by Calculated Risk on 1/16/2025 10:02:00 AM

The DOL reported:

In the week ending January 11, the advance figure for seasonally adjusted initial claims was 217,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 201,000 to 203,000. The 4-week moving average was 212,750, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 500 from 213,000 to 213,500.
emphasis added

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

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 213,000.

The previous week was revised up.

Weekly claims were close to the consensus forecast.

by Calculated Risk on 1/15/2025 08:13:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for a increase to 215 thousand from 201 thousand last week.

• At 8:30 AM, Retail sales for December is scheduled to be released.  The consensus is for a 0.5% increase in retail sales.

• At 8:30 AM, the Philly Fed manufacturing survey for January. 

• At 10:00 AM, The January NAHB homebuilder survey.  The consensus is for a reading of 45, down from 46 the previous month. Any number below 50 indicates that more builders view sales conditions as poor than good.

by Calculated Risk on 1/15/2025 02:38:00 PM

Fed's Beige Book

Economic activity increased slightly to moderately across the twelve Federal Reserve Districts in late November and December. Consumer spending moved up moderately, with most Districts reporting strong holiday sales that exceeded expectations. Vehicle sales grew modestly. Construction activity decreased overall, with several Districts indicating that high costs for materials and financing were weighing on growth. Manufacturing decreased slightly on net, and a number of Districts said manufacturers were stockpiling inventories in anticipation of higher tariffs. Residential real estate activity was unchanged on balance, as high mortgage rates continued to hold back demand. Commercial real estate sales edged up. The nonfinancial services sector grew slightly overall, with Districts highlighting growth in leisure and hospitality and transportation, notably air travel. Truck freight volumes, however, were down. Financial service providers reported modest growth in lending and little change in asset quality overall, though lenders and community organizations voiced concerns about delinquencies among small businesses and lower-income households. Nonprofit social service agencies faced high demand amidst uncertainty about future funding levels. Agricultural conditions remained weak overall, with generally lower farm incomes and weather-related struggles in some areas. The spread of avian flu reduced egg supplies and pushed up prices. Energy activity was mixed. More contacts were optimistic about the outlook for 2025 than were pessimistic about it, though contacts in several Districts expressed concerns that changes in immigration and tariff policy could negatively affect the economy.

Labor Markets

Employment ticked up on balance, with six Districts reporting a slight increase and six reporting no change. Contacts in several service industries, notably healthcare, continued to see job growth. Construction employment increased slightly, while manufacturing employment was flat. Contacts across multiple sectors noted difficulty finding skilled workers, and reports of layoffs remained rare. However, contacts in some Districts expressed greater uncertainty about their future staffing needs. Wage growth picked up to a moderate pace in most Districts, though there were some reports that wage pressures had eased.

Prices

Prices increased modestly overall, with growth rates ranging from flat to moderate. Contacts in most Districts reported modest increases in selling prices, though there were instances of flat or decreasing prices as well, particularly in the retail and manufacturing sectors. Input costs also rose, with contacts highlighting higher insurance prices, particularly for health insurance. However, as with selling prices, there were several mentions of flat or lower input costs, particularly for fuel. Contacts expected prices to continue to rise in 2025, with some noting the potential for higher tariffs to contribute to price increases.
emphasis added

by Calculated Risk on 1/15/2025 12:42:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-January 2025

A brief excerpt:

Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-January 2025 I reviewed home inventory, housing starts and sales.

In Part 2, I will look at house prices, mortgage rates, rents and more.
...
The Case-Shiller National Index increased 3.6% year-over-year (YoY) in October and will be about the same YoY - or slightly higher - in the November report (based on other data).
...
Other measures of house prices suggest prices will be up about the same - or maybe a little higher - YoY in the November Case-Shiller index as in the October report.

There is much more in the article.

by Calculated Risk on 1/15/2025 11:11:00 AM

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in December. The 16% trimmed-mean Consumer Price Index increased 0.3%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 3.8% (down from 3.9% YoY in November), the trimmed-mean CPI rose 3.2% (down slightly from 3.2%), and the CPI less food and energy rose 3.2% (down from 3.3%). 

