  The U.S. trade deficit was at $63.2 billion in November.

----- Thursday, February 8th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 220 thousand initial claims, down from 224 thousand last week.

----- Friday, February 9th -----
8:30 AM: Updated Seasonal Factors for CPI (January 2019 through December 2023)

by Calculated Risk on 2/02/2024 07:02:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Due to changes at the CDC, weekly cases are no longer updated.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Hospitalizations have more than quadrupled from a low of 5,150 in June 2023.

Hospitalizations are now declining.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	21,659	25,041	≤3,0001
Deaths per Week2🚩	2,258	2,076	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Weekly deaths have more than quadrupled from a low of 485 in early July.  Still weekly deaths are far below the weekly peak of 26,000 in January 2021.

And here is a graph I'm following on COVID in wastewater as of Jan 25th:

This appears to be a leading indicator for COVID hospitalizations and deaths.

Nationally, COVID in wastewater is now off about 40% of the holiday peak at the end of December, and that suggests weekly deaths will start to decrease soon. The South region is at a new peak for COVID in wastewater.

by Calculated Risk on 2/02/2024 03:18:00 PM

From Goldman:

We left our Q1 GDP tracking estimate unchanged on net at +2.8% (qoq ar) and our Q1 domestic final sales estimate also unchanged at +3.2%. [Feb 2nd estimate]emphasis added

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 4.2 percent on February 1, up from 3.0 percent on January 26. [Feb 1st estimate]

by Calculated Risk on 2/02/2024 11:59:00 AM

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through December 2023, except CoreLogic is through November and Apartment List is through January 2024.

The CoreLogic measure is up 2.7% YoY in November, up from 2.5% in October, and down from a peak of 13.9% in April 2022.

The Zillow measure is up 3.3% YoY in December, mostly unchanged from 3.3% YoY in November, and down from a peak of 16.1% YoY in March 2022.

The ApartmentList measure is down 1.0% YoY as of January, unchanged from -1.10% in December, and down from a peak of 18.2% YoY November 2021.
...
OER and CPI shelter will decline further in the CPI release this month.

There is much more in the article.

by Calculated Risk on 2/02/2024 09:28:00 AM

This was a very strong report; however, the benchmark revision showed job growth was slower over the last year than originally reported. Including revisions:  The 3.06 million jobs added in 2023 was the 17th best year for job growth in US history (out of 84 years) following the two best years on record (2021 and 2022).

The headline jobs number in the January employment report was well above expectations, and November and December payrolls were revised up by 126,000 combined.  The participation rate was unchanged, the employment population ratio increased, and the unemployment rate was unchanged at 3.7%.

Leisure and hospitality gained 11 thousand jobs in January.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 75 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 99% all of the jobs lost in March and April 2020. 

Construction employment increased 11 thousand and is now 522 thousand above the pre-pandemic level. 

Manufacturing employment increased 23 thousand jobs and is now 199 thousand above the pre-pandemic level.

Earlier: January Employment Report: 353 thousand Jobs, 3.7% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate increased in January to 83.3% from 83.2% in December, and the 25 to 54 employment population ratio increased to 80.6% from 80.4% the previous month.

Both are close to the pre-pandemic levels.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has mostly trended down after peaking at 5.9% YoY in March 2022 and was at 4.5% YoY in January.   

Part Time for Economic Reasons

From the BLS report:

"In January, the number of people employed part time for economic reasons, at 4.4 million, changed little. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in January to 4.42 million from 4.21 million in December. This is slightly above pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.2% from 7.1% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is close to the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.277 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.245 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is close to pre-pandemic levels.

Job Streak

Through January 2024, the employment report indicated positive job growth for 37 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	37
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline monthly jobs number was well above consensus expectations, and November and December payrolls were revised up by 126,000 combined.  The annual benchmark revision indicated job growth was lower than originally reported. The participation rate was unchanged, the employment population ratio increased, and the unemployment rate was unchanged at 3.7%.

A strong employment report.

by Calculated Risk on 2/02/2024 08:30:00 AM

From the BLS:

Total nonfarm payroll employment rose by 353,000 in January, and the unemployment rate remained at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.
...
The change in total nonfarm payroll employment for November was revised up by 9,000, from +173,000 to +182,000, and the change for December was revised up by 117,000, from +216,000 to +333,000. With these revisions, employment in November and December combined is 126,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 353 thousand in January.  Private payrolls increased by 317 thousand, and public payrolls increased 36 thousand.

Payrolls for November and December were revised up 126 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In January, the year-over-year change was 2.93 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was unchanged at 62.5% in January, from 62.5% in December. This is the percentage of the working age population in the labor force.

The Employment-Population ratio increased to 60.2% from 60.41% (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was unchanged at 3.7% in January from 3.7% in December.

This was well above consensus expectations and November and December payrolls were revised up by 126,000 combined.  

On the annual benchmark revision:

The seasonally adjusted total nonfarm employment level for March 2023 was revised downward by 266,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2023 was revised downward by 187,000, or -0.1 percent. Not seasonally adjusted, the absolute average benchmark revision over the past 10 years is 0.1 percent.

I'll have more later ...

by Calculated Risk on 2/01/2024 08:39:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, 8:30 AM: Employment Report for December.   The consensus is for 162,000 jobs added, and for the unemployment rate to increase to 3.8%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for January).

by Calculated Risk on 2/01/2024 05:05:00 PM

Wards Auto released their estimate of light vehicle sales for January: U.S. Light-Vehicle Sales Soften in January After December's Strength (pay site).

Causes for the month’s weaker results could have included some payback for December’s surge. However, affordability and inventory likely played roles, as availability remains well below historically normal levels for a market running at a 15-million-plus annualized rate, and at the same time interest rates for financing purchases are at long-time highs, the mix on dealer lots is weighted toward higher priced vehicles.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for January (red).

Sales in January (15.0 million SAAR) were down 5.2% from December, and down 0.7% from January 2023.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Vehicle sales are usually a transmission mechanism for Federal Open Market Committee (FOMC) policy, although far behind housing.  This time vehicle sales were more suppressed by supply chain issues and are up year-over-year.

Sales in January were below the consensus forecast.

by Calculated Risk on 2/01/2024 04:53:00 PM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View — Data Week Ending January 27, 2024

• Active inventory increased, with for-sale homes 10.1% above year ago levels. For a 12th consecutive week, active listings registered above prior year level, which means that today’s home shoppers have more homes to choose from that aren’t already in the process of being sold. The added inventory has certainly improved conditions from this time one year ago, but overall inventory is still low. For the month as a whole, January inventory is down nearly 40% below 2017 to 2019 levels..

• New listings–a measure of sellers putting homes up for sale–were up this week, by 2.1% from one year ago. Newly listed homes were above last year’s levels for the 14th week in a row. While the jump was not as big as seen in recent weeks, further improvement in new listings will help contribute to a recovery in active listings meaning more options for home shoppers.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 12th consecutive week following 20 consecutive weeks with a YoY decrease in inventory.  

Inventory is still historically very low.

New listings really collapsed a year ago, so the YoY comparison for new listings is easier now - although new listings remain well below "typical pre-pandemic levels", new listings are now up YoY for the 14th consecutive week.