Fact Pack! Key Fed Inflation Rate Falls

By Hightower Las Vegas and RCG Economics on July 28, 2023

Inflation kept cooling in June, per new data released by the Commerce Department today. So-called core PCE (personal consumption expenditures) rose 4.1 percent from a year ago; the estimate was for 4.2 percent. The annual rate was the lowest since September 2021 and marked a decrease from the 4.6 percent pace in May.

Consumers continued to spend, with expenditures up 0.5 percent on the month.

The numbers come just two days after the Fed announced a quarter percentage point interest rate increase, its 11th hike since March 2022.

Compensation Costs

Compensation costs increased 1.0 percent for U.S. civilian workers, seasonally adjusted, from March 2023 to June 2023. Over the year, total compensation rose 4.5 percent, wages and salaries rose 4.6 percent, and benefit costs rose 4.2 percent.

Source: U.S. Bureau of Labor Statistics as of March 2023

Among private industry occupational groups, compensation cost increases for the 12-month period ending in June 2023 ranged from 4.1 percent for natural resources, construction, and maintenance occupations to 5.3 percent for service occupations.

Within industry “super sectors,” compensation cost increases ranged from 3.5 percent for financial activities to 5.4 percent for leisure and hospitality.

Compensation costs for state and local government workers increased 4.9 percent for the 12-month period ending in June 2023, compared with an increase of 3.4 percent in June 2022. Wages and salaries increased 4.7 percent for the 12-month period ending in June 2023 and 3.2 percent a year ago.

GDP

The Bureau of Economic Analysis estimated Thursday that real gross domestic product—which is adjusted for inflation—grew at an annual rate of 2.4 percent in Q2 2023, exceeding economists’ consensus expectations and Q1’s 2.0 percent annual pace.

HELOCs

Analysis of Google search data by luxury real estate platform RubyHome reveals that searches for ‘HELOC’ (home equity line of credit) rose 305 percent as of July 2023 — the highest level in internet history in the U.S. The number comes as Americans face rising property and rent costs, with fears of a recession still looming.

The top 10 states searching the internet for HELOCs are:

Hawaii
Utah
Colorado
Washington
Idaho
Tennessee
California
Arizona
Nevada
Florida

New Listings

Nevada ranks fourth among the states with the highest rate of new property listings per capita over the past 3.5 years, per RubyHome. Approximately 216,380 new home listings were reported in Nevada between January 2020 and June 2023. The state saw 18,406 new homes listed per 100,000 residents during that period.

Florida topped the list, accumulating 1.7 million new property listings over the period at a rate of 20,665 per 100,000 homes. On average, homebuyers in the sunshine state have access to 42,365 new listings per month.  

Idaho took second place, with 19,427 new home listings per 100,000 properties.  

South Carolina ranked third for new property listings, and Utah rounded out the top five.  

 More than 400,000 new properties enter the U.S. market each month.

Rentals

The rental market has hit a major milestone: Nationwide rent growth has fallen below zero for the first time since the early pandemic as of July, per ApartmentList.com.

Rents in Las Vegas increased 0.1 percent in July, compared to a 0.3 percent increase nationwide.

Year-over-year rent growth in Las Vegas now stands at -4.3 percent, down from +11.1 percent one year ago.

Since the start of the COVID-19 pandemic in March 2020, citywide rents have risen a total of 29.4 percent, though.

Today the median rent in Las Vegas is $1,086 for a one-bedroom unit and $1,388 for a two-bedroom unit. The citywide apartment vacancy rate stands at 8.9 percent, up 3.5 percentage points from this time last year.

Trend graph for annual change in median rent (U.S.):

As of July 2023

Rents increased in July in 71 of the nation’s 100 largest cities, but for the most part the hikes have fallen below seasonal expectations.

As of July 2023

In early 2022, all 100 of America’s largest cities were posting positive year-over-year rent increases. The first to turn negative were the early “zoom towns” in states like Arizona, Nevada, and Idaho that surged in popularity in 2020 when much of the nation’s workforce went remote.

Check out the full national rent report.

Survey Says…

The battle in the minds of Americans between prioritizing the environment (even at the risk of curbing economic growth) or the economy (even if the environment suffers), has been a bit of a rollercoaster over the last few decades.

As the following Statista infographic illustrates, the struggle between the two really came to a head as the effects of the 2008 financial crisis started to bite. In March 2009, the economy had shifted to the forefront of most people’s minds, with a 51 percent choosing the economy as a priority, compared to 42 percent favoring the environment.

Trend graph:

As of March 2022

Mother Earth did eventually start to gain control over American hearts and minds again between 2015 and 2019, but the Covid-19 pandemic from 2020 onward narrowed the gap between the slight majority thinking conservation is paramount and those who feel that economic development should be given priority over conservation efforts.

Look Both Ways

Pedestrian deaths in the U.S. are the highest they’ve been in 40 years, per Axios.

Drivers struck and killed at least 7,500 pedestrians last year, according to new estimates from the Governors Highway Safety Association, a nonprofit organization focused on road safety

Pedestrian deaths have been rising since 2010, and the trend got significantly worse during the pandemic.

Most pedestrian deaths don’t happen in intersections. They’re much more common on roads that don’t have sidewalks. Speeding is a major factor, too, especially on smaller roads.

As of 2022

Global Consumer Class

Brookings is out with an explainer on how the world’s consumer class will grow from 4 billion to 5 billion people by 2031.

Asia, led by India and China, is projected to contribute 81 percent of the new consumers in 2024. India will add 33 million new consumers—overtaking China, which will add 31 million.

As of June 2023

These countries will add more than 1 million consumers in 2024:
- Indonesia
- Bangladesh
- Vietnam
- Pakistan
- U.S.
- Brazil
- Nigeria
- Egypt
- Turkey
- Thailand
- Mexico

Graph:

As of June 2023

Consumer spending is set to increase by $2.3 trillion in 2024, equal to global military spending or adding another Germany to the global consumer economy.

World Data Lab defines the consumer class as those spending at least $12 per day (measured in 2017 purchasing power parity). Each year, the planet typically adds between 110 million and 130 million new consumers.

The report says business leaders should anticipate a new world with 5 billion consumers by 2031. And barring another pandemic or a major economic shock, the world will add another one billion consumers in the subsequent eight years.

Gaming Win

Nevada’s nonrestricted gaming licensees reported a total “gaming win” of $1,245,814,727 for June 2023. This amounts to a 2.44 percent decrease compared to June 2022, but for the fiscal year (July 1, 2022 through June 30, 2023), gaming win has increased 3.25 percent.

Details:

Source: Nevada Gaming Control Board as of June 2023

The state collected $78,561,494 in percentage fees during the month of July 2023. This represents a 1.45 percent (or $1,122,776) increase compared to the prior year’s July.

Health Care Pros

Health care professionals are generally well paid in the U.S. and dominate the country’s highest earning jobs. According to data from the U.S. Bureau of Labor Statistics, cardiologists are the best paid with annual mean wages of $421,330 as of 2022. Statista graph:

Heterochronic Parabiosis

A group of scientists have published a paper after finding that older mice lived six to nine percent longer after having their blood vessels hooked up to younger mice’s circulatory systems for three months.

Back to School

The Census Bureau is out with a back-to-school infographic:

As of July 27, 2023

On the Horizon

Mike PeQueen: Now that a few economists have backtracked on their recession calls, Friday’s employment report will be in focus. Recessions in presidential election years are perfectly correlated with incumbents losing. Stay tuned…

Next week’s MarketWatch calendar: