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Used Vehicle Wholesale Prices

1 day ago

Since the pandemic has disrupted new car production and sales, used car prices have increased sharply. This has pushed up inflation ("Used Cars" were up 51% annualized in December).Here is some data on used vehicle wholesale prices. From Manheim Consulting: Wholesale Prices Increased at Slowing Pace on Seasonally Adjusted Basis in December Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.6% month-over-month in December. This brought the Manheim Used Vehicle Value Index to 236.2, a 46.6% increase from a year ago. The non-adjusted price change in December was a decline of 1.1% compared to November, leaving the unadjusted average price up 43.4% year-over-year….According to Cox Automotive estimates, total used vehicle sales were down 4%

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Real Estate Newsletter Articles this Week

2 days ago

At the Calculated Risk Real Estate Newsletter this week: • Lawler: More on Investor Purchases of Single-Family Homes Single-Family Rental Trade Association Butchers Analysis of Investor Home Purchase Reports• 2nd Look at Local Housing Markets in December Adding Jacksonville, New Hampshire, North Texas, Portland, and Northwest (Seattle)• Homebuilder Comments in December: “Still a ton of demand for new homes" “Costs are through the roof!”• Mortgage Rates: Moving on Up Refinance Activity Will Slow Sharply• 3rd Look at Local Housing Markets in December Adding Albuquerque, Colorado, Houston, Memphis, Nashville, Sacramento, Santa Clara and South CarolinaThis is usually published several times a week, and provides more in-depth analysis of the housing market.The blog will continue as always!You

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Schedule for Week of January 16, 2022

3 days ago

The key reports this week are December housing starts and existing home sales.For manufacturing, the January NY and Philly Fed manufacturing surveys will be released.—– Monday, January 17th —–All US markets will be closed in observance of Martin Luther King Jr. Day—– Tuesday, January 18th —–8:30 AM: The New York Fed Empire State manufacturing survey for January. The consensus is for a reading of 26.0, down from 31.9.10:00 AM: The January NAHB homebuilder survey. The consensus is for a reading of 84, unchanged from 84 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.—– Wednesday, January 19th —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.8:30

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COVID January 14, 2022: Record Cases and Hospitalizations

3 days ago

Next update on COVID will be Tuesday (focus on hospitalizations and deaths):COVID Metrics  NowWeekAgoGoal Percent fully Vaccinated62.9%—≥70.0%1 Fully Vaccinated (millions)208.8—≥2321 New Cases per Day3🚩794,587616,246≤5,0002 Hospitalized3🚩131,332100,684≤3,0002 Deaths per Day3🚩1,7301,367≤502 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).2my goals to stop daily posts,37-day average for Cases, Currently Hospitalized, and Deaths🚩 Increasing 7-day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met. Click on graph for larger image.This graph shows the daily (columns) and 7-day average (line) of positive tests reported.The 7-day average for new cases and hospitalizations are at record levels.Fortunately, deaths are still only half the

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Q4 GDP Forecasts: Around 6%

3 days ago

From BofA: Our 4Q GDP tracking estimate remains at 5.5% qoq saar. [January 14 estimate]emphasis addedFrom Goldman Sachs: We lowered our Q4 GDP tracking estimate by ½pp to +6½% (qoq ar), to reflect the downside surprises this morning on both industrial production and retail sales. [January 14 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2021 is 5.0 percent on January 14, down from 6.8 percent on January 10. [January 14 estimate]

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Industrial Production Decreased 0.1 Percent in December

4 days ago

From the Fed: Industrial Production and Capacity UtilizationIndustrial production declined 0.1 percent in December. Losses of 0.3 percent for manufacturing and 1.5 percent for utilities were mostly offset by a gain of 2.0 percent for mining. For the fourth quarter as a whole, total industrial production rose at an annual rate of 4.0 percent. At 101.9 percent of its 2017 average, total industrial production in December was 3.7 percent higher than it was at the end of 2020 and 0.6 percent above its pre-pandemic (February 2020) reading. Capacity utilization for the industrial sector edged down 0.1 percentage point in December to 76.5 percent, a rate that is 3.1 percentage points below its long-run (1972–2020) average.emphasis added Click on graph for larger image.This graph shows Capacity

