Archive for June 2021

May new homes sales came in at a lackluster annualized rate of 769,000/year, well off their 1/21 near 15-year high of 993,000 and their 7/20-1/21 monthly average of over 900,000. Worse, April sales were revised down to 817,000. High prices, the May median was (gasp) $374,000, labor and supply-chain issues, an utter lack of inventory,…

Last week, NAR reported home prices rose by a stunning 23.6% Y-o-Y. Indexes that compare the change in price of the same home, which is how the CPI measures consumer inflation, and which carefully control for the mix of homes sold, show Y-o-Y home prices appreciating at an impressive 15%, great, but not nearly the…

Real consumer spending in May fell 0.4% M-o-M. Real durable goods spending declined 4.3%, while real spending on non-durables eased 0.5%. Conversely, real spending on services, which is 60% of overall spending, rose 0.4%. Households with incomes greater than $200,000 led the charge, boosting restaurant spending by 16%. Households with incomes between $31,000-$60,000 boosted such…

The Friday File: The 500 millionth Swiss Army Knife rolled off the Swiss assembly line in 2017, the first ones were assembled in the 1880s. 45,000 are made/day, and the Work Champ XL offers the most functions, 29, and sells for $219. There are 400 models, and the biggest knife ever made was a nine-inch-wide…

The number of births in the US fell to 3.61 million, the lowest level since 1979 and down 4% from 2019. The fertility rate, or the average number of babies/woman over her lifetime, fell to 1.64, the lowest ever. Births peaked in 2007, and except for 2014 have fallen every year since. Birthrates fell for…

Last spring, inflation, or deflation, as measured by the CPI was falling at -4%/quarter and producer prices were declining at a rate of -8%/year, yet no lasting deflationary pressures appeared. The same holds true now for inflation. Come fall, schools will open, employment will rise, production will increase, and demand will soften from its current…

Many commentators suggest that since the Roaring 1920s followed the Spanish Influenza pandemic of 1918, the Roaring 2020s will follow Covid-19. Wrong! Back then the median age in the US was 28, today it’s 38. Then, debt-to-GDP was 10%, now it is 110%. Then, exports boomed as Europe was busy rebuilding after WWI, now they…

In a sign of how strong demand is and weak supply is, the retail inventories-to-sales ratio is an astonishingly low 1.07, its lowest level since record-keeping began in 1/92. It’s also much lower than the previous low of 1.34 set in 2011/2012. Additionally, factory capacity utilization is just 75.2%, well below the decade-high of 79.9%…

The Friday File: When the moon is full and passes closest to Earth, it’s called a supermoon. The technical term is perigee syzygy. On 5/25/21, perigee (when the moon is closest to Earth) was at 9:50pm EDT; the moon was 222,023 miles from Earth. But the moon wasn’t full and did not align with Earth…

In normal recessions, durable goods get hit, then reverse and lead the recovery. It’s because this sector is $2 trillion, 10% of GDP, pays well, has large multipliers, and you can make up for many delayed big-ticket purchases. This recovery depends on services like hotels, restaurants, air travel and casinos recovering. They are just $800…