Well, it was the first week of June. Mortgage applications usually peak in May, so we are on the historic “dark side of the moon” for mortgage demand.
Mortgage applications increased 15.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 7, 2024.
The Market Composite Index, a measure of mortgage loan application volume, increased 15.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 26 percent compared with the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index increased 19 percent compared with the previous week and was12 percent lower than the same week one year ago.
Beware of getting too excited about the19% WoW increase. It is 19% off an extremely low number.
The Refinance Index increased 28 percent from the previous week and was 28 percent higher than the same week one year ago.
This charts sums up the seasonal component to prepays.
Energy was the biggest drag on the headline CPI MoM…(Gasoline prices tumbled 3.6% in May from April, one key reason why the headline CPI was flat on the month. )
Source: Bloomberg
Core CPI rose 0.2% MoM (below the 0.3% exp) pulling the YoY change down to 3.4% (from 3.6% and below the 3.5% exp). That is the lowest Core CPI YoY since April 2021…
Source: Bloomberg
Core CPI has not had a down-month since President Biden was elected.
Core Services inflation slowed notably MoM…
Source: Bloomberg
The shelter index increased 0.4 percent in May and was the largest factor in the monthly increase in the index for all items less food and energy.
May Shelter inflation 5.41% YoY, down from 5.55% in April and lowest since April 2022
May Rent inflation 5.30% YoY, down from 5.44% and lowest since May 2022
For context on how important housing costs are to US inflation data, the shelter index rose 5.4% over the last year, making up over two thirds of the total 12-month increase in the all items less food and energy index.
Source: Bloomberg
It does make one wonder were exactly the BLS is getting their BS OER data from…
The full breakdown…
Services INflation remains awkwardly stuck above 5% while Goods DEflation is at its weakest since January 2004…
Source: Bloomberg
SuperCore CPI fell 0.05% MoM – its first drop since Sept 2021, but that left the YoY level still above 5.0%…
Source: Bloomberg
Transportation Services costs tumbled MoM to drag SuperCore lower MoM…
Source: Bloomberg
We note that consumer prices have not fallen in a single month since President Biden’s term began (July 2022 and May 2024 was the closest with ‘unchanged’), which leaves overall prices up over 19.5% since Bidenomics was unleashed (compares with +8% during Trump’s term).
And prices have never been more expensive…
That is an average of 5.4% per annum (almost triple the 1.9% average per annum rise in price during President Trump’s term).
Source: Bloomberg
Since President Biden was elected, food prices at home are up around 21% and food prices away from home are up almost 23%…
And while the Biden administration will continue to gaslight voters with comments like “inflation is tumbling”… every man, woman, and child who actually buys food knows prices have NEVER been higher…
Finally, while the ‘flations’ have broadly tracked M2 lower, we note that M2 YoY is now starting to turn back higher once again…
Source: Bloomberg
Will the next President and Fed head face a 70s redux?
Source: Bloomberg
And is this guaranteed if Powell decides “insurance” cuts are required (for Biden?)
Too much debt should be the theme song for the US! Both for consumers and the Feral government (not a typo!)
Consumer credit increased by +$6.403 billion in April, much softer than consensus estimate of +$10 billion … more notable, however, was March data, given initial read of +$6.274 billion was revised down to -$1.099 billion.
Not to mention $13 trillion in mortgage debt (1-4 unit housing), but at least that is backed by property. Unlike The Feral government who borrows/prints with only a promise.
And growing awfully fast. Note that since the “pandamic”, debt as % of GDP has exceeded 100% and is projected to hit 166% by 2054. But look at the UNFUNDED LIABILITIES the need to be paid ($216+ TRILLION ($641.5k per citizen!). Pretty soon, we (the 99%) will be back on the chain gang paying for endless wars and government corruption. I wish Biden, Schumer, McConnell and other swamp creatures would consider all the spending the government is on the hook for rather than focus on spending that will help them get elected perpetually. There is no middle of the road anymore. The US is broke and has too much debt.
Of course, President Biden wants endless spending on wars (Ukraine, Israel, etc) and now wants an unlimited check to pay for the next pandemics. The Pretenders’ song “My City Was Gone” seems to be appropriate for the US as “My County Is Gone.”
Of course, some “economists” claim that the US can borrow/print unlimited amounts of money … until they can’t.
To begin with, America’s paychecks are bigger than 40 years ago, but purchasing power of those larger paychecks is about the sames as it was 40 years ago. Great job Washington DC!!! … NOT!!!!
Meanwhile, credit card delinquencies are at the highest level since 1991.
