National new home sales metrics; February, 2023

New Home Sales
Sales of new single‐family houses in February 2023 were at a seasonally adjusted annual rate of 640,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.1 percent (±15.3 percent)* above the revised January rate of 633,000, and 19% below the February 2022 estimate of 790,000.

Sales Price
The median sales price of new houses sold in February 2023 was $438,200. The average sales price was $498,700.

For Sale Inventory and Months’ Supply
The seasonally‐adjusted estimate of new houses for sale at the end of February was 436,000. This represents a supply of 8.2 months at the current sales rate.

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National new home construction metrics; 2/23

Building Permits
Privately‐owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,524,000. This is 13.8 percent above the revised January rate of 1,339,000, and 17.9 percent below the February 2022 rate of 1,857,000. Single‐family authorizations in February were at a rate of 777,000; this is 7.6 percent above the revised January figure of 722,000. Authorizations of units in buildings with five units or more were at a rate of 700,000 in February.

Housing Starts
Privately‐owned housing starts in February were at a seasonally adjusted annual rate of 1,450,000. This is 9.8 percent (±15.5 percent)* above the revised January estimate of 1,321,000, and 18.4 percent below the February 2022 rate of 1,777,000. Single‐family housing starts in February were at a rate of 830,000; this is 1.1 percent (±13.9 percent)* above the revised January figure of 821,000. The February rate for units in buildings with five units or more was 608,000.

Housing Completions
Privately‐owned housing completions in February were at a seasonally adjusted annual rate of 1,557,000. This is 12.2 percent (±15.0 percent)* above the revised January estimate of 1,388,000 and 12.8 percent above the February 2022 rate of 1,380,000. Single‐family housing completions in February were at a rate of 1,037,000; this is 1.0 percent (±15.0 percent)* above the revised January rate of 1,027,000.

Conference Board Employment Trends Index; 2/23

The Conference Board Employment Trends Index™ (ETI) rose in February to 118.29 from a downwardly revised 118.14 in January 2023. The Employment Trends Index is a leading composite index for employment. When the index increases, employment is likely to grow as well, and vice versa. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months.

“The Employment Trends Index increased in February, but it has mainly been moving sideways over the past year,” said Frank Steemers, Senior Economist at The Conference Board. “So far, job growth in 2023 has been strong and the Index remaining quite high signals that solid job gains will likely continue over the next months. With such a strong labor market and wage growth still elevated, the Federal Reserve will likely continue to further increase interest rates in its mission to lower inflation.”

Steemers added: “While the labor market remains resilient, higher interest rates are expected to negatively impact job growth later in 2023. Signs of cooling are already visible in some industries. Job gains have slowed in transportation and warehousing, finance and insurance, and layoffs have already been implemented in the information services sector, which includes tech companies. The recent steep decline in job openings in construction may foreshadow reduced hiring over the next months as higher interest rates reduce demand for new construction projects. However, health care and social assistance and leisure and hospitality continue their rapid pace of hiring. Strong demand for workers is becoming more in balance with labor supply as participation rates have risen over the last months. Participation for those aged 25 to 54 is now back at its prepandemic rate of 83.1 percent. Nevertheless, labor shortages remain severe and are unlikely to disappear soon.”

February’s increase in the Employment Trends Index was driven by positive contributions from four of eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Percentage of Firms With Positions Not Able to Fill Right Now, Job Openings, and Number of Employees Hired by the Temporary-Help Industry.

The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

National new home sales; January 2023

New Home Sales
Sales of new single‐family houses in January 2023 were at a seasonally adjusted annual rate of 670,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.2 percent (±20.4 percent)* above the revised December rate of 625,000, and 19.4 % percent below the January 2022 estimate of 831,000.

Sales Price
The median sales price of new houses sold in January 2023 was $427,500. The average sales price was $474,400.

For Sale Inventory and Months’ Supply
The seasonally‐adjusted estimate of new houses for sale at the end of January was 439,000. This represents a supply of 7.9 months at the current sales rate.

Federal Reserve Bank of NY report on household debt and credit; 4Q/22

Household Debt Rises to $16.90 Trillion; Credit Cards Pass Pre-Pandemic High

Total household debt rose by $394 billion, or 2.4 percent, to $16.90 trillion in the fourth quarter of 2022, according to the latest Quarterly Report on Household Debt and Credit. Credit card balances increased by $61 billion to reach $986 billion, surpassing the pre-pandemic high of $927 billion; mortgage balances rose to $11.92 trillion, auto loan balances to $1.55 trillion, and student loan balances to $1.60 trillion. The share of current debt transitioning into delinquency increased for nearly all debt types .

