by Calculated Risk on 3/19/2025 04:26:00 PM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12-month average.

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic increased 0.4% in February compared to the rolling 12 months ending in December.   Outbound traffic decreased 0.8% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday and then decline sharply and bottom in the Winter depending on the timing of the Chinese New Year.  

Imports were up 6% YoY in February and exports were down 10% YoY.    

This was a very strong July through January period for imports - up about 27% YoY - as importers rushed to beat the tariffs.  That has started to slow.

Weekly Schedule

by Calculated Risk on 3/19/2025 03:13:00 PM

Statement here.

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

Here are the projections.  

In December, the FOMC participants’ midpoint of the target level for the federal funds rate was around 3.875% at the end of 2025 (3.6%-4.1%) and the long run range was 2.8% to 3.6%.  The FOMC participants’ midpoint of the target range is now at 4.0% at the end of 2025 (3.9%-4.4%) and the long run range is 2.6% to 3.6%.  

It appears growth slower than expected in Q1 2025, and 2025 GDP growth was revised down.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Projection Date	2025	2026	2027
Mar 2025	1.5 to 1.9	1.6 to 1.9	1.6 to 2.0
Dec 2024	1.8 to 2.2	1.9 to 2.1	1.8 to 2.0

¹ Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.1% in February.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Projection Date	2025	2026	2027
Mar 2025	4.3 to 4.4	4.2 to 4.5	4.1 to 4.4
Dec 2024	4.2 to 4.5	4.1 to 4.4	4.0 to 4.4

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of January 2025, PCE inflation increased 2.5 percent year-over-year (YoY).  The projections for Q4 2025 PCE inflation were revised up.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Projection Date	2025	2026	2027
Mar 2025	2.6 to 2.9	2.1 to 2.3	2.0 to 2.1
Dec 2024	2.3 to 2.6	2.0-2.2	2.0

PCE core inflation increased 2.6 percent YoY in January and is expected to be up 2.7 percent YoY in February.  The projections for core PCE inflation Q4 2025 were revised up.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Projection Date	2025	2026	2027
Mar 2025	2.7 to 3.0	2.1 to 2.4	2.0 to 2.1
Dec 2024	2.5 to 2.7	2.0-2.3	2.0

by Calculated Risk on 3/19/2025 02:00:00 PM

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

FOMC Statement:

Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty around the economic outlook has increased. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action was Christopher J. Waller, who supported no change for the federal funds target range but preferred to continue the current pace of decline in securities holdings.
emphasis added

by Calculated Risk on 3/19/2025 12:58:00 PM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: ABI February 2025: Billings remain soft at architecture firms as interest in new projects wanes

The AIA/Deltek Architecture Billings Index (ABI) score was 45.5 for the month, indicating that a majority of firms are still experiencing declining firm billings. Billings were flat early in the fourth quarter of 2024 but have softened significantly since then. February also marked the first month since the height of the pandemic in 2020 that inquiries into new projects at firms have declined. Inquiries can be as formal as an RFP or RFQ from a potential client, or as informal as a discussion about a potential project, and rarely decline, even during periods of economic softness. The decline this month likely reflects the ongoing uncertainty about the economy at this time. In addition, the value of new signed design contracts decreased at firms for the twelfth consecutive month in February, as clients also remain hesitant to commit to new projects at this time.

Billings remained soft in all regions of the country in February as well. While firms located in the West reported modest growth throughout the fourth quarter of 2024, business conditions there have softened somewhat since then. Billings remained weakest at firms located in the Northeast, with more moderate declines in billings reported at firms located in the Midwest and South. Business conditions were also weak across firms of all specializations this month, remaining softest at firms with a multifamily residential specialization for the second consecutive month.
...
The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.
emphasis added

• Northeast (41.3); Midwest (45.2); South (47.6); West (48.1)

• Sector index breakdown: commercial/industrial (46.9); institutional (46.4); multifamily residential (46.1)

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 45.5 in February, down from 45.6 in January.  Anything below 50 indicates a decrease in demand for architects' services.

This index has indicated contraction for 27 of the last 29 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment in 2025.

Multi-family billings remained negative has been negative for the last 31 months.  This suggests we will see further weakness in multi-family starts.

by Calculated Risk on 3/19/2025 09:23:00 AM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Up 2.6% YoY in February; 4th Look at Local Housing Markets

A brief excerpt:

Here are a few more local markets prior to the NAR release tomorrow.

