patrick.net

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https://thehill.com/homenews/nexstar_media_wire/4358987-rent-expected-to-drop-in-several-us-cities-as-markets-near-oversupply-real-estate-report/

(NEXSTAR) – Renters may finally catch a break next year.

Of the 100 cities analyzed in Zumper’s Annual Rent Report, which was released this week, 55 have seen rent prices drop since last year. An additional 17 are flat year-over-year.

The report predicts rent prices will keep “softening,” at least through the first half of 2024.

Part of the reason for dropping prices, according to Zumper, is a recent increase in supply, as new apartment buildings and complexes keep opening in fast-growing cities. Real-time data providers like Zillow and ApartmentList also show rent growth for new apartments tumbling.

Nationwide, the cost of renting a one-bedroom dropped by a tenth of a percent in 2023, Zumper reports, but is expected to drop by larger margins in 2024 in cities where supply has caught up with demand. Sun Belt cities, from Phoenix to Austin to Orlando, have all seen one-bedroom rents drop between 5% and 11%.

From NY Post article. Looks like then inflation will not be a major priority or factor in 2024 if this is true.

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“Since 2009, this has been 100% artificial, unprecedented money printing and deficits; $27 trillion over 15 years, to be exact. This is off the charts, 100% artificial, which means we’re in a dangerous state,” Harry Dent told Fox News Digital.

“I think 2024 is going to be the biggest single crash year we’ll see in our lifetimes.”

ad says

Nationwide, the cost of renting a one-bedroom dropped by a tenth of a percent in 2023, Zumper reports, but is expected to drop by larger margins in 2024 in cities where supply has caught up with demand. Sun Belt cities, from Phoenix to Austin to Orlando, have all seen one-bedroom rents drop between 5% and 11%.

That means it's a great time to buy! Buy now or be priced out forever!

ad says

From NY Post article. Looks like then inflation will not be a major priority or factor in 2024 if this is true.

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“Since 2009, this has been 100% artificial, unprecedented money printing and deficits; $27 trillion over 15 years, to be exact. This is off the charts, 100% artificial, which means we’re in a dangerous state,” Harry Dent told Fox News Digital.

“I think 2024 is going to be the biggest single crash year we’ll see in our lifetimes.”

Harry Dent is a perma-bear. He’s a broken clock that’s right twice a day.

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The Federal Reserve's preferred annual inflation measure is at 2.6% as of end of November 2024. It continues to trend down. That is why I think ultimately the 30 year mortgage rate is going to steady around 5.5% in 2024 as inflation (and interest rates) subside .

https://www.bea.gov/data/personal-consumption-expenditures-price-index

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Inflation expectations over the next 10 years have not changed much over the last month or so. What has changed is the yield investors are expecting to earn above the rate of inflation. It has dropped from them wanting about 2.5% over the rate of inflation (back in October) to them wanting "only" 1.7% over the rate of inflation today. That is where the reduction/increase in rates is going to primarily come from. This is for the 10 year bond.

Misc says

to them wanting "only" 1.7% over the rate of inflation today

For me, I would want at least 0.5% real return for a 12 month CD. I would ideally want an annual real return of at least 2% for a government bond fund which invests in intermediate duration bonds. Assume average of 3% annual inflation, this fund is close to providing that 2% annual real return.
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So what do banks want for 30 year mortgage rate after inflation steadies around 2.75% ?

They want a rate of 5.75% ?

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ad says

So what do banks want for 30 year mortgage rate after inflation steadies around 2.75% ?

They want a rate of 5.75% ?

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Inflation expectations over the next 10 years is already at 2.2% annual average. Bond investors are being super greedy because they got burned loading up on long term debt during Covid. Funniest thing is that yield spreads between treasuries and junk bonds are quite narrow. I dunno what they are fucking thinking.

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Nike to cut costs by $2 billion in next 3 years.

This tells a lot as far as the economy, and mainly due to inflation.

This article tries to downplay this somewhat by claiming that consumers are also instead spending more money on experiences.

