Housing Stats, A Shutdown, & More

Week in Review: Sep. 18-22

Ah, Fall in America. The mornings are crisp. The weekends are full of football. Stores are stocked with pumpkin products. It’s a time for traditions, so it’s fitting that the U.S. government is once again staring down the barrel of shutdown.

A shutdown would, quite obviously, lead to bad economic outcomes. A shutdown would also stop government agencies from collecting the data they need to measure and report on inflation, unemployment, GDP, and a bunch of other indicators.

For the Fed, which is trying to decide if rates need to go higher to bring down inflation, it’s a bad time to be flying blind. For your favorite economics newsletter, well, I’m sure we’d find something to write about.

Anyway. This week brought us a Fed interest rate decision, a bunch of updated housing stats, and more.

Monday

NAHB Housing Market Index

Homebuilder sentiment regarding the single family housing market worsened in September, falling to the lowest level since April. Builders were particularly glum about the traffic of prospective buyers, which makes a lot of sense given current mortgage rates. In a related story, Lennar is offering a fixed 4.25% rate (about 3pp below the average 30-year rate right now) to some buyers in Colorado.

Gas Prices

Gas prices rose above $4.00/gallon for the first time since October 2022 and are about $0.33/gallon more expensive than during the same week last year.

Diesel Prices

Diesel prices increased for the ninth straight week, up about $0.09/gallon, and are now at the highest level since mid-December.

On Thursday, Russia announced a ban on the export of diesel (and gas). Russia is the largest seaborne exporter of diesel, shipping about 1 million barrels/day. This ban could push prices higher if it lasts for a while, but markets haven’t reacted like they think it will have a huge impact on prices. Still, this is something to watch.

TSA Checkpoint Travel Numbers

The number of people passing through TSA security bounced back above 2019 levels as Americans continue to travel. Weekday numbers are still in line with (or slightly below) pre-pandemic levels, but weekend travel numbers remain extraordinarily elevated, meaning that leisure travel is up and business travel is down.

Tuesday

New Residential Construction

The number of building permits issued for new residential construction increased 7% in August but is still about 3% lower than in August 2022. There was a large increase in multifamily permitting (up 15% for buildings with 5 or more units) and a small increase in single family permitting (+2%).

The number of housing units started in August fell pretty sharply, down about 11% from July. The decrease was concentrated in the west, and I’m guessing (but don’t know for sure) that extreme heat in areas like Phoenix caused some delays.

Big picture, permitting was still slightly higher in August than in the months leading up to the pandemic. Homebuilders recognize that the U.S. has a severe imbalance between the demand for housing and current supply. They’re going to address that over the next several years/decades by building a ton of homes, but they’ll probably do so at a faster rate once mortgage rates fall back down to a reasonable level.

Amazon Hiring 250,000 Holiday Workers

The header really says it all. The fact that Amazon is staffing up for the holidays, hiring 100,000 more seasonal workers than they did last fall, suggests that their (not so small) army of economists and analysts think the American consumer is going to keep spending through the end of the year.

Wednesday

Interest Rate Decision