Archive for July 2024

Unsurprisingly, the Fed left rates unchanged but put markets on notice that a mid-September cut is highly likely. The Fed is now, finally, concerned not just about inflation, which they described almost benignly as just “somewhat elevated,” but more importantly, about labor markets which worryingly are slowly and steadily deteriorating. Expect a 25bps cut on…

When the Fed began raising rates in 3/22, Fed funds was 0.125% and the CPI was 8.5%, thus the real Fed funds rate was a very stimulative negative 8.375%. Today Fed funds is 5.375% and the CPI is 3%. Thus, the real Fed funds rate is a restrictive 2.375%. This means the rise in real…

While US consumer spending remains strong, incomes are not keeping up. Inflation-adjusted Y-o-Y income growth has slid from 5.3% a year ago, to 3.8% in 12/23 to 1% now, while real spending is up 2.6% Y-o-Y, a huge 1.6 percentage point gap. As a result, savings rates are plummeting from 4.8% a year ago, 3.5%…

The Friday file: On 7/26/1903, Horatio Jackson was the first to cross the US by car. The journey from San Francisco to Manhattan with a mechanic took 63 days. The current record is 25 hours and 39 minutes, set in 5/20 by Toman and Tabutt. Their run, like all recent cross-country speed attempts, now starts…

The first estimate for 24Q2 real GDP came in at a surprisingly strong 2.8% annualized rate, well above expectations of, at most, 2%, and well up from 1.4% in 24Q1. The result was due to rising inventories, strong consumer spending on goods, a rise in government spending, and weak residential construction. This reading is unlikely…

The cost of virtual consultation with a primary care physician is $99. Seeing the same doctor in their office raises the cost of service to $170. If you go to an urgent-care center/clinic the cost to provide care rises to $185. But if you go to the emergency room it costs $2,700. As for primary-care…

For the year end 3/24, foreigners purchased 54,300 homes, down 36% Y-o-Y, and the lowest number since recordkeeping began in 2009. The biggest impediments; a strong dollar and limited inventory. Dollar volume fell 21% to $42 billion despite an average price of $780,300/median price of $475,000, the highest on record. Sales volume peaked in 2017…

While June housing starts were up 3% M-o-M to a 1.353-million-unit annualized rate, the rise was all volatile multifamily driven. Single-family starts fell 2.2% and are now down four months in a row. Moreover, June starts came in at 980,000 annualized, an eight-month low. Lastly, single-family building permits fell 2.3% M-o-M, on top of a…

Yesterday’s release of the Fed’s Beige Book, covering economic activity from mid-May through the end of June, will not be a best seller. While seven Fed districts exhibited growth, five districts recorded “flat or declining activity”. That is down from two six weeks ago, and is the same number, five, that presented in 1/08 and…