by Calculated Risk on 3/08/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• ICE Mortgage Monitor: Property Insurance Costs Rose at a Record Rate in 2024

• Fannie and Freddie: Single Family Serious Delinquency Rates Increased in January

• 1st Look at Local Housing Markets in February

• Asking Rents Mostly Unchanged Year-over-year

• Final Look at Local Housing Markets in January and a Look Ahead to February Sales

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

by Calculated Risk on 3/08/2025 08:11:00 AM

The key report this week is February CPI.

----- Monday, March 10th -----
No major economic releases scheduled.

----- Tuesday, March 11th -----
6:00 AM ET: NFIB Small Business Optimism Index for February.

10:00 AM ET: Job Openings and Labor Turnover Survey for January from the BLS.

This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in December to 7.60 million from 8.12 million in November.

----- Wednesday, March 12th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for February from the BLS. The consensus is for a 0.3% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.9% Year-over-year (YoY), and core CPI to be up 3.2% YoY.

----- Thursday, March 13th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 225 initial claims up from 221 thousand last week.

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

12:00 PM: Q4 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, March 14th -----
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for March).

by Calculated Risk on 3/07/2025 07:16:00 PM

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	735	878	≤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 since Jan 2023.

Although weekly deaths met the original goal to stop posting in June 2023 (low of 314 deaths), I'm continuing to post now that deaths are above the goal again - and I'll continue to post until weekly deaths are once again below the goal.

Weekly deaths are now decreasing following the winter pickup.

And here is a graph I'm following concerning COVID in wastewater as of March 6th:

This appears to be a leading indicator for COVID hospitalizations and deaths.  This has moving down recently.

Nationally COVID in wastewater is "Low", down from "High" three weeks ago, according to the CDC.   

by Calculated Risk on 3/07/2025 05:13:00 PM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Decreased in February

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were lower in February compared to January. The Manheim Used Vehicle Value Index (MUVVI) decreased to 204.1, which reflects a 0.1% increase from a year ago. The seasonal adjustment to the index drove the monthly move for the index, as non-seasonally adjusted values rose for the month. The non-adjusted price in February increased by 1.4% compared to January, moving the unadjusted average price up 0.8% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices decreased in February (seasonally adjusted) and were up 0.1% YoY.

by Calculated Risk on 3/07/2025 01:24:00 PM

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure. ...

Apartment List: Asking Rent Growth -0.4% Year-over-year ...

On the supply side of the rental market, our national vacancy index now sits at 6.9 percent, the highest reading in the history of that monthly data series, which goes back to the start of 2017. After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over three years amid an influx of new inventory. 2024 saw the most new apartment completions since the mid-1980s, and with nearly 800 thousand units still in the construction pipeline, the supply boom has runway to continue into 2025.

Realtor.com: 18th Consecutive Month with Year-over-year Decline in Rents

In the first month of 2025, the median asking rent across the 50 largest U.S. metropolitan areas picked up slightly to $1,703, from $1,695 in December 2024, but it remains down 0.2% from one year ago. This marks the 18th consecutive month in which rents have fallen year over year.

This is much more in the article.

by Calculated Risk on 3/07/2025 12:30:00 PM

From Fed Chair Powell: Economic Outlook

Despite elevated levels of uncertainty, the U.S. economy continues to be in a good place. The labor market is solid, and inflation has moved closer to our 2 percent longer-run goal. At the Federal Reserve, we are intently focused on the dual-mandate goals given to us by Congress: maximum employment and stable prices.

Recent Economic Data
Economic growth
The economy has been growing at a solid pace. GDP expanded at a 2.3 percent annual rate in the fourth quarter of last year, extending a period of consistent growth that has been supported by resilient consumer spending. Recent indicators point to a possible moderation in consumer spending relative to the rapid growth rate over the second half of 2024. Further, recent surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment. Sentiment readings have not been a good predictor of consumption growth in recent years. We continue to carefully monitor a variety of indicators of household and business spending.

The labor market
Many indicators show that the labor market is solid and broadly in balance. The jobs report released this morning showed employers added 151,000 jobs to payrolls in February and the unemployment rate was 4.1 percent last month. Smoothing over the month-to-month volatility, since September, employers have added a solid 191,000 jobs a month on average. The unemployment rate remains low and has held in a narrow range between 3.9 and 4.2 percent for the past year. The jobs-to-workers gap has narrowed, and the quits rate has moved below pre-pandemic levels. Wages are growing faster than inflation, and at a more sustainable pace than earlier in the pandemic recovery. With wage growth moderating and labor supply and demand having moved into better balance, the labor market is not a significant source of inflationary pressure.

Inflation
Inflation has come down a long way from its mid-2022 peak above 7 percent without a sharp increase in unemployment—a historically unusual and most welcome outcome. While progress in reducing inflation has been broad based, recent readings remain somewhat above our 2 percent objective. The path to sustainably returning inflation to our target has been bumpy, and we expect that to continue. We see ongoing progress in categories that remain elevated, such as housing services and the market-based components of non-housing services. Inflation can be volatile month-to-month, and we do not overreact to one or two readings that are higher or lower than anticipated. Data released last week showed that total PCE prices rose 2.5 percent over the 12 months ending in January and that, excluding the volatile food and energy categories, core PCE prices rose 2.6 percent. We pay close attention to a broad range of measures of inflation expectations, and some near-term measures have recently moved up. We see this in both market- and survey-based measures, and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor. Beyond the next year or so, however, most measures of longer-term expectations remain stable and consistent with our 2 percent inflation goal.

