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Monday, December 05, 2022

Housing December 5th Weekly Update: Inventory Decreased 2.6% Week-over-week

by Calculated Risk on 12/05/2022 09:03:00 AM

Active inventory decreased last week.  Here are the same week inventory changes for the last four years (usually inventory declines seasonally through the Winter):

2022: -14.4K (somewhat smaller than the usual seasonal decrease in inventory)
2021: -24.5K
2020: -18.3K
2019: -24.9K

Altos reports inventory is down 2.6% week-over-week and down 4.8% from the peak on October 28th.

Altos Home Inventory Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of December 2nd, inventory was at 549 thousand (7-day average), compared to 564 thousand the prior week. 

Compared to the same week in 2021, inventory is up 56.7% from 350 thousand, and compared to the same week in 2020 inventory is up 14.2% from 481 thousand.  However, compared to 3 years ago (2019), inventory is down 34.1% from 834 thousand.

Here are the inventory milestones I’ve been watching for with the Altos data:

1. The seasonal bottom (happened on March 4, 2022, for Altos) ✅

2. Inventory up year-over-year (happened on May 20, 2022, for Altos) ✅

3. Inventory up compared to 2020 (happened on October 7, 2022, for Altos) ✅

4. Inventory up compared to 2019 (currently down 34.1%).

Altos Home Inventory
Here is a graph of the inventory change vs 2021 (milestone 2 above), 2020 (milestone 3) and 2019 (milestone 4).  The blue line is the year-over-year data, the red line is compared to two years ago, and dashed purple is compared to 2019.

A key will be if inventory declines slower than usual during the winter months.

Mike Simonsen discusses this data regularly on Youtube.

Four High Frequency Indicators for the Economy

by Calculated Risk on 12/05/2022 08:27:00 AM

These indicators are mostly for travel and entertainment.    It was interesting to watch these sectors recover as the pandemic impact subsided.


----- Airlines: Transportation Security Administration -----

The TSA is providing daily travel numbers.

This data is as of December 4th.

TSA Traveler Data Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Black), 2021 (Blue) and 2022 (Red).

The dashed line is the percent of 2019 for the seven-day average.

The 7-day average is 6.9% below the same week in 2019 (93.1% of 2019).  (Dashed line) 

Air travel - as a percent of 2019 - has picked up recently - but still below pre-pandemic levels.

----- Movie Tickets: Box Office Mojo -----

Movie Box OfficeThis data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Black is 2020, Blue is 2021 and Red is 2022.  

The data is from BoxOfficeMojo through December 1st.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.  

Movie ticket sales were at $115 million last week, down about 57% from the median for the week.

----- Hotel Occupancy: STR -----

Hotel Occupancy RateThis graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021. Dashed purple is 2019 (STR is comparing to a strong year for hotels).

This data is through Nov 26th. The occupancy rate was down 0.5% compared to the same week in 2019. 

The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue) and close to 2019 levels.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

----- Gasoline Supplied: Energy Information Administration -----

gasoline Consumption
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Purple is for 2021, and Red is for 2022.

As of November 25th, gasoline supplied was down 9.6% compared to the same week in 2019.

Recently gasoline supplied has been running below 2019 and 2021 levels - and sometimes below 2020.  

Sunday, December 04, 2022

Sunday Night Futures

by Calculated Risk on 12/04/2022 10:53:00 PM

Weekend:
Schedule for Week of December 4, 2022

Monday:
• AT 10:00 AM ET, the ISM Services Index for November.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 4 and DOW futures are down 16 (fair value).

Oil prices were up over the last week with WTI futures at $80.89 per barrel and Brent at $86.51 per barrel. A year ago, WTI was at $66, and Brent was at $71 - so WTI oil prices are up 23% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.36 per gallon. A year ago, prices were at $3.34 per gallon, so gasoline prices are up $0.02 per gallon year-over-year.

Heavy Truck Sales Up 11% Year-over-year

by Calculated Risk on 12/04/2022 11:38:00 AM

The BEA released their estimate of vehicle sales for November on Friday.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the November 2022 seasonally adjusted annual sales rate (SAAR).

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009.  Then heavy truck sales increased to a new all-time high of 570 thousand SAAR in April 2019.

Heavy Truck Sales Click on graph for larger image.

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

Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 308 thousand SAAR in May 2020.  

Heavy truck sales were at 489 thousand SAAR in November, down from 492 thousand in October, and up 11.4% from 439 thousand SAAR in November 2021.  

Usually, heavy truck sales decline sharply prior to a recession.   Sales were solid in November.

Saturday, December 03, 2022

Real Estate Newsletter Articles this Week: Inflation Adjusted House Prices 3.3% Below Peak

by Calculated Risk on 12/03/2022 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Inflation Adjusted House Prices 3.3% Below Peak

Rents Falling Faster than "Seasonality Alone"

FHFA Announces Baseline Conforming Loan Limit Will Increase to $726,200

Case-Shiller: National House Price Index "Continued to Decline" to 10.6% year-over-year increase in September

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Schedule for Week of December 4, 2022

by Calculated Risk on 12/03/2022 08:11:00 AM

The key economic report this week is the October trade deficit.

----- Monday, December 5th -----

10:00 AM: the ISM Services Index for November.

----- Tuesday, December 6th -----

8:00 AM: Corelogic House Price index for October.

