A boom month for new home sales, but existing home sales dry up significantly in the face of high lending rates. The existing home market is much larger, so overall our transaction value index has fallen below the pre-pandemic trend. Still remarkably resilient, but a crack in the armor to be sure.
A Few of Our Favorite Things
A Few of Our Favorite Things
Wednesday, September 27, 2023
New orders for capital goods ex-aircraft makes a new all-time high. Recessions should be made of sterner stuff. Maybe there's a reason why the 10-year yield is at 4.5% (and maybe it's a good thing -- more on that later).
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Thursday, August 24, 2023
The headlines have been all about a catastrophic pullback in housing. Uh... not. The TrendMacro Housing Value Aggregate is still above the pre-pandemic level and the pre-pandemic trend for both new and existing homes. This isn't the boom in the immediate aftermath of the re-opening from lockdowns, but this is a very healthy market by any measure -- all the more so given the penalty of high mortgage rates.
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Thursday, July 27, 2023
Non-defense cap goods orders eke out a new high. Supposedly it was a relief yesterday to learn that the Fed staff is no longer expecting a recession -- but with evidence like this in abundance all year, what made them expect one to begin with?
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Tuesday, June 27, 2023
The productivity-led boom lives! Orders for cap-goods (non-defense, ex-aircraft) rises to a new all-time high. That's the precursor of the precursor of continued growth. Meanwhile, housing activity -- both new and existing -- rises again, still above the pre-pandemic trends. So far at least, no landing!
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Friday, May 26, 2023
Spending for capital goods (non-defense, ex-aircraft) defied the bearish consensus and rose to a new high. Personal spending beat expectations, too. Maybe the so-called banking crisis didn't matter after all. So the high-frequency and the mid-frequency data are both strong -- and there's supposed to be a recession?
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Wednesday, April 26, 2023
The Housing Transaction Value Index remains weirdly strong, while other indicators falter a bit. Cap goods now flat for months, economic uncertainty rising and -- of course -- bank credit falling overall, and contracting for corporate borrowers.
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Friday, March 24, 2023
It's too soon for the bank crisis to show up in mid-frequency indicators. That said, everything looks great. Oh, and what's that big uptick in housing activity? Maybe that post-pandemic boom really wasn't a bubble after all.
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Monday, February 27, 2023
CAPEX continues to run at record levels, at least in nominal terms. But the pandemic housing boom is definitely over (for good or for ill). Housing transactions are back to the pre-pandemic trend, and below it as a share of nominal GDP.
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Thursday, January 26, 2023
Our Housing Transaction Value Index takes another downtick, consistent with the drop in residential investment growth shown in this morning's Q4 GDP. Cap goods orders about flat again -- not a sign of growth or animal spirits, to be sure, but stalled at a record-high level and not falling as is the usual pattern before a recession.