Over the last few months, we have been noting the shape of the U.S. Treasury yield curve. Expectations for more rate hikes increased as the Fed continued to be hawkish, and the curve inversion worsened. The long end is being driven by a decelerating economic outlook while the front end is more responsive to Fed...Read More

As seen in a few headlines over the past weeks, there have been some large national real estate investors that have defaulted on loans and rattled the commercial real estate markets. As we will discuss below, this may be the tip of the iceberg as investors are facing refinancing costs significantly higher than their current...Read More

A slowdown in consumer demand will likely have negative implications for the economy. Outside of retail sales or personal consumption expenditures, there are other measures we can look to for insight on expectations for consumer demand. Tracking new order growth provides a view into how much product businesses are putting on-line given their expectations for...Read More

Existing single-family home sales decelerated -0.83% m/m, its twelfth consecutive month in negative territory. On a y/y basis, existing single-family home sales decelerated -36.12%, which is the fastest deceleration on record. The median sales price for all existing homes price decelerated to 1.33% y/y, its ninth consecutive deceleration, and the comparison set gets tougher through...Read More

The aggressive path of the Federal Reserve’s tightening cycle is well documented, with the Federal Open Market Committee (FOMC) raising interest rates 450 basis points over the course of eight consecutive meetings.   With the policy rate now approaching 5%, recent strength in some key economic indicators has raised the question if the 2023 ‘dots’ could...Read More

Retail and food services sales for the month of January accelerated 2.96% m/m, following -1.09% in December and -1.07% in November. The largest acceleration came from department stores (+17.52% m/m), followed by food services and drinking places (+7.19% m/m), and automobiles (+6.45% m/m). Source: Macrobond. Since the pandemic started, we have seen similar accelerations in...Read More

The Federal Reserve conducts a quarterly survey with banks to get an update on lending conditions and borrower demand across multiple parts of the economy, referred to as the Senior Loan Officer Opinion Survey (SLOOS).  The fourth quarter survey was released last week and continued the recent trend of tighter conditions and falling demand. There...Read More

The net one-month change in nonfarm payrolls, as reported by the Establishment Survey, was 517,000. The Household Survey reported an additional 894,000 jobs. Both releases featured their own set of statistical assumptions that should be considered when reviewing the data. Source: Bureau of Labor Statistics.  When it comes to payroll updates, there are three data...Read More

The last of the major 2022 economic data is being reported in January, including the quarterly GDP report.  It can be helpful to review how the year ended compared to how it started and evaluate the comparison set for the coming quarter.  This can be used as a gauge for how first quarter data is...Read More

Retail sales declined 1.1% m/m in December, following a downwardly revised -1% in the prior month. This pushed the value of nominal sales back to where it was in May 2022 and down 2.1% from its recent high in October. Real retail sales fell 1.1% m/m, bringing the value down 3.8% from its March 2021...Read More