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Retail Sales Decreased 1.9% in December

4 days ago

On a monthly basis, retail sales were decreased 1.9% from November to December (seasonally adjusted), but sales were up 16.9 percent from December 2020.From the Census Bureau report:Advance estimates of U.S. retail and food services sales for December 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $626.8 billion, a decrease of 1.9 percent from the previous month, but 16.9 percent above December 2020.emphasis added Click on graph for larger image.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).Retail sales ex-gasoline were down 2.0% in December.The second graph shows the year-over-year change in retail sales and food service (ex-gasoline)

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Friday: Retail Sales, Industrial Production

4 days ago

Friday:• At 8:30 AM ET, Retail sales for December is scheduled to be released.  The consensus is for a 0.1% decrease in retail sales.• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for December. The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 77.0%.• At 10:00 AM, University of Michigan’s Consumer sentiment index (Preliminary for January).And on COVID (focus on hospitalizations and deaths):COVID Metrics  NowWeekAgoGoal Percent fully Vaccinated62.7%—≥70.0%1 Fully Vaccinated (millions)208.2—≥2321 New Cases per Day3🚩782,765587,722≤5,0002 Hospitalized3🚩128,22295,853≤3,0002 Deaths per Day3🚩1,7291,263≤502 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).2my goals to stop

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Hotels: Occupancy Rate Down 15% Compared to Same Week in 2019

4 days ago

From CoStar: STR: US Hotel Performance Dips From Holiday WeekReflecting post-holiday seasonality, U.S. hotel performance fell from the previous week, according to STR‘s latest data through Jan. 8.Jan. 2-8, 2022 (percentage change from comparable week in 2019*):• Occupancy: 45.4% (-14.9%)• Average daily rate (ADR): $119.92 (-4.8%)• Revenue per available room (RevPAR): $54.47 (-19.0%)Occupancy fell week over week because of a slowdown in leisure demand and a continued absence of business travel due to a Saturday holiday. While ADR also dropped from an all-time high the previous week, the metric came in at roughly 95% of the 2019 comparable. … *Due to the steep, pandemic-driven performance declines of 2020, STR is measuring recovery against comparable time periods from 2019. emphasis

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3rd Look at Local Housing Markets in December

4 days ago

Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in DecemberA brief excerpt: Adding Albuquerque, Colorado, Houston, Memphis, Nashville, Sacramento, Santa Clara and South Carolina…Here is a summary of active listings for these housing markets in December. Inventory was down 17.7% in December month-over-month (MoM) from November, and down 30.0% year-over-year (YoY).Inventory almost always declines seasonally in December, so the MoM decline is not a surprise. Last month, these markets were down 26.2% YoY, so the YoY decline in December is larger than in November. This isn’t indicating a slowing market.Notes for all tables:1. New additions to table in BOLD.2. Northwest (Seattle), North Texas (Dallas), and Santa Clara (San Jose), Jacksonville, Source:

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Weekly Initial Unemployment Claims Increase to 230,000

5 days ago

The DOL reported:In the week ending January 8, the advance figure for seasonally adjusted initial claims was 230,000, an increase of 23,000 from the previous week’s unrevised level of 207,000. The 4-week moving average was 210,750, an increase of 6,250 from the previous week’s unrevised average of 204,500. emphasis addedThe 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 increased to 210,750.The previous week was unrevised.Weekly claims were above the consensus forecast, perhaps due to the current COVID wave.