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"Customers are switching their behavior, passing up discretionary purchases — like expensive sneakers and athletic wear — for basics and experiences like concerts and travel."

https://www.yahoo.com/finance/news/nike-says-cut-2-billion-150121521.html

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Red Sea attacks could raise prices for U.S. consumers

Attacks on Red Sea shipping might raise prices for consumers because cargo carriers take longer routes to avoid dangerous waters for now.

Iran-backed Houthi rebels in Yemen first struck cargo ships with drones and missiles this month, in what they claim is retaliation for Israel’s actions in the Gaza war. The disruptions caused shipping giants Maersk, CMA CGM and COSCO to reroute shipments around the Cape of Good Hope in South Africa, maneuvers that are increasingly costly to shippers and consumers.
As of Tuesday, shipping carriers expect most services to avoid the Red Sea through China’s Lunar New Year festival, said Ryan Petersen, CEO of Flexport, a logistics technology company. The two weeks leading up to the celebrations is a peak period for shippers, who rush to deliver goods before the holiday, which starts Feb. 10.
Experts say the costs of rerouting vessels around South Africa or through the Panama Canal will increase prices for consumer goods shipped from Asia to the U.S. East Coast.
“It’s about an 8 percent longer journey, which is going to drive prices up quite a bit for ocean freight — that’s a material impact on prices for the goods themselves,” Petersen said. The rising costs will affect the price of “most of the stuff that you see in all the stores,” other than food, raw materials, and energy, he added.

Where's the fucking US Navy? Why the fuck these "houthi" fucks are not embedded into a glass parking lot yet?

RWSGFY says

"Where's the fucking US Navy? Why the fuck these "houthi" fucks are not embedded into a glass parking lot yet?"

Why don't you volunteer and lead the charge? Send us a post card from Aden if you make it that far!

I wonder how many people today would recognize the "Bagdad Bob" above.

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economy is cooling hence inflation will likely decrease more

WASHINGTON, Jan 3 (Reuters) - U.S. job openings fell to nearly a three-year low in November as the labor market gradually cools, which could pave the way for the Federal Reserve to start cutting interest rates this year.

https://www.reuters.com/markets/us/us-job-openings-fall-moderately-november-2024-01-03/

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Job openings falling back in line with the trend line ,, thanks to Wolfman at Wolfstreet website for the graph...
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ad says

GNL says

Inflation will be reported as whatever they want it to be.

yes its government reported inflation...what is your estimate of annual inflation ?

Chic-fil-a has increased prices 21% in the last 2 years. I'd say, food, housing and gas are probably the only(?) data points needed to calculate a greatly improved/accurate measure of inflation. Electronics have zero place in the inflation calculation. Cars might not have a place either because I believe prices are very much dependent on government influence/laws.

GNL says

Chic-fil-a has increased prices 21% in the last 2 years.

From what I've read there is no reported increase in their prices in 2020 and 2021. So is this increase representative of fast food
restaurant inflation from January 2020 to present day ?

https://nypost.com/2024/01/02/business/chick-fil-a-has-raised-its-prices-more-than-20-as-inflation-rages/

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The media, trying to spin Bidenomics as working, has a new refrain. "There is no wage/price spiral".

Then today's jobs report comes out for December and wages increased 4.1% year over year.

It is anyone's guess what January's will bring with what 25 States increasing their minimum wage, government employees getting the largest pay increase in 25 years, along with COLAs for everyone. People will look at January's year over year increase in wages and do a full freak out.

Misc says

government employees getting the largest pay increase in 25 years, along with COLAs for everyone.

Yep, and unfortunately too many of those government employees, along with Social Security and federal retirees will look at their increases and say "Yippee, Biden gave me a pay raise!"

HeadSet says

Yep, and unfortunately too many of those government employees, along with Social Security and federal retirees will look at their increases and say "Yippee, Biden gave me a pay raise!"

military and federal civil servants to get a 5.2% wage increase for 2024

that's 2% above annual inflation, so its not bad of an increase

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WTF do you think that will do to the inflation rate??????

