Rents, The Saving Rate, and Inflation

Week in Review: Mar. 27-31

This week gave us new data regarding apartment rents (Monday), consumer confidence (Tuesday), a bunch of housing indicators, inflation (Friday), and more. U.S. equity markets rallied as investors deem recent bank failures to be largely idiosyncratic. Here’s the bad news: Lamar Jackson’s tweets-to-games-played ratio continues to rise, much to the chagrin of all Americans.

Monday

Gas Prices

Gas prices inched ever-so-slightly lower during the week ending March 27, falling from $3.534/gallon to $3.533/gallon. Now would be a nice time to refill the strategic petroleum reserve, which is currently at its lowest level since 1983. The Energy Secretary says refilling it might take a while…

TSA Checkpoint Travel Numbers

Travel numbers for the week ending 3/28/2023 were just 0.6% below 2019 levels, and they just keep creeping closer. We averaged 2.32 million travelers/day over the past week, just below the 2.34 million/day in 2019.

Apartment List National Rent Report

Rents increased 0.5% in March and have increased for two consecutive months. This uptick follows a five-month stretch of rent declines. On a year-over-year basis, rents are up just 2.6%. Importantly, the national vacancy rate for apartments increased to 6.6%, the highest level since early 2021.

There’s a pretty decent possibility that these data are showing us that the housing component of the Consumer Price Index will decline in coming months.

There’s a lot of interesting data in here (including market-specific rent reports) that we won’t get into here, so feel free to poke around.

Tuesday

Home Price Measures

The FHFA House Price Index increased 0.2% in January and is up 5.3% year over year, while the S&P Corelogic Case-Shiller Home Price Index showed a modest monthly decline in January (-0.2% after seasonal adjustments) and a 3.8% increase year over year.

This WSJ article about how home prices are falling in every market west of Texas and rising in every market to the east made a big splash this week. S&P data by metro area mostly support that notion. Portland (-0.5%), San Diego (-1.4%), San Francisco (-7.6%), and Seattle (-5.1%; imagine if Russell Wilson had stayed) all experienced year-over-year declines in prices, while the remainder of the 20 metros measured by S&P experienced increases (or were flat, in the case of Phoenix).

Conference Board Consumer Confidence

Consumer sentiment improved slightly in March, according to Conference Board’s Consumer Confidence Index. The Expectations Index, which assesses consumers’ short-term outlook, increased slightly, but remains under 80, a level that “often signals a recession within the next year.” Consumers’ sentiment regarding current conditions worsened for the month.

Retail and Wholesale Inventories

Both retail and wholesale inventories increased in February and both are up double digits on a year over year basis. Motor vehicle and parts dealer inventories experienced an especially large bump, increasing 1.9% for the month and 21.5% over the past year. This is probably a good development on the inflation front but makes risk of recession within the next 12 months higher.

Wednesday

Pending Home Sales