U.S. Trade Deficit8:30 AM: Trade Balance report for October from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $79.1 billion.  The U.S. trade deficit was at $73.3 billion in September.

----- Wednesday, December 7th -----

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

----- Thursday, December 8th -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 230 thousand initial claims, up from 225 thousand last week.

----- Friday, December 9th -----

8:30 AM: The Producer Price Index for November from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.2% increase in core PPI.

12:00 PM: Q3 Flow of Funds Accounts of the United States from the Federal Reserve.

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

Friday, December 02, 2022

COVID Dec 2, 2022: Update on Cases, Hospitalizations and Deaths

by Calculated Risk on 12/02/2022 08:46:00 PM

NOTE: This was a holiday week, and cases and deaths reporting always declines during holiday weeks.


On COVID (focus on hospitalizations and deaths).  Data has switched to weekly.

Weekly deaths bottomed in July 2021 at 1,666.

COVID Metrics
 NowWeek
Ago
Goal
New Cases per Week2303,101306,856≤35,0001
Hospitalized2🚩25,60322,011≤3,0001
Deaths per Week21,7802,634≤3501
1my goals to stop weekly posts,
2Weekly for Cases, Currently Hospitalized, and Deaths
🚩 Increasing number weekly for Cases, Hospitalized, and Deaths
✅ Goal met.

COVID-19 Deaths per DayClick on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.


Hotels: Occupancy Rate Down 0.5% Compared to Same Week in 2019

by Calculated Risk on 12/02/2022 03:09:00 PM

Due to the Thanksgiving holiday, U.S. hotel performance came in lower than the previous week and showed mixed comparisons to 2019, according to STR‘s latest data through Nov. 26.

Nov. 20-26, 2022 (percentage change from comparable week in 2019*

Occupancy: 50.4% (-0.5%)
• Average daily rate (ADR): US$135.49 (+20.4%)
• Revenue per available room (RevPAR): US$68.27 (+19.9%)

*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Hotel Occupancy RateClick on graph for larger image.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021.  Dashed purple is 2019 (STR is comparing to a strong year for hotels).

The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue) and close to 2019 levels.

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

The 4-week average of the occupancy rate continue to decline into the Winter.

Realtor.com Reports Weekly Active Inventory Up 53% Year-over-year; New Listings Down 17%

by Calculated Risk on 12/02/2022 01:44:00 PM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released today from Chief Economist Danielle Hale: Weekly Housing Trends View — Data Week Ending Nov 26, 2022. Note: They have data on list prices, new listings and more, but this focus is on inventory.

Active inventory continued to grow, increasing 53% above one year ago. Inventory accelerated again, notching a seventh week in a row with yearly trend growth roughly at or above 2% higher than the previous week.
...
New listings–a measure of sellers putting homes up for sale–were again down, dropping 17% from one year ago. This marks the twenty-first consecutive week of year-over-year declines in homeowners listing their home for sale.
Realtor YoY Active ListingsHere is a graph of the year-over-year change in inventory according to realtor.com

Note the rapid increase in the YoY change earlier this year, from down 30% at the beginning of the year, to up 29% YoY at the beginning of July.

Then the Realtor.com data was stuck at up around 26% to 30% YoY for 14 weeks in a row.  This was due to the slowdown in new listings, even as sales had fallen sharply.

Now YoY inventory is increasing again with even higher mortgage rates, suggesting sales are off more than new listings.

Comments on November Employment Report

by Calculated Risk on 12/02/2022 09:33:00 AM

The headline jobs number in the November employment report was above expectations, however employment for the previous two months was revised down by 23,000, combined.   The participation rate decreased, and the unemployment rate was unchanged at 3.7%.  


Leisure and hospitality gained 88 thousand jobs in November.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 980 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 88% all of the jobs lost in March and April 2020. 

Construction employment increased 20 thousand and is now 126 thousand above the pre-pandemic level. 

Manufacturing added 14 thousand jobs and is now 149 thousand above the pre-pandemic level.


In November, the year-over-year employment change was 4.90 million jobs.

Seasonal Retail Hiring

Typically, retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

Seasonal Retail HiringThis graph really shows the collapse in retail hiring in 2008. Since then, seasonal hiring had increased back close to more normal levels. Note: I expect the long-term trend will be down with more and more internet holiday shopping.

Retailers hired 257 thousand workers Not Seasonally Adjusted (NSA) net in November.  

This was seasonally adjusted (SA) to a loss of 29.9 thousand jobs in November.

Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since 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 participation rate decreased in November to 82.4% from 82.5% in October, and the 25 to 54 employment population ratio decreased to 79.7% from 79.8% the previous month.

Both have declined recently - but both are close to the pre-pandemic levels and indicate almost all of the prime age workers have returned to the labor force.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of persons employed part time for economic reasons was about unchanged at 3.7 million in November. These individuals, who would have preferred full-time employment, 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 November to 3.685 million from 3.660 million in October. This is below pre-recession levels and near the fewest part time workers (for economic reasons) in over 20 years.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.7% from 6.8% in the previous month. This is down from the record high in April 22.9% and ties the lowest level on record (series started in 1994). This measure is below the level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.230 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.165 million the previous month.

This is close to pre-pandemic levels.

Summary:

The headline monthly jobs number was above expectations; however, employment for the previous two months was revised down by 23,000, combined.  

The headline unemployment rate was unchanged at 3.7%, and U-6 declined to tie a record low at 6.7%.

Overall, this was another solid employment report.