Core PCE is for November was up 2.8% YoY, up slightly from 2.8% in October.

by Calculated Risk on 1/15/2025 08:48:00 AM

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned when services less rent of shelter was up around 8% year-over-year.  This declined, but is still elevated, and is now up 4.0% YoY.

Click on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through December 2024.

Services were up 4.4% YoY as of December 2024, down from 4.5% YoY in November.

Services less rent of shelter was up 4.0% YoY in December, down from 4.1% YoY in November

The second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were at -1.9% YoY as of December 2024, up from -2.0% YoY in November.

Commodities less food and energy commodities were at -0.5% YoY in December, up from -0.7% YoY in November.

Here is a graph of the year-over-year change in shelter from the CPI report (through December) and housing from the PCE report (through November)

Shelter was up 4.6% year-over-year in December, down from 4.8% in November. Housing (PCE) was up 4.8% YoY in November, down from 5.0% in October.

This is still catching up with private new lease data.  

Core CPI ex-shelter was up 2.1% YoY in December.

by Calculated Risk on 1/15/2025 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in December, after rising 0.3 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.

The index for energy rose 2.6 percent in December, accounting for over forty percent of the monthly all items increase. The gasoline index increased 4.4 percent over the month. The index for food also increased in December, rising 0.3 percent as both the index for food at home and the index for food away from home increased 0.3 percent each.

The index for all items less food and energy rose 0.2 percent in December, after increasing 0.3 percent in each of the previous 4 months. Indexes that increased in December include shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care. The indexes for personal care, communication, and alcoholic beverages were among the few major indexes that decreased over the month.

The all items index rose 2.9 percent for the 12 months ending December, after rising 2.7 percent over the 12 months ending November. The all items less food and energy index rose 3.2 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending December. The food index increased 2.5 percent over the last year.
emphasis added

The change in CPI was close to expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

by Calculated Risk on 1/15/2025 07:00:00 AM

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

Mortgage applications increased 33.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 10, 2025. Last week’s results included an adjustment for the New Year’s holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 33.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 52 percent compared with the previous week. The Refinance Index increased 44 percent from the previous week and was 22 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 27 percent from one week earlier. The unadjusted Purchase Index increased 48 percent compared with the previous week and was 2 percent lower than the same week one year ago.

“Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week. The 30-year fixed rate is now at 7.09 percent – its highest level since May 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This time of the year is a particularly volatile time for application volumes, so it can be more helpful to focus on the level rather than the percent change. Purchase applications were 2 percent lower, and refinances were 22 percent higher compared to a year ago. Total applications were up by 33.3 percent, the highest level in a month, as both purchase and refinance applications saw large percentage increases over the week.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 7.09 percent from 6.99 percent, with points decreasing to 0.65 from 0.68 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 2% year-over-year unadjusted. 

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

Purchase application activity is up about 29% from the lows in late October 2023 and is now 7% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index is very low.

by Calculated Risk on 1/14/2025 07:49:00 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.

• At 8:30 AM, The Consumer Price Index for December from the BLS. The consensus is for 0.3% increase in CPI, and a 0.2% increase in core CPI.  The consensus is for CPI to be up 2.9% year-over-year and core CPI to be up 3.3% YoY.

• At 8:30 AM, The New York Fed Empire State manufacturing survey for January. The consensus is for a reading of -2.0, down from 0.2.

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

by Calculated Risk on 1/14/2025 01:31:00 PM

There were four bank failures in 2024. The median number of failures since the FDIC was established in 1933 was 7 - so 2 failures in 2024 was below the median.

There were five bank failures in 2023, however 3 of the failures were larger banks: First Republic Bank, San Francisco, CA, Signature Bank, New York, NY, Silicon Valley Bank, Santa Clara, CA.

The first graph shows the number of bank failures per year since the FDIC was founded in 1933.

Click on graph for larger image.

Typically about 7 banks fail per year.

Note: There were a large number of failures in the '80s and early '90s. Many of these failures were related to loose lending, especially for commercial real estate.  Also, a large number of the failures in the '80s and '90s were in Texas with loose regulation.

Even though there were more failures in the '80s and early '90s than during the financial crisis, the financial crisis was much worse (larger banks failed and were bailed out).