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Thursday: Unemployment Claims, PPI

5 days ago

Thursday:• At 8:30 AM ET, the initial weekly unemployment claims report will be released.  The consensus is for 210 thousand initial claims.• Also, 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 0.5% increase in core PPI.• At 10:00 AM, Testimony, Fed Governor Lael Brainard, Nomination Hearing, Before the Committee on Banking, Housing, and Urban Affairs, U.S. SenateAnd on COVID (focus on hospitalizations and deaths):COVID Metrics  NowWeekAgoGoal Percent fully Vaccinated62.6%—≥70.0%1 Fully Vaccinated (millions)208.0—≥2321 New Cases per Day3🚩761,535556,134≤5,0002 Hospitalized3🚩124,16391,030≤3,0002 Deaths per Day3🚩1,6561,238≤502 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).2my goals to stop

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Fed’s Beige Book: "A sudden pull back in leisure travel, hotel occupancy and patronage at restaurants"

5 days ago

Fed’s Beige Book "This report was prepared at the Federal Reserve Bank of Kansas City based on information collected on or before January 3, 2022."Economic activity across the United States expanded at a modest pace in the final weeks of 2021. Contacts from many Districts indicated growth continued to be constrained by ongoing supply chain disruptions and labor shortages. Despite the modest pace of growth, demand for materials and inputs, and demand for workers, remained elevated among businesses. Lending activity picked up slightly toward the end of the year, led by commercial real estate borrowers. Consumer spending continued to grow at a steady pace ahead of the rapid spread of the Omicron COVID-19 variant. Most Districts noted a sudden pull back in leisure travel, hotel occupancy and

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Cleveland Fed: Median CPI increased 0.4% and Trimmed-mean CPI increased 0.4% in December

5 days ago

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.4% in December. The 16% trimmed-mean Consumer Price Index increased 0.4% in December. "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".Note: The Cleveland Fed released the median CPI details here: "Used Cars" were up 51% annualized.Note that Owners’ Equivalent Rent and Rent of Primary Residence account for almost 1/3 of median CPI, and these measures were up around 5% annualized in December. Click on graph for larger image.This graph shows the year-over-year change

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Mortgage Rates: Moving on Up; Refinance Activity Will Slow Sharply

5 days ago

Today, in the Calculated Risk Real Estate Newsletter: Mortgage Rates: Moving on UpA brief excerpt: The general rule of thumb is refinance activity will be strong if current mortgage rates are 50bps lower than the maximum of the previous year (this is just a general rule – but it works pretty well).The following graph shows the MBA Refinance Index (Blue) and the change in mortgage rates (Red). The change is calculated as Maximum in Previous Year minus the current rate). When the red line is above 0.5% (more than 50bps decline in mortgage rates), then refinance activity generally picks up.Currently the maximum for the last year is 3.22% (excluding this week), and with current rates at 3.59%, refinance activity will probably decline significantly over the next few weeks.There is much more in

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BLS: CPI increased 0.5% in December; Core CPI increased 0.6%

6 days ago

From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis after rising 0.8 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.0 percent before seasonal adjustment.Increases in the indexes for shelter and for used cars and trucks were the largest contributors to the seasonally adjusted all items increase. The food index also contributed, although it increased less than in recent months, rising 0.5 percent in December. The energy index declined in December, ending a long series of increases; it fell 0.4 percent as the indexes for gasoline and natural gas both decreased. The index for all items less food and energy rose

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MBA: Mortgage Applications Increase in Latest Weekly Survey

6 days ago

From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 7, 2022. The previous week’s results included an adjustment for the holidays…. The Refinance Index decreased 0.1 percent from the previous week and was 50 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 51 percent compared with the previous week and was 17 percent lower than the same week one year ago. “Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s

