by Calculated Risk on 4/08/2025 02:17:00 PM

Note: I've received a number of requests to post this again after the start of President Trump's 2nd term.  So here is another update of tracking employment during Presidential terms.  We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter, George H.W. Bush, and Biden only served one term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.

There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr. Clinton (light blue) served for eight years without a recession.   There was a pandemic related recession in 2020.

First, here is a table for private sector jobs for each term. (Blue for Democrats, Red for Republicans)

Term	Private Sector Jobs Added (000s)
Biden	14,327
Clinton 1	10,875
Clinton 2	10,104
Obama 2	9,924
Reagan 2	9,351
Carter	9,039
Reagan 1	5,363
Obama 1	1,889
GHW Bush	1,507
GW Bush 2	453
Trump 2	3251
GW Bush 1	-822
Trump 1	-2,178
1Through 2 months

Click on graph for larger image.

The first graph is for private employment only.

Private sector employment increased by 9,039,000 under President Carter (dashed green), by 14,714,000 under President Reagan (dark red), 1,507,000 under President G.H.W. Bush (light purple), 20,979,000 under President Clinton (light blue), lost 369,000 under President G.W. Bush, and gained 11,813,000 under President Obama (dark dashed blue).  During President Trump's terms (Orange), the economy has lost 1,853,000 private sector jobs.

 A big difference between the presidencies has been public sector employment.  Note: the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, 2010 and 2020. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).  However, the public sector declined significantly while Mr. Obama was in office (down 263,000 jobs).  During Mr. Trump's terms, the economy lost 517,000 public sector jobs (mostly teachers during the pandemic).

And a table for public sector jobs. Public sector jobs increased have increased the most during Biden's term (mostly state and local employment), ahead of the number during Reagan's 2nd term.  Public sector jobs declined the most during Obama's first term.

Term	Public Sector Jobs Added (000s)
Biden	1,813
Reagan 2	1,438
Carter	1,304
Clinton 2	1,242
GHW Bush	1,127
GW Bush 1	900
GW Bush 2	844
Clinton 1	692
Obama 2	447
Trump 2	201
Reagan 1	-24
Trump	-537
Obama 1	-710
1Through 2 months

by Calculated Risk on 4/08/2025 10:40:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in March

A brief excerpt:

This is the first look at several early reporting local markets in March. 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 March were mostly for contracts signed in January and February when 30-year mortgage rates averaged 6.96% and 6.84%, respectively (Freddie Mac PMMS). This was an increase from the average rate for homes that closed in February. This was before the recent surge in economic uncertainty and stock market volatility that might impact existing home sales.
...
In March, sales in these markets were down 0.7% YoY. Last month, in February, these same markets were down 4.2% 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 March 2025 (21) as in March 2024 (21). So, the year-over-year change in the headline SA data will be close to the change in the NSA data (there are other seasonal factors).
...
This was just several early reporting markets. Many more local markets to come!

There is much more in the article.

by Calculated Risk on 4/08/2025 08:13:00 AM

From Dodge Data Analytics: Dodge Momentum Index Declines 7% in March

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, receded 6.9% in March to 205.6 (2000=100) from the revised February reading of 220.9. Over the month, commercial planning declined 7.8% while institutional planning fell 5.0%.

“Increased uncertainty around material prices and fiscal policies may have begun to factor into planning decisions throughout March,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “While planning data has weakened across most nonresidential sectors this month, activity remains considerably higher than year-ago levels and still suggests steady construction activity in mid-2026.”

On the commercial side, weaker planning activity for warehouses, data centers and retail stores drove this month’s decline. Meanwhile, hotel and office planning continued to accelerate. On the institutional side, planning activity slowed for education, healthcare and government buildings. In March, the DMI was up 30% when compared to year-ago levels. The commercial segment was up 32% from March 2024. The institutional segment was up 27% over the same period, following a very weak March last year. The influence of data centers on the DMI this year remains substantial. If we remove all data center projects between 2023 and 2025, commercial planning would be up 4% from year-ago levels, and the entire DMI would be up 12%. While momentum decelerated for data centers this month, levels of activity remain very high.
...
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 205.6 in March, down from 220.9 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This index suggests a pickup in mid-2025, however, uncertainty might impact these projects.  

Commercial construction is typically a lagging economic indicator.

by Calculated Risk on 4/07/2025 07:20:00 PM

From Matthew Graham at Mortgage News Daily: Worst 24 Hours For Rates So Far This Year

While there was certainly some volatility surrounding news headlines that were less than credible (specifically, that Trump was considering a 90 day pause on Tariffs), bonds maintained steady selling pressure all day.

