Inflation Power! US Core PCE Jumps On Durable Goods Jumps 2.051% (PCE Up 0.4% In December, M2 Up 4.6% YoY)

I called this inflation power!

Underlying U.S. inflation increased more than expected in December, and signs are pointing to a further acceleration in January, which would strengthen expectations that the Federal Reserve would not cut interest rates before June.

The personal consumption expenditures price index, excluding the volatile food and energy components, rose 0.4% after an unrevised 0.2% gain in November, the Commerce Department’s Bureau of Economic Analysis said on Friday. In the 12 months through December, core PCE inflation advanced 3.0% after increasing 2.8% in November.

The PCE price index increased 0.4% in December after rising 0.2% in November. PCE inflation increased 2.9% year-on-year after gaining 2.8% in November.

But in terms of contributions to the 0.4% figure is that durable goods rose 2.051%.

The Fed has been printing money (M2) like there is no tomorrow. With M2 growing at 4.6% YoY in December.

2025 New Home Sales Highest Since 2021 (Down -1.7% MoM In December)

US New Home Sales dipped 1.7% MoM in December (after a 15.5% MoM surge in November)…

…but ended the year at 745k – the highest SAAR since 2021…

“New” home sales have notably decoupled from “used” home sales in the last few years as homebuilders incentivize buyers (reducing margins) and lower prices (reducing revenues)…

Lower mortgage rates support modest further improvements in sales…

Will Trump get rid of tariffs on Canadian lumber?

US Pending Home Sales Collapse To Lowest Level Since 2001

Unfortunately, US pending home sales have collapsed to the lowest level since at least 2001. Nothing has been the same since Biden/Harris administration.

Mortgage rates are still too high by historic standards.

Speaking of Democrats running the economy, New York’s mayor Zoran Mandami (the Ugandan Communist) is seeking to raise property taxes to 9.5% which will hit EVERY New Yorker, not just the billionaires he allegedly wants to tax.

Gimme (Cheaper) Shelter! US Core CPI Falls To Slowest In 4 Years (Real Wage Growth Rises As Rent CPI Rose Only 0.2% In January)

Gimme (cheaper) shelter!

Rate-cut expectations have surged (dovishly) higher this week (along with tumbling Treasury yields) amid a mixed macro picture (Labor market ‘good’, Retail sales bad, Housing ugly).

Today could change all that as CPI for January prints with risk skewed to the upside. January brings annual resets and they tend to surprise on the high side.

Despite the ‘hot’ whisper numbers (and 4 previous Januarys in a row of upside surprises), headline consumer price inflation came in cooler than expected in January (+0.2% MoM vs +0.3% expected). That pulled the headline CPI down dramatically from +2.7% to +2.4% – near the lowest in 4 years.

Core CPI printed +0.3% MoM (in line with expectations), lowering the YoY change in core prices to +2.5% – the lowest since March 2021.

The Shelter index rose 0.2% in January and was the largest factor in the all items monthly increase. The food index increased 0.2% over the month as did the food at home index, while the food away from home index rose 0.1 percent. These increases were partially offset by the index for energy, which fell 1.5% in January.

January saw real average weekly earnings rise 1.9% YoY – its highest since March 2021…

Gap Between 2s And 10s Treasuries Now Widest Since Early 2022 (Recession Coming Despite 3.7% Real GDP Growth?)

The gap between 2s and 10s Treasuies is now the widest it’s been since early 2022.

According to the Atlanta Fed GDP Now report, the current real GDP growth rate is 3.7%. But the yield curve is a forward looking measure.

US Manufacturing Sector Shed -8k Jobs on January (Difficult To Undo Damage Done By Biden and Schumer Including Negative Home Equity)

The manufacturing sector shed -8,000 jobs in January, according to the ADP private employment report.

This marks the 32nd consecutive monthly decline, the longest streak since data began in 2010.

In 2024 and 2025, manufacturing employment fell -154,000 and -177,000, respectively.

Since the 2022 peak, -403,000 jobs have been lost, bringing total manufacturing employment down to 12.483 million, the lowest since November 2021.

The sector has now lost HALF the number of jobs wiped out during the 2020 pandemic.

The US manufacturing sector is in recession.

It is difficult to undo the damage to the economy done by Biden and Chuck Schumer with their insane spending and open borders. Like pushing up housing prices to obscene levels under Clueless Joe.

US Manufacturing Sector Shed -8k Jobs on January (Difficult To Undo Damage Done By Biden and Schumer Including Negative Home Equity).

US layoffs are skyrocketing, largely due to the cost of providing Obamacare to employees. Easier to replace full-time workers with part-time and no healthcare benefits.

Sorry Bad Bunny, Your open border fantasies are a nightmare for law and order.

Average Homeowner Tenure Rises To 8.6 Years (Americans Aren’t Moving Much)

Higher housing prices and higher than normal mortgages produces rising average homeowner tenure.

And Americans aren’t moving.

The ratio of home prices to median household income is the highest since “The Big Short” home price collapse.

Housing Bubble Part Deux! Home Price To Median Household Income Now Higher Than During Catestrophic Home Price Bubble Of 2005-2009 (Job Losses Primarily Women)

Yikes! The ratio of US Home Prices to US Median Household Income is now higher than the ratio during the catestrophic housing bubble during the latter half of the 2000s.

Here is a chart of home prices and median household incone,

The labor market is truly screwed-up. The December jobs report reveals that women account for nearly all labor force losses.

I Ain’t Drunk! Home Buyering Collapses As Home Prices 55% More Costly Than When Biden Became President (Mortgage Rates 64% More Expensive)

I ain’t drunk! But it would help in this housing market where housing prices and mortgage rates are much higher than when Joe Biden became President in January 2020. In fact, the Case-Shiller national home price index is 55% higher than when Sleepy Joe took the reins of Presidency and the 30-year mortgage rate is 64% higher.

Because of higher housing prices and mortgage rates,

The Case-Shiller national home price index is 55% higher than when Sleepy Joe took the reins of Presidency and the 30-year mortgage rate is 64% higher.

As a result of higher housing prices and mortgage rate (and Gavin Newsom’s ludicrous policies), it will take over 30 years to accumulate enough savings to buy a home in San Diego, Los Angeles, San Jose and San Francisco.

I ain’t drunk, but first-time homebuyers will need to be drunk in this housing market.

The Fed trying to help the economy.

The US-Weimar Republic! Gold Soaring With M1 Money Printing (Good Governments Don’t)

Money makes the world go around and gold prices soar!

Gold is looking eerily like gold prices during the Weimar Republic in Germany.

Tomorrow belongs to Socialists like AOC and Bernie Sanders who want to keep spending. Along with Senator Chuck

Good governments don’t print insane quantities of money.