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Wednesday: CPI

6 days ago

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 0.5% increase in CPI, and a 0.5% increase in core CPI.On COVID (focus on hospitalizations and deaths):COVID Metrics  NowWeekAgoGoal Percent fully Vaccinated62.6%—≥70.0%1 Fully Vaccinated (millions)207.8—≥2321 New Cases per Day3🚩750,996509,446≤5,0002 Hospitalized3🚩119,11586,401≤3,0002 Deaths per Day3🚩1,6331,163≤502 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).2my goals to stop daily posts,37-day average for Cases, Currently Hospitalized, and Deaths🚩 Increasing 7-day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal

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Update: The Inland Empire

6 days ago

Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire in California. I wrote: As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, the larger the negative impact on the local economy will be.So I think some pundits have it backwards: Instead of a strong local economy keeping housing afloat, I think the bursting housing bubble will significantly impact housing dependent local economies.And sure enough, the economies of housing dependent areas like the Inland Empire were devastated during the housing bust.  However, prior to the pandemic, the Inland Empire was coming back strong. Click on graph for larger image.This graph shows the unemployment rate

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Homebuilder Comments in December: “Still a ton of demand for new homes"

6 days ago

Today, in the Calculated Risk Real Estate Newsletter: Homebuilder Comments in December: “Still a ton of demand for new homes"A brief excerpt: Some homebuilder comments courtesy of Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting (a must follow for housing on twitter!):Here is Rick’s summary of builder comments for various markets (emphasis added in bold):Home builder survey results are in for full month of December. Top themes: 1) Still a ton of demand for new homes. 2) Rampant construction material & labor shortages. 3) Bit of chatter on possible margin compression several quarters ahead. Market commentary to follow…#Atlanta builder: “Have virtually no available inventory & huge backlog of 1,000+ units going in to 2022. Still metering sales in most communities,

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Missing Workers by Age Group

6 days ago

Note: This is an update to an earlier post.In November, Goldman Sachs economists put out a research note on the labor force participation rate: Why Isn’t Labor Force Participation Recovering?Here are few excerpts from the note: While the unemployment rate continues to fall quickly, labor force participation has made no progress since August 2020. … Most of the 5.0mn persons who have exited the labor force since the start of the pandemic are over age 55 (3.4mn), largely reflecting early (1.5mn) and natural (1mn) retirements that likely won’t reverse. The outlook for prime-age persons who have exited the labor force (1.7mn) is more positive, since very few are discouraged and most still view their exits as temporary.First, there are two important monthly surveys from the BLS. The

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Leading Index for Commercial Real Estate "Declines in December"; Up Sharply Year-over-year

7 days ago

From Dodge Data Analytics: Dodge Momentum Index Declines In December The Dodge Momentum Index fell 3% in December to 166.4 (2000=100), down from the revised November reading of 170.7. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In December, commercial planning fell 4%, and institutional planning slipped 1%.Despite these declines, 2021 was a banner year for the Dodge Momentum Index — despite the lingering risks of COVID-19 and low demand for some types of nonresidential buildings. Throughout the year, the overall Momentum Index increased 23%, the strongest annual gain since 2005. Both the

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Tuesday: Fed Chair Powell Nomination Hearing

7 days ago

From Matthew Graham at Mortgage News Daily: Mortgage Rates Spiking at Fastest Pace in a Long Time This morning’s additional weakness in the bond market brings the average conventional 30yr fixed scenario closer to 3.625% (as always, rate quotes depend on multiple factors, and the overall range is very wide). [30 year fixed 3.64%]emphasis addedTuesday:• At 6:00 AM ET, NFIB Small Business Optimism Index for December.• At 10:00 AM, Testimony, Fed Chair Jerome Powell, Nomination Hearing, Before the Committee on Banking, Housing, and Urban Affairs, U.S. SenateOn COVID (focus on hospitalizations and deaths):COVID Metrics  TodayWeekAgoGoal Percent fully Vaccinated62.5%—≥70.0%1 Fully Vaccinated (millions)207.7—≥2321 New Cases per Day3🚩674,406443,099≤5,0002 Hospitalized3🚩109,87481,843≤3,0002

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Update: Framing Lumber Prices Up 75% Year-over-year

7 days ago

Here is another monthly update on framing lumber prices.  This graph shows CME random length framing futures through January 10th.Lumber was at $1,160 per 1000 board feet this morning.  This is down from a peak of $1,733, but up $515 from a year ago.Click on graph for larger image in graph gallery.Lumber price are up 75% year-over-year.A combination of strong demand and various supply constraints have pushed up the price of lumber again.