Monetary Policy
Looking ahead, the new Administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy. While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their likely effects remains high. As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity.

Policy is not on a preset course. If the economy remains strong but inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly. Our current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.

Conclusion
Before I conclude, I will note that at our last FOMC meeting, we began our second five-year review of our monetary policy framework. We will consider changes to our consensus statement (Statement on Longer-Run Goals and Monetary Policy Strategy) and to our communications as part of this review. The consensus statement articulates our framework for the conduct of monetary policy in pursuit of the goals assigned to us by Congress. We will consider lessons of the past five years and adapt our approach, where appropriate, to best serve the American people, to whom we are accountable. The 2 percent longer-run inflation goal will be retained and is not a focus of the review.

This public review will be familiar to those who followed our process five years ago. We will hold outreach events around the country involving a wide range of parties, including Fed Listens events. We are open to new ideas and critical feedback. We will host a research conference in Washington in May. Our intent is to wrap up the review by late summer.

by Calculated Risk on 3/07/2025 10:35:00 AM

Special Note: There was a surge in gold imports in January. There is a time lag for when the imported gold will show up in inventories. GDPNow will correct for this once the gold is included as an increase in inventories, but currently GDPNow just included the import side. That is why GDPNow's tracking estimate of GDP is likely way too low.

From BofA:

Our 1Q GDP tracking is down from 2.3% q/q saar to 1.9% q/q saar since our last weekly publication. Also, after the second estimate of 4Q GDP, our 4Q tracking is up one-tenth to 2.4% q/q saar. [Mar 7th]
emphasis added

From Goldman:

The details of the trade balance report indeed indicated that elevated gold imports contributed the bulk of increase in imports in January. Goods exports were softer than suggested by the Advance Economic Indicators report, while wholesale inventories were slightly firmer. Taken together, we lowered our Q1 GDP tracking estimate by 0.3pp to +1.3% (quarter-over-quarter annualized). [Mar 6th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.4 percent on March 6, up from -2.8 percent on March 3. After recent releases from the Institute for Supply Management, the US Bureau of Economic Analysis, and the US Census Bureau, the nowcasts of first-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 0.0 percent and 2.5 percent, respectively, to 0.4 percent and 4.8 percent, while the nowcast of the contribution of net exports to first-quarter real GDP growth fell from -3.57 percentage points to -3.84 percentage points. [Mar 6th estimate]

by Calculated Risk on 3/07/2025 09:05:00 AM

The headline jobs number in the February employment report was slightly below expectations, and December and January payrolls were revised down by 2,000 combined.   The participation rate and the employment population ratio decreased, and the unemployment rate increased to 4.1%.

Earlier: February Employment Report: 151 thousand Jobs, 4.1% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since 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 years old participation rate was unchanged in February at 83.5% from 83.5% in January.

The 25 to 54 employment population ratio decreased to 80.5% from 80.7% the previous month.

Both are down from the recent peaks, but still near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.0% YoY in February.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons increased by 460,000 to 4.9 million in February. These individuals would have preferred full-time employment but 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 February to 4.94 million from 4.48 million in January.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.0% from 7.5% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.46 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.44 million the previous month.

This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

Through February 2025, the employment report indicated positive job growth for 50 consecutive months, putting the current streak in 2nd place of the longest job streaks in US history (since 1939).  

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	N/A	501
3	1990	48
4	2007	46
5	1979	45
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the February employment report was slightly below expectations, and December and January payrolls were revised down by 2,000 combined. The participation rate and the employment population ratio decreased, and the unemployment rate increased to 4.1%.

The headline number was decent.

by Calculated Risk on 3/07/2025 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment rose by 151,000 in February, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, financial activities, transportation and warehousing, and social assistance. Federal government employment declined.
...
The change in total nonfarm payroll employment for December was revised up by 16,000, from +307,000 to +323,000, and the change for January was revised down by 18,000, from +143,000 to +125,000. With these revisions, employment in December and January combined is 2,000 lower than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 151 thousand in February.  Private payrolls increased by 141 thousand, and public payrolls increased 11 thousand.

Payrolls for December and January were revised down 2 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In February, the year-over-year change was 1.95 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.4% in February, from 62.6% in January. This is the percentage of the working age population in the labor force.

The Employment-Population ratio decreased to 59.9% from 60.1% in January (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate increased to 4.1% in February from 4.0% in January.

This was slightly below consensus expectations, and December and January payrolls were revised down by 2,000 combined.  

I'll have more later ...

by Calculated Risk on 3/06/2025 07:10:00 PM

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

Friday:
• At 8:30 AM ET, Employment Report for February.   The consensus is for 158,000 jobs added, and for the unemployment rate to be unchanged at 4.0%.

• At 12:30 PM: Speech, Fed Chair Jerome Powell, Economic Outlook, At The University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum, New York, N.Y.