The second graph includes pre-FDIC failures. In a typical year - before the Depression - 500 banks would fail and the depositors would lose a large portion of their savings.

Then, during the Depression, thousands of banks failed. Note that the S&L crisis and recent financial crisis look small on this graph.

by Calculated Risk on 1/14/2025 10:08:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-January 2025

A brief excerpt:

This 2-part overview for mid-January provides a snapshot of the current housing market.

I always focus first on inventory, since inventory usually tells the tale! I’m watching months-of-supply closely.
...
New home inventory, as a percentage of total inventory, is still very high. The following graph uses Not Seasonally Adjusted (NSA) existing home inventory from the National Association of Realtors® (NAR) and new home inventory from the Census Bureau (only completed and under construction inventory).

t took a number of years following the housing bust for new home inventory to return to the pre-bubble percent of total inventory. Then, with the pandemic, existing home inventory collapsed and now the percent of new homes is 22.4% of the total for sale inventory, down from a peak of 27.2% in December 2022.

The percent of new homes of total inventory should continue to decline as existing home inventory increases. However, the percent of new home inventory will increase seasonally over the Winter as existing homes are withdrawn from the market.

There is much more in the article.

by Calculated Risk on 1/14/2025 08:12:00 AM

The Consumer Price Index for December is scheduled to be released tomorrow. The consensus is for 0.3% increase in CPI, and a 0.2% increase in core CPI. The consensus is for CPI to be up 2.9% year-over-year and core CPI to be up 3.3% YoY.

From Goldman Sachs economists:

We expect a 0.25% increase in December core CPI (vs. 0.2% consensus), corresponding to a year-over-year rate of 3.27% (vs. 3.3% consensus). We expect a 0.40% increase in December headline CPI (vs. 0.3% consensus), reflecting 0.35% higher food prices and 2.3% higher energy prices. Our forecast is consistent with a 0.21% increase in CPI core services excluding rent and owners’ equivalent rent and with a 0.18% increase in core PCE in December.

From BofA:

We forecast both headline and core CPI inflation to remain at 0.3% m/m in December, although there is a risk that the core could round down to 0.2%. The y/y rate should tick up a tenth to 2.8% for headline and remain unchanged at 3.3% for core.

by Calculated Risk on 1/13/2025 08:17:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Slightly Higher to Start New Week

The more important consideration is the new round of potential volatility on the horizon. Whereas it was the jobs report last week, this week's critical data will be Wednesday's Consumer Price Index (CPI). Tomorrow's inflation data (the Producer Price Index) is not quite as important, but a nonetheless capable of causing a reaction.

If inflation comes in higher than expected, it could easily push rates even higher. [30 year fixed 7.26%]
emphasis added

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

• At 8:30 AM, The Producer Price Index for December from the BLS. The consensus is for a 0.4% increase in PPI, and a 0.3% increase in core PPI.

by Calculated Risk on 1/13/2025 02:16:00 PM

From the Las Vegas Visitor Authority: November 2024 Las Vegas Visitor Statistics

Punctuated by the second annual F1 Las Vegas Grand Prix and the SEMA tradeshow, Las Vegas hosted more than 3.3M visitors in November, slightly up over last year (+0.6% YoY).

With a net decrease in churn of mid‐size and smaller meetings vs. last year, convention attendance was 548k for the month, down ‐8.4% YoY.

November saw higher Weekend occupancy vs. last year (89.1%, up 0.4 pts) but lower Midweek occupancy (76.9%, down ‐2.0 pts) as overall Hotel occupancy for the month reached 81.4%, down ‐0.5 pts. While down compared to the record‐shattering levels tied to last year's inaugural F1 race, monthly ADR this year saw the second highest on record for the month of November, reaching $199 (‐20.3% YoY) while RevPAR came in at approx. $162 (‐20.8% 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 (dark orange) and 2024 (red).

Visitor traffic was up 0.6% compared to last November.  Visitor traffic was down 3.2% compared to November 2019.

Year-to-date visitor traffic is down 5.6% compared to 2019.

The second graph shows convention traffic.

Convention traffic was down 8.4% compared to November 2023, and down 9.1% compared to November 2019.  

