by Calculated Risk on 12/01/2025 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated contraction. The PMI® was at 48.2% in November, down from 48.7% in October. The employment index was at 44.0%, down from 46.9% the previous month, and the new orders index was at 47.4%, down from 49.4%.

From ISM: Manufacturing PMI® at 48.2% November 2025 ISM® Manufacturing PMI® Report

Economic activity in the manufacturing sector contracted in November for the ninth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation’s supply executives in the latest ISM® Manufacturing PMI® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

“The Manufacturing PMI® registered 48.2 percent in November, a 0.5-percentage point decrease compared to the reading of 48.7 percent in October. The overall economy continued in expansion for the 67th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for a third straight month in November following one month of growth; the figure of 47.4 percent is 2 percentage points lower than the 49.4 percent recorded in October. The November reading of the Production Index (51.4 percent) is 3.2 percentage points higher than October’s figure of 48.2 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58.5 percent, up 0.5 percentage point compared to the reading of 58 percent reported in October. The Backlog of Orders Index registered 44 percent, down 3.9 percentage points compared to the 47.9 percent recorded in October. The Employment Index registered 44 percent, down 2 percentage points from October’s figure of 46 percent.
emphasis added

This suggests manufacturing contracted for the ninth consecutive month in November..  This was below the consensus forecast, and employment was very weak and prices very strong.

by Calculated Risk on 12/01/2025 08:11:00 AM

Altos reports that active single-family inventory was down 1.6% week-over-week.  Inventory usually starts to decline in the fall and then declines sharply during the holiday season.

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 15.6% compared to the same week in 2024 (last week it was up 15.5%), and down 4.3% compared to the same week in 2019 (last week it was down 4.7%). 

Inventory started 2025 down 22% compared to 2019.  Inventory has closed most of that gap, but it appears inventory will still be below 2019 levels at the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of November 28th, inventory was at 817 thousand (7-day average), compared to 830 thousand the prior week.  

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 11/30/2025 06:12:00 PM

Weekend:
• Schedule for Week of November 30, 2025

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for November.  The consensus is for 48.6%, down from 48.7%.

• At 10:00 AM: Construction Spending for October. 

• At 8:00 PM, Speech, Fed Chair Jerome Powell, Brief Remarks and Panel Discussion with Michael Boskin and Condoleezza Rice on George Shultz and his Economic Policy Contributions At the Hoover Institution’s George P. Shultz Memorial Lecture Series: George Shultz and Economic Policy, Stanford, Calif.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 and DOW futures are little changed (fair value).

Oil prices were up over the last week with WTI futures at $58.55 per barrel and Brent at $62.38 per barrel. A year ago, WTI was at $68, and Brent was at $74 - so WTI oil prices are down about 14% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.96 per gallon. A year ago, prices were at $3.01 per gallon, so gasoline prices are down $0.05 year-over-year.

by Calculated Risk on 11/30/2025 08:18:00 AM

Here is another update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022.  Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through August 2022 (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

On November 28, 2025, LBR was at $544.00 per 1,000 board feet, down 7.6% from a year ago.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

The pickup in early 2018 was due to the Trump lumber tariffs in 2017.  There were huge increases during the pandemic due to a combination of supply constraints and a pickup in housing starts.  

Now, even with the tariffs, prices are down slightly year-over-year suggesting weak demand.

by Calculated Risk on 11/29/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 1.3% year-over-year in September

• FHFA Announces Baseline Conforming Loan Limit Will Increase to $832,750 in 2026

• Fannie Mae Multi-Family Delinquency Rate Highest Since Housing Bust (ex-pandemic)

• Freddie Mac House Price Index Up 1.0% Year-over-Year in October

• Every Housing Down Cycle is "unhappy in its own way"

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

by Calculated Risk on 11/29/2025 08:11:00 AM

Special Note: There is still uncertainty on when some economic reports will be released. The employment report for November will NOT be released this week.  Items listed in RED have not been announced and will likely not be released this week.

The key reports this week are the November ISM manufacturing index and November vehicle sales.

----- Monday, December 1st -----
10:00 AM: ISM Manufacturing Index for November.  The consensus is for 48.6%, down from 48.7%.

10:00 AM: Construction Spending for October. 

8:00 PM: Speech, Fed Chair Jerome Powell, Brief Remarks and Panel Discussion with Michael Boskin and Condoleezza Rice on George Shultz and his Economic Policy Contributions At the Hoover Institution’s George P. Shultz Memorial Lecture Series: George Shultz and Economic Policy, Stanford, Calif.

----- Tuesday, December 2nd -----
All day: Light vehicle sales for November.

The consensus is for 15.4 million SAAR in November, up from 15.3 million SAAR in October (Seasonally Adjusted Annual Rate).

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

The dashed line is the current sales rate.

----- Wednesday, December 3rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for November. This report is for private payrolls only (no government).  The consensus is for 20,000 jobs added, down from 42,000 in October.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for October.

This graph shows industrial production since 1967.