Misc says

WTF do you think that will do to the inflation rate??????

guvmint-reported annual inflation is now at 3.2%

guvmint will continue to report annual inflation as trending downward at least until this november ?

any "adjustments" downward as far GDP and upward as far as inflation and unemployment will be made after november ?
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I have more faith in the Ministry of Truth (BLS). I think they will report an increase in inflation for January and then maybe trending up a bit depending on the price of oil as the unsubstantiated increase in wages creeps through to rent and OER for the rest of the year.

I read on Yahoo Finance today that 216,000 jobs were added in December 2023 versus a forecast of 175,000.

Out of those 216,000 jobs added last December, 52,000 were government jobs and 38,000 were healthcare/social assistance jobs.

Unemployment is now at 3.7% versus forecast of 3.8%.

More government related jobs may create inflation and government debt risks. I heard on news radio a lot of the increase in jobs are related to jobs supporting the surge in immigration.

https://finance.yahoo.com/news/december-jobs-report-us-economy-adds-216000-jobs-shocking-wall-street-133957707.html

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Misc says

the unsubstantiated increase in wages creeps through to rent and OER for the rest of the year.

https://www.federaltimes.com/management/pay-benefits/2023/12/22/federal-employees-cleared-for-52-pay-raise-in-2024/

I read above and the increase in 2023 was 4.6% and for 2024 it is 5.2%. There was a 2.7% increase in 2022. And a 1% increase in 2021

So I suspect the raise in 2024 is to catch up with inflation since it was very high in 2021 and 2022.

Likely the increase in federal civil servant wages in 2025 will be 3% or less.

https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/#:~:text=In%20November%202023%2C%20prices%20had,data%20represents%20U.S.%20city%20averages.

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ad says

I read on Yahoo Finance today that 216,000 jobs were added in December 2023 versus a forecast of 175,000.

Out of those 216,000 jobs added last December, 52,000 were government jobs and 38,000 were healthcare/social assistance jobs.

Unemployment is now at 3.7% versus forecast of 3.8%.

More government related jobs may create inflation and government debt risks. I heard on news radio a lot of the increase in jobs are related to jobs supporting the surge in immigration.

https://finance.yahoo.com/news/december-jobs-report-us-economy-adds-216000-jobs-shocking-wall-street-133957707.html

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From what I’ve read of the December 2023 jobs growth aggregates on CNBC, etc. is the 38,000 for healthcare and 21,000 for social assistance or social welfare.

The 52000 government jobs and 21000 social welfare jobs account for 33.79% of the December 2023 jobs growth :-/

https://www.cnbc.com/2024/01/05/heres-where-the-jobs-are-for-december-2023-in-one-chart.html

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Wage growth is slightly above inflation. See below summary.

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The consumer price index increased 0.3% in December and 3.4% from a year ago, compared with respective estimates of 0.2% and 3.2%

Excluding volatile food and energy prices, the so-called core CPI also rose 0.3% for the month and 3.9% from a year ago, compared with respective estimates of 0.3% and 3.8%.

Much of the increase came due to rising shelter costs. The category rose 0.5% for the month and accounted for more than half the core CPI increase.

Wages adjusted for inflation posted a 0.2% gain on the month, while rising a modest 0.8% from a year ago.

https://www.cnbc.com/2024/01/11/cpi-inflation-report-december-2023-consumer-prices-rose-0point3percent-in-december-higher-than-expected-pushing-the-annual-rate-to-3point4percent.html

“Much of the increase came due to rising shelter costs. The category rose 0.5% for the month and accounted for more than half the core CPI increase.”

- This is the result of making building nose bleeding expensive due to zoning restrictions and all kinds of government fees. Then there’s high borrowing cost to build and/or buy.

Nothing that millions and millions more illegals can't cure.

https://x.com/charliebilello/status/1745453214986809783?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q