Mortgage balances shown on consumer credit reports increased by $254 billion during the fourth quarter of 2022 and stood at $11.92 trillion at the end of December, marking a nearly $1 trillion increase in mortgage balances during 2022. Balances on home equity lines of credit (HELOC) increased by $14 billion, the third consecutive quarterly increase and the largest increase seen in more than a decade; the outstanding HELOC balance stands at $336 billion. Credit card balances saw a $61 billion increase in the fourth quarter, surpassing the pre-pandemic high of $927 billion. Credit card balances now stand at $986 billion, after declining to $770 billion in 2021Q1. Auto loan balances increased by $28 billion in the fourth quarter, continuing the upward trajectory that has been in place since 2011. Other balances, which include retail cards and other consumer loans, increased by $16 billion. Student loan balances now stand at $1.60 trillion, up by $21 billion from the previous quarter. In total, non-housing balances grew by $126 billion.

Conference Board Leading Economic Index; January, 2023

New York, February 17, 2023…The Conference Board Leading Economic Index® (LEI)for theU.S. fell by 0.3 percent in January 2023 to 110.3 (2016=100), following a decline of 0.8 percent in December. The LEI is now down 3.6 percent over the six-month period between July 2022 and January 2023—a steeper rate of decline than its 2.4 percent contraction over the previous six-month period (January–July 2022).

“The US LEI remained on a downward trajectory, but its rate of decline moderated slightly in January,” said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board. “Among the leading indicators, deteriorating manufacturing new orders, consumers’ expectations of business conditions, and credit conditions more than offset strengths in labor markets and stock prices to drive the index lower in the month. The contribution of the yield spread component of the LEI also turned negative in the last two months, which is often a signal of recession to come. While the LEI continues to signal recession in the near term, indicators related to the labor market—including employment and personal income—remain robust so far. Nonetheless, The Conference Board still expects high inflation, rising interest rates, and contracting consumer spending to tip the US economy into recession in 2023.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased by 0.2 percent in January 2023 to 109.5 (2016=100), after no change in December. The CEI is now up 0.7 percent over the six-month period between July 2022 and January 2023—close to the 0.6 percent growth it recorded over the previous six months. The CEI’s component indicators—payroll employment, personal income less transfer payments, manufacturing trade and sales, and industrial production—are included among the data used to determine recessions in the US. Three of these four CEI components improved in January, with only industrial production being virtually unchanged.

National new home construction metrics; January 2023

Building Permits
Privately‐owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,339,000.
This is 0.1 percent above the revised December rate of 1,337,000, and 27.3% below the January 2022 rate of 1,841,000.
Single‐family authorizations in January were at a rate of 718,000; this is 1.8 percent below the revised December figure of 731,000. Authorizations of units in buildings with five units or more were at a rate of 563,000 in January.
Housing Starts
Privately‐owned housing starts in January were at a seasonally adjusted annual rate of 1,309,000. This is 4.5 percent (±15.9%)* below the revised December estimate of 1,371,000 and 21.4% below the January 2022 rate of 1,666,000. Single‐family housing starts in January were at a rate of 841,000; this is 4.3 percent (±16.4 percent)* below the revised December figure of 879,000. The January rate for units in buildings with five units or more was 457,000.
Housing Completions
Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,406,000. This is 1% (±9.8 percent)* above the revised December estimate of 1,392,000 and 12.8% above the January 2022 rate of 1,247,000. Single‐family housing completions in January were at a rate of 1,040,000; this is 4.4 percent
(±10.4 percent)* above the revised December rate of 996,000. The January rate for units in buildings with five units or more was 349,000.

Conference Board CEO measure of CEO confidence; 1Q/23

                                                                                                                                 

CEO Confidence Picked Up in Q1, but CEOs Remain Pessimistic Entering 2023

Confidence Improved from 2022’s Lows, but Still Signals Caution

New York, NY, February 9, 2023 … The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council stands at 43 to start 2023, up from 32 in the final quarter of 2022. The Measure’s improvement early in Q1 2023 represents an uptick from the extreme weakness seen last year, which brought it to lows comparable to the depths of the COVID-19 recession in 2020. However, it is still below a reading of 50, which suggests CEOs remain cautious at the start of 2023.  (A reading below 50 reflects more negative than positive responses.) A total of 142 CEOs participated in the Q1 survey, which was fielded between January 17 through 30. 

