by Calculated Risk on 2/08/2025 02:11:00 PM
Saturday, February 08, 2025
Real Estate Newsletter Articles this Week: Mortgage Delinquencies Increased Slightly in Q4 2024
At the Calculated Risk Real Estate Newsletter this week:
Click on graph for larger image.
• MBA: Mortgage Delinquencies Increased Slightly in Q4 2024
• Fannie and Freddie: Single Family Serious Delinquency Rates Increased in December
• Lawler: Revisions Almost Eliminate Household/Establishment Survey Employment Growth Gap
• 1st Look at Local Housing Markets in January
• Asking Rents Mostly Unchanged Year-over-year
• ICE Mortgage Monitor: “Lowest calendar year home price growth of any year since 2011”
This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.
Schedule for Week of February 9, 2025
by Calculated Risk on 2/08/2025 08:11:00 AM
The key reports this week are January CPI and Retail sales.
For manufacturing, the January Industrial Production report will be released this week.
Fed Chair Powell presents the Semiannual Monetary Policy Report to the Congress on Tuesday and Wednesday.
No major economic releases scheduled.
6:00 AM: NFIB Small Business Optimism Index for January.
10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to Congress, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.
8:30 AM: The Consumer Price Index for January from the BLS. The consensus is for 0.3% increase in CPI, and a 0.3% increase in core CPI. The consensus is for CPI to be up 2.9% year-over-year and core CPI to be up 3.2% YoY.
10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to Congress, Before the U.S. House Financial Services Committee
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 224 thousand from 219 thousand last week.
8:30 AM ET: The Producer Price Index for January from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI.
11:00 AM: NY Fed: Q4 Quarterly Report on Household Debt and Credit
This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).
This graph shows industrial production since 1967.
The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 77.7%.
Friday, February 07, 2025
February 7th COVID Update: COVID in Wastewater Increasing
by Calculated Risk on 2/07/2025 07:20:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
COVID Metrics | ||||
---|---|---|---|---|
Now | Week Ago | Goal | ||
Deaths per Week🚩 | 940 | 819 | ≤3501 | |
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met. |
This graph shows the weekly (columns) number of deaths reported since Jan 2023.
Wholesale Used Car Prices Increased in January; Up 0.8% Year-over-year
by Calculated Risk on 2/07/2025 04:15:00 PM
From Manheim Consulting today: Wholesale Used-Vehicle Prices Increased in January
Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) moved 0.4% higher in January compared to December, causing the Manheim Used Vehicle Value Index (MUVVI) to increase to 205.6, a gain of 0.8% from a year ago. The seasonal adjustment to the index muted the movement for the month, as non-seasonally adjusted values rose faster than seasonally adjusted values. The non-adjusted price in January increased by 0.6% compared to December, moving the unadjusted average price up 1.1% year over year.
emphasis added
This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.
Lawler: Revisions Almost Eliminate Household/Establishment Survey Employment Growth Gap
by Calculated Risk on 2/07/2025 01:17:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Lawler: Revisions Almost Eliminate Household/Establishment Survey Employment Growth Gap
A brief excerpt:
From housing economist Tom Lawler: Revisions Almost Eliminate Household/Establishment Survey Employment Growth GapThere is much more in the article.
Over the last few years there has been a sizable gap between trend growth in the Household Survey estimate of employment and the Establishment Survey estimate of employment, with the Household Survey showing significantly slower growth than the Establishment Survey. I and others noted that much of this “gap” reflected the fact that previous estimates from the Household Survey were “benchmarked” to population estimates that for the last few years were way to low because of an underestimate of net international migration, and that updated population estimates (Vintage 2024) that massively revised up NIM over the last few years would result in a huge upward revision in the household estimate of employment in the January Employment Report.
In today’s employment report the BLS said updated population controls resulted in an huge increase in the Household Survey estimate of employment for December 2024 of 2 million (1.2%).
At the same time, the BLS reported that its annual benchmarking of the Establishment Survey resulted in a decline in the seasonally-adjusted estimate of nonfarm payroll employment for March 2024 of 598,000 (-0.4%).
As a result of these two revisions, the “gap” between the Household Survey of employment and the Establishment Survey estimate of employment – after adjusting for definitional differences – has narrowed substantially.
1st Look at Local Housing Markets in January
by Calculated Risk on 2/07/2025 10:53:00 AM
Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in January
A brief excerpt:
NOTE: The tables for active listings, new listings and closed sales all include a comparison to January 2019 for each local market (some 2019 data is not available).There is much more in the article.
This is the first look at several early reporting local markets in January. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Closed sales in January were mostly for contracts signed in November and December when 30-year mortgage rates averaged 6.81% and 6.72%, respectively (Freddie Mac PMMS). This was an increase from the average rate for homes that closed in November, but down from the average rate of 7.1% in November and December 2023.
