by Calculated Risk on 9/05/2025 03:11:00 PM

From BofA:

[O]ur 3Q GDP tracking has moved up a tenth to 1.6%. Also, our 2Q GDP tracking is down a tenth to 3.2% from the second estiamte of 2Q GDP by the BEA. [September 5th comment]
emphasis added

From Goldman:

We lowered our Q3 GDP tracking estimate by 0.1pp to +1.6% (quarter-over-quarter annualized). We left our Q3 domestic final sales estimate unchanged at +0.7%. [September 4th estimate]

And from the Atlanta Fed:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.0 percent on September 4, unchanged from September 2 after rounding. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, and the Institute for Supply Management, increases in the nowcasts of real personal consumption expenditures growth and real gross private domestic investment growth from 1.7 percent and 5.3 percent, respectively, to 2.1 percent and 6.0 percent, were more than offset by a decline in the nowcast in the contribution on net exports to GDP growth from 0.69 percentage points to 0.28 percentage points. [September 4th estimate]

by Calculated Risk on 9/05/2025 12:05:00 PM

Today, in the Real Estate Newsletter: What will happen with House Prices?

Brief excerpt:

Almost every day a journalist or an analyst asks me what will happen with house prices.

Every cycle is different, and usually I focus on inventory, sales, and months-of-supply to answer this question.

However, there have been significant policy changes this year, especially with trade and immigration. This has led to a period of rising inflation, and a weakening employment situation (rising unemployment rate). A period of stagflation.

These are powerful forces for the economy and housing.
...
But what is the impact of rising unemployment?

The following graph shows the year-over-year in the Case-Shiller National Index versus the Sahm rule (from economist Claudia Sahm). The Sahm rule is a measure of changes in the unemployment rate. It compares the three-month moving average of the unemployment rate (U3) to the minimum of the three-month averages from the previous 12 months.

In general, a rising unemployment rate corresponds to weaker house prices. Of course, correlation does not imply causation. And there are exceptions - like at the onset of the pandemic when the unemployment increased sharply, but house prices took off (mortgage rates fell sharply and most potential homebuyers stayed employed).

This is much more in the article.

by Calculated Risk on 9/05/2025 09:11:00 AM

The headline jobs number in the August employment report was below expectations and June and July payrolls were revised down by 21,000 combined.  A weak report. The participation rate increased, the employment population ratio was unchanged, and the unemployment rate was increased to 4.3%.

Earlier: August Employment Report: 22 thousand Jobs, 4.3% 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 August to 83.7% from 83.4% in July.

The 25 to 54 employment population ratio increased to 80.7% from 80.4% the previous month.

Both are down from the recent peaks, but still near the highest level this millennium.

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 trended down after peaking at 5.9% YoY in March 2022 and was at 3.7% YoY in August, down from 3.9% YoY in July.

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.7 million, changed little in August. 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 August to 4.75 million from 4.68 million in July.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.1% from 7.9% 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

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

According to the BLS, there are 1.93 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.83 million the previous month.

This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

The recent streak of positive job reports ended in May (Payrolls were negative in June).  The recent streak finished in 2nd place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	2025	531
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
1Recent Streak Ended in May

Summary:

The headline jobs number in the August employment report was below expectations and June and July payrolls were revised down by 21,000 combined.  The unemployment rate increased to 4.3%.

This was a weak employment report.  

by Calculated Risk on 9/05/2025 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment changed little in August (+22,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.3 percent, also changed little in August. A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction.
...
The change in total nonfarm payroll employment for June was revised down by 27,000, from +14,000 to -13,000, and the change for July was revised up by 6,000, from +73,000 to +79,000. With these revisions, employment in June and July combined is 21,000 lower 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 22 thousand in August.  Private payrolls increased by 38 thousand, and public payrolls decreased 16 thousand (Federal payrolls decreased 15 thousand).

Payrolls for June and July were revised down by 21 thousand, combined.  The economy lost jobs in June.

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

In August, the year-over-year change was 1.47 million jobs.  Year-over-year employment growth is slowing.

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

The Labor Force Participation Rate increased to 62.3% in August, from 62.2% in July. This is the percentage of the working age population in the labor force.

The Employment-Population ratio was unchanged at 59.6% from 59.6% in July (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 increased to 4.3% in August from 4.2% in July.

This was below consensus expectations and June and July payrolls were revised down by 21,000 combined.  

A weak report.