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Q4 2021 Update: Unofficial Problem Bank list Decreased to 57 Institutions

7 days ago

The FDIC’s official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public.CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest.DISCLAIMER: This is an unofficial list, the information is from public sources only, and while

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2nd Look at Local Housing Markets in December

7 days ago

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in DecemberA brief excerpt: Commenting on the slowdown in sales, Dick Beeson, managing broker at RE/MAX Northwest Realtors, said, "That’s to be expected considering inventory in the fourth quarter was down sharply from last year. You can’t sell what isn’t there."…Here is a summary of active listings for these housing markets in December. Inventory was down 22.7% in December month-over-month (MoM) from November, and down 34.2% year-over-year (YoY).Inventory almost always declines seasonally in December, so the MoM decline is not a surprise. Last month, these markets were down 30.5% YoY, so the YoY decline in December is larger than in November. This isn’t indicating a slowing market.Notes for all

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Housing Inventory January 10th Update: Inventory Down 0.5% Week-over-week; New Record Low

7 days ago

Tracking existing home inventory is very important in 2022.Inventory usually declines sharply over the holidays, and this is a new record low for this series.Click on graph for larger image in graph gallery.This inventory graph is courtesy of Altos Research.As of January 7th, inventory was at 292 thousand (7-day average), compared to 397 thousand for the same week a year ago.  That is a decline of 26.0%.  Inventory was down 0.5% from the previous week.Compared to the same week in 2019, inventory is down 46.2% from 738 thousand.  A week ago, inventory was at 294 thousand, and was down 30.0% YoY.   Seasonally, inventory bottomed in April 2021 – very late – usually inventory bottoms in January or February. The YoY decline this week was smaller than last week, and that might be a sign that

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Six High Frequency Indicators for the Economy

8 days ago

These indicators are mostly for travel and entertainment.    It is interesting to watch these sectors recover as the pandemic subsides.Note: Gasoline consumption returned to pre-pandemic levels.—– Airlines: Transportation Security Administration —–The TSA is providing daily travel numbers.This data is as of January 8th. 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 2021 (Red).The dashed line is the percent of 2019 for the seven-day average.The 7-day average is down 27.9% from the same day in 2019 (72.1% of 2019).  (Dashed line)Air travel had been off about 20% relative to 2019 for the last five months (with some ups and downs) – but picked up over the Thanksgiving

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Sunday Night Futures

8 days ago

Weekend:• Schedule for Week of January 9, 2022Monday:• No major economic releases scheduled. From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are down 11 and DOW futures are down 91 (fair value).Oil prices were up over the last week with WTI futures at $78.90 per barrel and Brent at $81.75 per barrel. A year ago, WTI was at $52, and Brent was at $56 – so WTI oil prices are up 50% year-over-year. Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.29 per gallon. A year ago prices were at $2.31 per gallon, so gasoline prices are up $0.98 per gallon year-over-year.

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Real Estate Newsletter Articles this Week

9 days ago

At the Calculated Risk Real Estate Newsletter this week: • Rents Still Increasing Sharply Year-over-year • 1st Look at Local Housing Markets in December• Apartment Vacancy Rate Declined in Q4• Will the unprecedented surge in investor purchases of Single Family homes continue?This is usually published several times a week, and provides more in-depth analysis of the housing market.The blog will continue as always!You can subscribe at https://calculatedrisk.substack.com/  Most content is available for free, but please subscribe!.

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