...
In January, sales in these markets were up 6.4% YoY. Last month, in December, these same markets were up 17.1% year-over-year Not Seasonally Adjusted (NSA).
Note that most of these early reporting markets have shown stronger year-over-year sales than most other markets for the last several months.
Important: There were the same number of working days in January 2025 (21) as compared to January 2024 (21). So, the year-over-year change in the headline SA data will be similar to the NSA data (there are other seasonal factors).
...
This was just several early reporting markets. Many more local markets to come!
Comments on January Employment Report
by Calculated Risk on 2/07/2025 09:18:00 AM
The headline jobs number in the January employment report was below expectations, however, November and December payrolls were revised up by 100,000 combined. The participation rate and the employment population ratio increased, and the unemployment rate decreased to 4.0%.
Prime (25 to 54 Years Old) Participation
The 25 to 54 years old participation rate decreased in January at 83.5% from 83.4% in December.
Average Hourly Wages
Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.1% YoY in January.
Part Time for Economic Reasons
"The number of people employed part time for economic reasons, at 4.5 million, changed little in January. These individuals would have preferred full-time employment but 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 4.48 million from 4.36 million in December. This is close to the pre-pandemic levels.
These workers are included in the alternate measure of labor underutilization (U-6) that was unchanged at 7.5% from 7.5% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).
Unemployed over 26 Weeks
According to the BLS, there are 1.44 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.51 million the previous month.
This is above pre-pandemic levels.
Job Streak
Headline Jobs, Top 10 Streaks | ||
---|---|---|
Year Ended | Streak, Months | |
1 | 2020 | 113 |
2 | N/A | 491 |
3 | 1990 | 48 |
4 | 2007 | 46 |
5 | 1979 | 45 |
6 tie | 1943 | 33 |
6 tie | 1986 | 33 |
6 tie | 2000 | 33 |
9 | 1967 | 29 |
10 | 1995 | 25 |
1Currrent Streak |
Summary:
The headline jobs number in the January employment report was below expectations, however, November and December payrolls were revised up by 100,000 combined. The participation rate and the employment population ratio increased, and the unemployment rate decreased to 4.0%.
January Employment Report: 143 thousand Jobs, 4.0% Unemployment Rate
by Calculated Risk on 2/07/2025 08:30:00 AM
From the BLS: Employment Situation
Total nonfarm payroll employment rose by 143,000 in January, and the unemployment rate edged down to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in 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 49,000, from +212,000 to +261,000, and the change for December was revised up by 51,000, from +256,000 to +307,000. With these revisions, employment in November and December combined is 100,000 higher than previously reported.
emphasis added
The first graph shows the jobs added per month since January 2021.
Payrolls for November and December were revised up 100 thousand, combined.
In January, the year-over-year change was 2.02 million jobs. Employment was up solidly year-over-year.
The third graph shows the employment population ratio and the participation rate.
The Employment-Population ratio increased to 60.1% from 60.0% in December (blue line).
I'll post the 25 to 54 age group employment-population ratio graph later.
The unemployment rate decreased to 4.0% in January from 4.1% in December.
This was below consensus expectations; however, November and December payrolls were revised up by 100,000 combined.
The seasonally adjusted total nonfarm employment level for March 2024 was revised downward by 589,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2024 was revised downward by 598,000, or -0.4 percent. Not seasonally adjusted, the absolute average benchmark revision over the past 10 years is 0.1 percent.I'll have more later ...
Thursday, February 06, 2025
Friday: Employment Report
by Calculated Risk on 2/06/2025 07:48:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
Friday:
• At 8:30 AM: Employment Report for December. The consensus is for 170,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.
NOTE: For the household survey, new population controls will be used - and this will boost overall household employment. For the establishment survey, the annual benchmark revision will be included, lowering past job growth.
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for January).
Predicting the Next Recession
by Calculated Risk on 2/06/2025 05:39:00 PM
In that post, I noted that the next recession would likely be caused by one of the following:
• "An exogenous event such as a pandemic, significant military conflict, disruption of energy supplies for any reason, a major natural disaster (meteor strike, super volcano, etc), and a number of other low probability reasons. All of these events are possible, but they are unpredictable, and the probabilities are low that they will happen in the next few years or even decades." emphasis added
Unfortunately, in 2020, one of those low probability events happened (pandemic), and that led to a recession in 2020. Another exogenous event is possible, but unpredictable.
During the previous Trump administration, we saw several policy errors, like the failed TCJA (Tax Cut and Jobs Act), but none that were significant enough to take the economy into a recession (I stayed positive on the economy back then).