In the survey, 93 percent of CEOs still report they are preparing for a US recession over the next 12-18 months (compared to 98 percent in the Q4 2022 survey). They also still expect that the recession will be brief and shallow with limited global spillover (86%). However, the percentage who are preparing for a deep US recession dropped from 13 percent in Q4 2022 to 7 percent in Q1 2023, signaling that some CEOs are somewhat less pessimistic. Nonetheless, 55 percent of CEOs believe that a global recession is the greatest challenge for their companies.

“CEO confidence rose markedly between Q4 2022 and Q1 2023, but continued to signal a degree of pessimism among CEOs,” said Dana M. Peterson, Chief Economist of The Conference Board. “CEOs’ assessments of both current and expected economic conditions picked up from 2022’s extreme lows, but still are far from 2021’s peak. Roughly 6 in 10 CEOs still say economic conditions are worse than they were six months ago. However, the proportion of CEOs expecting economic conditions to worsen over the next six months declined sharply from 74% last quarter to 48% in Q1, with just 33% now expecting conditions in their own industry to deteriorate.”   

“CEOs continue to see dichotomies in economic conditions and what it means for the future” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board. “While CEOs are still girding for a recession in 2023, they continue to experience a tight labor market. Notably, 81% of CEOs plan wage increases of three percent or more, and most expect to either expand (37%) or maintain (44%) the sizes of their payroll headcounts in the next 12 months. Cost pressures remain high, but there has been some easing in transportation and energy costs. Regarding managing elevated input prices, nearly 6 in 10 say they are passing higher costs on to consumers. Generally, going forward, CEOs will monitor consumer price inflation and GDP as gauges of the health of the US economy in 2023.”

Conference Board Employment Trends Index; January 2023

NEW YORK, February 6, 2023…The Conference Board Employment Trends Index™ (ETI) rose in January to 118.74, up from an upwardly revised 117.06 in December 2022. The Employment Trends Index is a leading composite index for employment. When the index increases, employment is likely to grow as well, and vice versa. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months.

“The ETI rose for the second consecutive month in January, a reversal of a short-lived declining trend in 2022,” said Selcuk Eren, Senior Economist at The Conference Board. “Despite rapid interest rate hikes—which were expected to reduce labor demand—we haven’t seen widespread layoffs. Indeed, hiring was outsized and broadly based in the January employment report. Robust hiring continues to keep the ETI at a very high level and the economy is still experiencing significant job gains in industries where labor shortages have been most acute.”

Eren added: “Labor shortages will continue to be the theme going forward. We have seen job gains in industries—including leisure and hospitality and government—where employment is still below prepandemic levels. Likewise, job openings and voluntary quits are below their historic highs but still above prepandemic levels. The number of employees working in temporary help services—a component of the ETI and an important leading indicator for hiring—increased in January after falling for two consecutive months. This is revised from an originally reported five-month decline. Thus far, job losses seem to be limited to the information sector, which include most tech companies. One sign of rebalancing in the labor market may be slower wage growth. Hourly wage growth—which stands at 4.4 percent year-over-year in January—remains above prepandemic levels, but is on a declining trend after reaching 5.9 percent last year. For the rest of 2023, we anticipate the Federal Reserve will continue increasing interest rates in order to reduce labor market tightness and bring wage growth and inflation under control.”

January’s increase in the Employment Trends Index was driven by positive contributions from seven of eight components: Initial Claims for Unemployment, Real Manufacturing and Trade Sales, Percentage of Firms With Positions Not Able to Fill Right Now, Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Industrial Production, Number of Employees Hired by the Temporary-Help Industry, and Job Openings.

The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

Conference Board Consumer Confidence Index; January 2023

New York, January 31, 2023… The Conference Board Consumer Confidence Index® decreased in January following an upwardly revised increase in December 2022. The Index now stands at 107.1 (1985=100), down from 109.0 in December (an upward revision). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 150.9 (1985=100) from 147.4 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 77.8 (1985=100) from 83.4 partially reversing its December gain. The Expectations Index is below 80 which often signals a recession within the next year. Both present situation and expectations indexes were revised up slightly
in December.

“Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.”
“Consumers’ assessment of present economic and labor market conditions improved at the start of 2023. However, the Expectations Index retreated in January reflecting their concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead. Meanwhile, purchasing plans for autos and appliances held steady, but fewer consumers are planning to buy a home—new or existing. Consumers’ expectations for inflation ticked up slightly from 6.6 percent to 6.8 percent over the next 12 months, but inflation expectations are still down from its peak of 7.9 percent last seen in June.”