Year-to-date convention traffic is down 9.2% compared to 2019.

by Calculated Risk on 1/13/2025 10:09:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in December

A brief excerpt:

NOTE: The tables for active listings, new listings and closed sales all include a comparison to December 2019 for each local market (some 2019 data is not available).

This is the second look at several early reporting local markets in December. 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 December were mostly for contracts signed in October and November when 30-year mortgage rates averaged 6.43% and 6.81%, 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 7.5% in October and November 2023.
...
Here is a look at months-of-supply using NSA sales. Since this is NSA data, it is likely this will be the seasonal low for months-of-supply.

Note the regional differences with more months-of-supply in the South, especially in Florida and Texas.
...
Many more local markets to come!

There is much more in the article.

by Calculated Risk on 1/13/2025 08:11:00 AM

Altos reports that active single-family inventory was down 1.7% week-over-week.

Inventory will continue to decline seasonally and probably bottom in late January or February.  

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 2024.  The black line is for 2019.  

Inventory was up 23.6% compared to the same week in 2024 (last week it was up 27.3%), and down 23.3% compared to the same week in 2019 (last week it was down 22.2%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels has closed significantly!

This second inventory graph is courtesy of Altos Research.

As of Jan 10th, inventory was at 624 thousand (7-day average), compared to 635 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 1/12/2025 06:45:00 PM

Weekend:
• Schedule for Week of January 12, 2025

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are unchanged and DOW futures are up 68 (fair value).

Oil prices were up over the last week with WTI futures at $76.57 per barrel and Brent at $79.76 per barrel. A year ago, WTI was at $73, and Brent was at $80 - so WTI oil prices are up about 5% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.06 per gallon. A year ago, prices were at $3.06 per gallon, so gasoline prices are unchanged year-over-year.

by Calculated Risk on 1/12/2025 10:17:00 AM

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

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week🚩	500	450	≤3501
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported for the last 2 years.

Although weekly deaths met the original goal to stop posting, I'm continuing to post now that deaths are above the goal again - and at a minimum, I'll continue to post through the Winter.  

Weekly deaths have mostly been declining, however weekly deaths are still above the low of 313 in early June 2024.

And here is a graph I'm following concerning COVID in wastewater as of January 2nd:

This appears to be a leading indicator for COVID hospitalizations and deaths.

Natinally COVID in wastewater is "HIGH" according to the CDC - especially in the Midwest where it is "Very High" - and more than triple the lows of last May - and increasing.  Something to watch.

by Calculated Risk on 1/11/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Moody's: Apartment Vacancy Rate Increased in Q4; Office Vacancy Rate at Record High

• 1st Look at Local Housing Markets in December

• Asking Rents Mostly Unchanged Year-over-year

• Update: The Housing Bubble and Mortgage Debt as a Percent of GDP

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

by Calculated Risk on 1/11/2025 08:11:00 AM

The key reports this week are December CPI, retail sales, and housing starts.

For manufacturing, the December Industrial Production report and the January New York and Philly Fed manufacturing surveys will be released.

----- Monday, January 13th -----
No major economic releases scheduled.

----- Tuesday, January 14th -----
6:00 AM: NFIB Small Business Optimism Index for December.

8:30 AM ET: The Producer Price Index for December from the BLS. The consensus is for a 0.4% increase in PPI, and a 0.3% increase in core PPI.

----- Wednesday, January 15th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for December from the BLS. The consensus is for 0.3% increase in CPI, and a 0.2% increase in core CPI.  The consensus is for CPI to be up 2.9% year-over-year and core CPI to be up 3.3% YoY.

8:30 AM: The New York Fed Empire State manufacturing survey for January. The consensus is for a reading of -2.0, down from 0.2.

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, January 16th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for a increase to 215 thousand from 201 thousand last week.

8:30 AM: Retail sales for December is scheduled to be released.  The consensus is for a 0.5% increase in retail sales.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

8:30 AM: the Philly Fed manufacturing survey for January. 

10:00 AM: The January NAHB homebuilder survey. 

The consensus is for a reading of 45, down from 46 the previous month. Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Friday, January 17th -----
8:30 AM: Housing Starts for December.

This graph shows single and multi-family housing starts since 1968.

The consensus is for 1.315 million SAAR, up from 1.289 million SAAR.

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

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 77.0%.