Biden’s open borders policies are like something out of the book/film “Gangs of New York.” This time it isn’t Irish immigrants that are rioting/looting, it iis illegal immigrants from Latin America, China, and the Middle East. Essentially replacing native-born workers with foreign-born workers.
Since COVID, the growth in foreign-born workers have blow away the growth in native-born workers. So much so that since 2019, native-born workers have actually lost jobs while foreign-born workers have surged.
But for May 2024, native-born workers lost 463k jobs while foreign-born gained 414k jobs.
In May, part-time jobs soared by 286k jobs while full-time jobs nosedived by -625k jobs.
Finally, the difference between the BLS survey and the more accurate Household Survey is huge!
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 1.8 percent on June 3, down from 2.7 percent on May 31. After recent releases from the US Census Bureau and the Institute for Supply Management, the nowcasts for annualized second-quarter real personal consumption expenditures growth and real private fixed investment growth declined from 2.6 percent and 3.1 percent, respectively, to 1.8 percent and 1.5 percent.
fff
Since I used The Animal’s version of the John Lee Hooker great tune “Boom Boom,” I will use another Animals tune for Joe Biden’s penchant for sniffing little girls. “Baby Let Me Take You Home.”
The Animals band. Not to be confused with the animals in the Biden Administration and Congress.
Job openings in April 2024 dipped to 8,059. Notice the trend (orange line) is below the trend set prior to Covid (red line).
Back in 2023, Socialist Paul Krugman declared that “the war on inflation is over!!! “We” won, at very little cost.” I love when elitists claim “We won!” since clearly 99% of Americans lost since food, housing and car prices up are double digits under Biden.
The problem is that food, energy, shelter, and used cars/trucks are a huge part of Americans consumption basket.
Under Biden, food CPI is up 23%. Home prices are up 34% and used cars/truck prices are up 17.7%.
A note to Paul Krugman, YOU may have won, but the rest of Americans lost. Consumer purchasing power of the US Dollar is DOWN 16.5% Under Biden.
… which seems to suggest that at least according to Chicago-based purchasing managers, the economy is in a depression.
This is how the final number looked relative to expectations.
Looking at the report we find the following:
Business barometer fell at a faster pace; signaling contraction
New orders fell at a faster pace; signaling contraction
Employment fell at a faster pace; signaling contraction
Inventories fell at a faster pace; signaling contraction
Supplier deliveries fell at a slower pace; signaling contraction
Production fell at a slower pace; signaling contraction
Order backlogs fell at a faster pace; signaling contraction
Did nothing rise? One thing did:
Prices paid rose at a slower pace; signaling expansion
So we have not just a depression, but a stagflationary depression in which everything else is going to hell, except prices: they keep on rising.
And while it is unclear what has prompted this unprecedented bearishness (the surely negative contribution from Boeing is likely to blame for a substantial portion of the apocalyptic outlook), one thing is certain: Goldman will have to come up with even more goalseeked surveys that explain away reality and tell us how purchasing managers really should feel…
On the good news front, REAL Gross Domester Income rose to 1.5%.
As copper prices keep on rising. Which is bad news for Biden’s shift to EVs! (Once again, Biden is driven around in gas guzzling Chevy Tahoes/Suburbans and owns a Chevy Corvette). There isn’t enough copper production to build the EVs that Biden wants.
I have testified and sat through many trials in New York city and have never seen a court case quite like the one the Trump lost with the Judge effectively telling the jury to find Trump guilty.
After an unexpected jump in March, pending home sales were expected to drop 1.0% MoM in April as mortgage rates pushed back above 7.00% and stayed there.
Well, the analysts had the direction right but magnitude was way off as pending home sales plunged 7.7% MoM – the biggest drop since Feb 2021 (and below the lowest estimate), leaving sales down 0.7% YoY…
Source: Bloomberg
This is the 29th straight month of YoY declines for non-seasonally-adjusted pending home sales.
This MoM decline pushed the Pending Home Sales Index back to record lows…
Source: Bloomberg
The Midwest saw the biggest drop in pending sales, down 9.5% in April, followed by declines of 8.5% and 7.6% in the West and South, respectively. Contract signings in the Northeast fell 3.5%.
“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” NAR Chief Economist Lawrence Yun said in a statement.
“But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
All driven by affordability crisis as mortgage rates surged back above 7.00%…
Source: Bloomberg
“The prospect of measurable home price declines appears minimal,” Yun said.
“The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs.”
As a reminder, the pending-sales report tends to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold.
Confounded Interest - Anthony B. Sanders 
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