Vital Statistics:
Stocks are higher this morning despite a hotter-than-expected PPI report. Bonds and MBS are up.
Inflation at the wholesale level rose 0.4% MOM in January, which was above the 0.3% expectation. If you strip out food and energy, the index rose 0.3%, which was in line with expectations. Transportation and warehousing rose 0.6%, which accounted for a third of the increase. These were probably beginning-of-the-year price hikes, along with an increase in the price of diesel.
“Wholesale price growth came in slightly higher than expected for January, and the read for December was adjusted upward,” said Elizabeth Renter, senior economist at personal finance site NerdWallet. “In other words, inflation at the producer level remains high, and one concern is that this inflation could ultimately be passed along to consumers.”
Termination notices have been sent out to dozens of employees at the Consumer Financial Protection Bureau. These employees were already on probation, so they were probably on their way out any way. Needless to say, the bureaucrats are fighting back.
“This is an unlawfully-executed mass firing,” said Johanna Hickman, senior CFPB litigation counsel who said she received the agency’s dismissal notice. “It’s almost certainly the first salvo in the dismantling of this agency, and a significant percentage of the federal workforce.”
Hickman, who said she started in her CFPB role in June of 2023, said the agency’s new leadership didn’t follow established federal protocol for dismissing probationary employees. “A lot of us are prepared to fight, and we are examining all our legal avenues,” she said.
Whatever the final outcome for the CFPB is, hopefully it means an end to regulation by enforcement, which is akin to a highway with no speed limit signs. The only way to find out the speed limit is to get a ticket.
The Spring Selling season is getting off to a sluggish start as new listings are up 7% and pending sales are down 6%. The increase in new listings is the highest since early 2022, which might indicate that the rate lock-in-effect is easing. It is taking 57 days to get to contract, which is the slowest since March of 2020. Month’s supply is 4.4, which is back to pre-pandemic levels.
“I’ve met with a lot of potential sellers over the last few weeks. Listings typically pick up in March or April, but this year it’s happening earlier,” said Fernanda Kriese, a Redfin Premier agent in Las Vegas. “Some of the sellers are listing because they bought just a few years ago and their home value isn’t increasing as quickly as they’d like, so they’re cutting their losses and moving to a less expensive home. Some are retirees who are downsizing. Buyers have been sidelined this year because of high mortgage rates and uncertainty surrounding politics and the economy, but some are starting to come off the fence.”
Eventually life intrudes and people have to move regardless of the mortgage rate. Don’t forget mortgage rates were in the teens in the early 80s, and relocations, downsizings, etc. still happened.
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