The NAR is scheduled to release February Existing Home sales on Thursday, March 20th at 10:00 AM. The consensus is for 3.92 million SAAR, down from 4.08 million in January. Last year, the NAR reported sales in February 2024 at 4.31 million SAAR.

Housing economist Tom Lawler expects the NAR to report sales of 4.21 million SAAR for January. The consensus appears to be too low - take the over!!!
...
From the California Association of Realtors® (C.A.R.): California housing market rebounds in February with highest home sales in more than two years, C.A.R. reports

February’s sales pace surged 11.6 percent from the 254,110 homes sold in January and was up 2.6 percent from a year ago, when a revised 276,280 homes were sold on an annualized basis. The February sales level was the highest since October 2022. Although home sales have rebounded strongly, they have remained below the 300,000 mark since September 2022.

...
Several local markets - like Illinois, Miami, New Jersey and New York - will report after the NAR release.

There is much more in the article.

by Calculated Risk on 3/19/2025 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 6.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 14, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 13 percent from the previous week and was 70 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 6 percent higher than the same week one year ago.

“Mortgage rates increased for the first time in nine weeks, with the 30-year fixed rate rising to 6.72 percent. This increase in rates led to a decrease in refinance volume. However, purchase application volume inched up to its highest level in six weeks, led by a 3 percent increase in FHA purchase applications,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Overall, purchase application volume is up 6 percent compared to last year at this time. Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.67 percent from 6.73 percent, with points increasing to 0.63 from 0.60 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 6% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is up about 23% from the lows in late October 2023 and is only 2% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index declined after increasing sharply the previous two weeks and remains very low.

by Calculated Risk on 3/18/2025 07:38:00 PM

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

Wednesday:
• At 7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• During the day: The AIA's Architecture Billings Index for February (a leading indicator for commercial real estate).

• At 2:00 PM: FOMC Meeting Announcement. No change to policy is expected at this meeting.

• At 2:00 PM: FOMC Projections. This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with updated economic projections.

• At 2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

by Calculated Risk on 3/18/2025 02:58:00 PM

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

Las Vegas started the year with January visitation of approx. 3.34M visitors, down 1.1% from last January.

Las Vegas convention attendance reached roughly 629k in January, up 12.8% YoY, supported in part by strong attendance at recurring larger tradeshows including CES and World of Concrete, plus the calendar impact of World Market Center's Winter show (38k attendees) and Total Product Expo (8k attendees) falling fully in January this year vs. last year when its impact straddled Jan and Feb.

On a room base with roughly 6k fewer rooms than last year, occupancy reached 81.9%, up 3.0 pts with Weekend occupancy of 85.6% (up 2.0 pts) and Midweek occupancy of 80.2% (up 3.2 pts.) ADR for the month reached $195 (+2.2% YoY) with RevPAR of $160 (+6.0% 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 1.1% compared to last January.  Visitor traffic was down 2.0% compared to January 2019.

The second graph shows convention traffic.

Convention traffic was up 12.8% compared to January 2024, and down 8.0% compared to January 2019.  

by Calculated Risk on 3/18/2025 09:38:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Housing Starts Increased to 1.501 million Annual Rate in February

A brief excerpt:

Total housing starts in February were above expectations; however, starts in December and January were revised down slightly, combined.

The third graph shows the month-to-month comparison for total starts between 2024 (blue) and 2025 (red).

Total starts were down 2.9% in February compared to February 2024. Starts bounced back in the Northeast region after being down sharply year-over-year in January (likely weather related).

There is much more in the article.

by Calculated Risk on 3/18/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) increased 0.7 percent in February after moving up 0.3 percent in January. Manufacturing output rose 0.9 percent, boosted by a jump of 8.5 percent in the index for motor vehicles and parts. The output of manufacturing excluding motor vehicles and parts increased 0.4 percent. The index for mining gained 2.8 percent, and the index for utilities decreased 2.5 percent. At 104.2 percent of its 2017 average, total IP in February was 1.4 percent above its year-earlier level. Capacity utilization stepped up to 78.2 percent, a rate that is 1.4 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 78.2% is 1.4% below the average from 1972 to 2023.  This was above consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased to 104.2. This is above the pre-pandemic level.

Industrial production was above consensus expectations.