As a result, mortgage lenders were under progressive pressure to bump today's mortgages rates higher several times. The net effect is that we've moved from 2025's lowest rates to highest since late February in the space of 24 hours. That said, today's highs are right in line with many other days from the past several weeks. [30 year fixed 6.82%]
emphasis added

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for March.

by Calculated Risk on 4/07/2025 03:15:00 PM

From Manheim Consulting today: Manheim Used Vehicle Value Index Shows Seasonal Decline in March Despite Strong Market Demand

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were lower in March compared to February. The Manheim Used Vehicle Value Index (MUVVI) declined to 202.6, which is a decrease of 0.2% from a year ago and also lower than the February levels. The seasonal adjustment caused the index to decline for the month, as non-seasonally adjusted values rose but not enough to account for the normal seasonal move. The non-adjusted price in March increased by 2.7% compared to February, moving the unadjusted average price up 0.4% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices decreased in March (seasonally adjusted) and were down 0.2% YoY.

The tariffs will likely make imported used cars more attractive.

by Calculated Risk on 4/07/2025 12:28:00 PM

Today, in the Real Estate Newsletter: ICE Mortgage Monitor: Home Prices Continue to Cool

Brief excerpt:

Note: I made a mistake last week and posted this prior to the embargo lifting. My apologies to Intercontinental Exchange and all my readers.

House Price Growth Continues to Slow

Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. ICE reports the median price change of the repeat sales. The index was up 2.7% year-over-year in February, down from 3.4% YoY in January.

• Home price growth is beginning to cool as modestly improved demand is running up against higher levels of inventory across most major markets

• The annual home price growth rate dipped to +2.7% in February from +3.4% the month prior, marking the sharpest single month of deceleration in the annual home price growth rate since early 2023, 2023, with an early look at March data via ICE's enhanced Home Price Index suggesting that price growth has cooled further to +2.2%

• On a seasonally adjusted basis, home prices rose by +0.11% in the month, equivalent to a seasonally adjusted annualized rate of +1.3%, the softest such growth in five months

• In simple terms, that means that if the current rate of monthly growth we’ve seen in recent months were to persist, it would result in annual home price growth continuing to slow as we make our way through Q1 and into Q2 2025

There is much more in the mortgage monitor.

There is much more in the newsletter.

by Calculated Risk on 4/07/2025 10:04:00 AM

Early in February, I expressed my "increasing concern" about the negative economic impact of "executive / fiscal policy errors", however, I concluded that post by noting that I was not currently on recession watch.

Now I am on recession watch, but still not yet predicting a recession for several reasons: the U.S. economy is very resilient and was on solid footing at the beginning of the year, the administration might reverse many of the tariffs (we've seen that before), and Congress might take back complete authority for tariffs.  Also, perhaps these tariffs are not enough to topple the economy.

Over the weekend, Goldman Sachs economists put out a note: Countdown to Recession

"If most of the April 9 tariffs do take effect, then the effective tariff rate will rise by an estimated 20pp once those increases and likely sectoral tariffs take effect, even allowing for some country-specific agreements at a later date. If so, we expect to change our forecast to a recession."

Here is some of the data I'm watching.  

Housing:  Housing is the basis of one of my favorite models for business cycle forecasting.  This graph uses new home sales, single family housing starts and residential investment.  (I prefer single family starts to total starts).   The purpose of this graph is to show that these three indicators generally reach peaks and troughs together. Note that Residential Investment is quarterly and single-family starts and new home sales are monthly.

Click on graph for larger image.

The arrows point to some of the earlier peaks and troughs for these three measures - and the most recent peak.

New home sales peaked in 2020 as pandemic buying soared.  Then new home sales and single-family starts turned down in 2021, but that was partly due to the huge surge in sales during the pandemic.   In 2022, both new home sales and single-family starts turned down in response to higher mortgage rates.   

This decline in residential investment would typically have suggested that a recession was coming, however I looked past the pandemic distortions and correctly predicted no recession!  The low level of existing home inventory led me to predict that new home sales would pick up - and that happened.  This is a reminder that we can't be a slave to any model.

This second graph shows the YoY change in New Home Sales from the Census Bureau.  Currently new home sales (based on 3-month average of NSA data) are down 4% year-over-year.

Usually when the YoY change in New Home Sales falls about 20%, a recession will follow.  An exception for this data series was the mid '60s when the Vietnam buildup kept the economy out of recession.   Another exception was in late 2021 - we saw a significant YoY decline in new home sales related to the pandemic and the surge in new home sales in the second half of 2020.  I ignored that downturn as a pandemic distortion.  Also note that the sharp decline in 2010 was related to the housing tax credit policy in 2009 - and was just a continuation of the housing bust.

The YoY change in new home sales in late 2022 and early 2023 suggested a possible recession.  But as I noted earlier, I was able to look past the pandemic distortion and was able to predict a pickup in new home sales due to the low level of existing home inventory and because homebuilders could offer mortgage incentives that would somewhat offset the sharp increase in mortgage rates.

There are no special circumstances now, and if this measure falls to off 20% a recession seems likely.