I'll have more later ...

by Calculated Risk on 9/04/2025 08:01:00 PM

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

Friday:
• At 8:30 AM: Employment Report for August. The consensus is for 78,000 jobs added, and for the unemployment rate to increase to 4.3%.

by Calculated Risk on 9/04/2025 03:37:00 PM

From the Las Vegas Visitor Authority: July 2025 Las Vegas Visitor Statistics

Slower tourism trends of recent months continued in July as the destination saw a ‐12% YoY decline in visitation, hosting approximately 3.1M visitors.

The convention segment saw a YoY increase of 10.7% for the month, reflecting in part a scheduling nuance of the World Market Center's summer show (38k attendees) which appeared in July's tally this year; last year the show straddled Jul and Aug and showed up in 2024's August tallies.

Hotel occupancy of 76.1% (down ‐7.6 pts) and ADR of $155 (‐3.4% YoY) translated to monthly RevPAR of $118 (‐12.1% YoY).
emphasis added

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (Black), 2020 (dark blue), 2021 (light blue), 2022 (light orange), 2023 (orange), 2024 (dark orange) and 2025 (red).

Visitor traffic was down 12.0% compared to last July.  Visitor traffic was down 16.2% compared to June 2019.

Year-to-date (YTD) visitor traffic is down 8.8% compared to the same period in 2019.

The second graph shows convention traffic.

Convention traffic was up 10.7% compared to July 2024 and down 44.2% compared to July 2019.  

YTD convention traffic is down 13.2% compared to 2019.

by Calculated Risk on 9/04/2025 02:55:00 PM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the August 2025 seasonally adjusted annual sales rate (SAAR) of 422 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 422 thousand SAAR in August, down from 442 thousand in July, and down 15.7% from 501 thousand SAAR in August 2024.

Year-to-date (NSA) sales are down 8.4% through August.

Usually, heavy truck sales decline sharply prior to a recession, and sales have been soft recently.  

by Calculated Risk on 9/04/2025 12:09:00 PM

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

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -0.9% Year-over-year ...

The national median rent dipped by 0.2% in August, and now stands at $1,400. This was the first month-over-month decline since January, and marks the beginning of the rental market’s off-season. It’s likely that we’ll continue to see further modest rent declines through the remainder of the year.

Realtor.com: 24th Consecutive Month with Year-over-year Decline in Rents

In July 2025, U.S. median rent recorded its 24th consecutive year-over-year decline, marking a two-year streak of downward momentum. Rent for 0-2 bedroom properties across the 50 largest metropolitan areas dropped by 2.5% compared with the previous year, with the median asking rent at $1,712—just $1 more than the prior month.

This is much more in the article.

by Calculated Risk on 9/04/2025 10:17:00 AM

The BEA reported this morning that light vehicle sales were at 16.07 million in August on a seasonally adjusted annual rate basis (SAAR).

This was down 2.9% from the sales rate in July, and up 6.2% from August 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through July (red).

Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Then sales were depressed in May and June. 

Sales were boosted in August due to the termination of the EV credit at the end of September.

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

Sales in August were at the consensus forecast of 16.1 million SAAR.

by Calculated Risk on 9/04/2025 10:00:00 AM

(Posted with permission). The ISM® Services index was at 52.0%, up from 50.1% last month. The employment index increased to 46.5%, from 46.4%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 52% August 2025 ISM® Services PMI® Report

Economic activity in the services sector grew in August for the third consecutive month, say the nation's purchasing and supply executives in the latest ISM® Services PMI® Report. The Services PMI® indicated expansion at 52 percent, above the 50-percent breakeven point for the 13th time in the last 14 months.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In August, the Services PMI® registered 52 percent, 1.9 percentage points higher than the July figure of 50.1 percent and in expansion territory for the third month in a row. The Business Activity Index remained in expansion in August, registering 55 percent, 2.4 percentage points higher than the reading of 52.6 percent recorded in July. This index has not been in contraction territory since May 2020. The New Orders Index also remained in expansion in August, with a reading of 56 percent, up 5.7 percent from July’s figure of 50.3 percent. The Employment Index was in contraction territory for the third month in a row and the fifth time in the last six months; the reading of 46.5 percent is 0.1 percentage point higher than the 46.4 percent recorded in July.

“The Supplier Deliveries Index registered 50.3 percent, 0.7 percentage point lower than the 51 percent recorded in July and matching the June reading. This is the ninth consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® PMI® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 69.2 percent in August, a 0.7-percentage point decrease from July’s reading of 69.9 percent. The index has exceeded 60 percent for nine straight months, its longest such streak since 30 consecutive readings above 60 percent from October 2020 to March 2023.
emphasis added

Employment was very weak for the 3rd consecutive month, and prices paid was high.