The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 77.3%.

10:00 AM: the ISM Services Index for November.  The consensus is for 52.1, down from 52.4.

----- Thursday, December 4th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 218,000, up from 216,000 last week.

----- Friday, December 5th -----
10:00 AM: Personal Income and Outlays for September. The consensus is for a 0.4% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.2% (up 2.9% YoY).

10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for December).

by Calculated Risk on 11/28/2025 02:25:00 PM

From J.D. Power: November New-Vehicle Retail Sales Decline 4.8% as Effects of EV Pull-Ahead Persist Brief excerpt:

Total new-vehicle sales for November 2025, including retail and non-retail transactions, are projected to reach 1,255,900, a 5.2% decrease year over year, according to a joint forecast from J.D. Power and GlobalData. November 2025 has 25 selling days, one fewer than November 2024.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.4 million units, down 1.2 million units from November 2024.
...
Thomas King, president of the data and analytics division at J.D. Power:

"November’s results reflect another notable—yet anticipated—decline in the new-vehicle sales pace, driven largely by the pull-ahead of electric vehicle (EV) purchases prior to the expiration of federal EV tax credits on Sept. 30. That expiration prompted many shoppers to accelerate buying decisions, resulting in a surge in EV sales that temporarily inflated the overall industry sales pace. Now, two months after the credit expired, the industry continues to feel the effect of those accelerated purchases. In November, EVs are expected to account for just 6.0% of new-vehicle retail sales, consistent with October but well below the 12.9% recorded in September.
emphasis added

From Haig Stoddard at Omdia (pay site): US Light Vehicle Sales Declining Again in November; Falling Inventory Lowers Chance for a December Rebound

Tighter inventory, tanking deliveries of battery-electric vehicles, and an overall rise in prices for what is available are capping demand, with expectations the October-November slowdown continues in December.

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and J.D. Power's forecast for November(Red).

On a seasonally adjusted annual rate basis, the J.D. Power forecast of 154 million SAAR would be up slightly from last month, and down 7.6% from a year ago.

All of Q4 will likely be difficult for vehicle sales.

by Calculated Risk on 11/28/2025 12:56:00 PM

The advance release of Q3 GDP has been cancelled, and the 2nd release has not been scheduled.

From BofA:

On net, given the higher weighting of the months of Jul and Aug in quarterly consumer spending as compared to Sep, our 3Q PCE tracking is down a tenth to 3.1% q/q saar. This along with higher-than-expected Aug business inventories left our 3Q GDP tracking at 2.8% q/q saar. [November 26th estimate]
emphasis added

From Goldman:

We boosted our Q3 GDP tracking estimate by 0.1pp to +3.8% (quarter-over-quarter annualized). Our Q3 domestic final sales estimate stands at +2.7%. [November 19th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.9 percent on November 26, down from 4.0 percent on November 25. After this morning’s advance durable manufacturing report from the US Census Bureau, the nowcast of third-quarter real gross private domestic investment growth decreased from 4.4 percent to 3.5 percent. [November 26th estimate]

by Calculated Risk on 11/28/2025 08:37:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Fannie Mae Multi-Family Delinquency Rate Highest Since Housing Bust (ex-pandemic)

Excerpt:

Fannie and Freddie: Single Family Delinquency Rate Mostly Unchanged in October

Freddie Mac reported that the Single-Family serious delinquency rate in October was 0.56%, down from 0.57% September. Freddie's rate is up year-over-year from 0.55% in October 2024, however, this is below the pre-pandemic level of 0.60%.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in October was 0.54%, unchanged from 0.54% in September. The serious delinquency rate is up year-over-year from 0.52% in October 2024, however, this is below the pre-pandemic lows of 0.65%.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

There is much more in the article.

by Calculated Risk on 11/27/2025 09:54:00 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 at 4.4%

The unemployment rate was at 4.4% in September. 

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

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

Even though the rate has increased recently, this is historically a low unemployment rate.

2) Low unemployment claims.

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

Weekly claims were at 216,000 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) Mortgage Debt as a Percent of GDP has Fallen Significantly

This graph shows household mortgage debt as a percent of GDP.  

Note this graph is through Q2 2025 was impacted by the sharp decline in Q2 2020 GDP.

Mortgage debt, as a percent of GDP is at 44.6% - down from Q1 - and down from a peak of 73.3% of GDP during the housing bust.

4) Mortgage Delinquency Rate is Low

This graph, based on data from the MBA through Q3 2025, shows the percent of loans delinquent by days past due.  

Although mortgage delinquencies are up a little from Q2 2023 - the lowest level since the MBA survey started in 1979 - delinquencies are still historically very low.

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 are low.

5) Household Debt burdens at Low Levels (ex-pandemic)

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

The Household debt service ratio was at 11.3% in Q2 2025, slightly below the pre-pandemic level of 11.6%.

The DSR for mortgages (blue) is close to the pre-pandemic level.

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

Happy Thanksgiving to All!