Yield Curve: The yield curve is a commonly used leading indicator.  I dismissed it when the yield curve inverted in 2019 and again in 2022. Both times dismissing the yield curve was correct (the recession in 2020 was obviously due to the pandemic, so we will never know if the yield curve failed to predict a recession in 2019).

Here is a graph of 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity from FRED since 1976.

 

The yield curve reverted to normal last year and is currently slightly positive at 0.33.  If this inverts, this might suggest a recession is coming.

Click here for interactive graph at FRED.

Heavy Truck (and Vehicle Sales): Another indicator I like to use is heavy truck sales.  This graph shows heavy truck sales since 1967 using data from the BEA. he dashed line is the March 2025 seasonally adjusted annual sales rate (SAAR) of 403 thousand. Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Heavy truck sales were at 403 thousand SAAR in March, down from 436 thousand in February, and down 12.1% from 459 thousand SAAR in February 2025.

Usually, heavy truck sales decline sharply prior to a recession. Perhaps heavy truck sales will be revised up, but sales in March were somewhat weak.

On the other hand, light vehicle sales were strong in March.  

This graph shows light vehicle sales since the BEA started keeping data in 1967.   This is more of a concurrent indicator than heavy trucks. 

Light vehicle sales surged to 17.77 million SAAR in March, up 11.0% from February, and up 13.3% from March 2024 as some buyers rushed to beat the tariffs.

Unemployment: Two other concurrent indicators are the unemployment rate (using the "Sahm Rule") and weekly unemployment claims.

Here is a graph of the Sahm rule from FRED since 1959.

The rule was triggered in 2024 (slightly), but Dr. Claudia Sahm said at the time:

“I am not concerned that, at this moment, we are in a recession,” she told Fortune ... “This time really could be different,” Sahm said. “[The Sahm Rule] may not tell us what it’s told us in the past, because of these swings from labor shortages, with people dropping out of the labor force, to now having immigrants coming lately. That all can show up in changes in the unemployment rate, which is the core of the Sahm Rule.”

And weekly unemployment claims always rise sharply at the beginning of a recession (other events - like hurricane Katrina - can cause a temporary spike in weekly claims).

As I noted earlier, I'm not sure how to estimate the economic damage caused by these tariffs. And they might just go away (no one knows).  There are also boycotts of U.S. goods and less international tourism based on both the tariffs and the inflammatory rhetoric of the new administration.  

For now, I'll focus on the leading indicators (especially housing) and I'll update this post monthly while I'm on recession watch.  

by Calculated Risk on 4/07/2025 08:11:00 AM

Altos reports that active single-family inventory was up 2.3% week-over-week.

Inventory is now up 10.7% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 4% or 5% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal pickup in inventory.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 34.7% compared to the same week in 2024 (last week it was up 30.6%), and down 17.4% compared to the same week in 2019 (last week it was down 19.0%). 

Inventory will pass 2020 levels soon, and it now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of April 4th, inventory was at 691 thousand (7-day average), compared to 676 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 4/06/2025 06:11:00 PM

Weekend:
• Schedule for Week of April 6, 2025

• Recession Watch

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 200 and DOW futures are down 1,200 (fair value).

Oil prices were down over the last week with WTI futures at $61.99 per barrel and Brent at $65.58 per barrel. A year ago, WTI was at $88, and Brent was at $93 - so WTI oil prices are down about 25% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.21 per gallon. A year ago, prices were at $3.57 per gallon, so gasoline prices are down $0.36 year-over-year.

by Calculated Risk on 4/06/2025 08:56:00 AM

From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission.

Recent changes in U.S. trade policy represent a notable shift from previous approaches. These developments will affect multiple sectors, including freight rail, where global trade accounts for approximately 38% of unit volume and 37% of total revenue. Even in stable times, railroads must constantly adjust to evolving economic conditions; they are operationally equipped to adapt to this latest round of policy change as well.

At present, rail traffic is holding steady. While some “soft” economic indicators, such as consumer confidence, have weakened in recent months, many “hard” economic metrics—including job gains, unemployment, and consumer spending—remain resilient. That continued strength has supported modest gains in rail volumes. That said, manufacturing remains mired in a prolonged period of weakness, limiting growth in several carload categories.
emphasis added

Click on graph for larger image.

This graph from the AAR shows their index ("The AAR’s Freight Rail Index (FRI) is defined as intermodal plus carloads excluding coal and grain. We exclude coal and grain because their carloads tend to rise or fall for reasons that have little to do with what’s going on in the broader economy.")

U.S. railroads originated 906,253 total carloads in March 2025, up 4.5% (39,342 carloads) over last March and the third year-over-year increase in total carloads over the past 15 months. Total carloads averaged 226,563 in March 2025, the most in six months and the most for March since 2022.
...
U.S. railroads also originated 1.10 million containers and trailers in March 2025, up 8.0% (82,151 units) over March 2024 and intermodal’s 19th consecutive year-over-year gain.