Fact Pack! CPI in-line, shelter still high
By Hightower Las Vegas and RCG Economics on November 19, 2024
The consumer price index increased 0.2% in October, taking the 12-month inflation rate up to 2.6%. Both numbers were in line with expectations.
- The core CPI accelerated 0.3% for the month and was at 3.3% annually, also meeting forecasts.
- Despite signs of inflation moderating elsewhere, shelter prices continued to be a major contributor to the CPI move.
- Inflation-adjusted average hourly earnings for workers increased 0.1% for the month and 1.4% from a year ago.
GDP Outlook
As of Friday, November 15, the “GDPNow model estimate” from the Atlanta Fed for real GDP growth in Q4 2024 was 2.5 percent, unchanged from November 7 (after rounding).
Largest Affordable Housing Project in Nevada History
In case you missed it yesterday, Gov. Joe Lombardo, State Treasurer Zach Conine, and Executive Secretary-Treasurer of the Southern Nevada Building Trades Unions Vince Saavedra announced that the Nevada State Infrastructure Bank had approved $25 million in financing for the first phase of a large affordable housing project.
Desert Pines Golf Course, owned by the City of Las Vegas, will be transformed into master-planned community to support low-income residents in East Las Vegas. The Desert Pines Redevelopment Project will require a workforce of no less than 50 percent Nevada residents and will result in the construction of nearly 1,400 new housing units:
· 1,082 affordable multi-family housing units
· 280 market rate housing units
· A 10,000 sq. ft. community center
· A 10,000 sq. ft. early education center
· A 30,000 sq. ft. job training center
· 75,000 sq. ft. of commercial space.
Planned SmithGroup Desert Pines Redevelopment
As of November 2024
The press release said the entire project is expected to create 2,475 direct construction jobs and 4,905 supplier and induced jobs.
Household Debt, Delinquencies, Collections, Foreclosures, and Bankruptcies
Total household debt rose by $147 billion in Q3 (0.8%) from Q2 — to a whopping $17.9 trillion, according to the Household Debt and Credit Report from the New York Fed.
Year-over-year, total household debt in the U.S. grew by 3.8%. Debt grew due to a mix of factors including bigger borrowing capacity (wage increases and the larger number of workers produced higher personal income), and higher prices for homes, cars, and other goods and services that people tend to finance.
Trend:
As of Q3 2024
Disposable income in U.S. households grew by 0.8% in Q3 from Q2, and by 5.5% year-over-year, according to data from the Bureau of Economic Analysis — essentially at the same pace as total consumer debts.
The debt-to-income ratio of 82% in Q3 was historically low, with few exceptions, as seen in this helpful WolfStreet.com graph:
As of Q3 2024
Household debts that were 90 days or more delinquent by the end of Q3 remained unchanged for the third month and at a historically low 1.8% of total balances outstanding — lower than any time before the “free-money-era” of the pandemic.
Trend:
As of Q3 2024
There were 41,520 consumers with house foreclosures in Q3, down from 47,180 in Q2, and compared to 65,000 to 90,000 in the years 2017 through 2019.
Trend:
As of Q3 2024
All that said, the percentage of consumers with third-party collections dropped to 4.60%, a new record low in the data:
As of Q3 2024
The number of consumers with bankruptcy filings dipped to 126,140 in Q3, another “lower than any time before the free-money era” number.
In Q2, there were 136,180 consumers with bankruptcy filings. In 2017-2019, during the Good Times before the pandemic, the number of consumers with bankruptcy filings ranged from 186,000 to 234,000, which had been historically low.
As of Q3 2024
AI Era
President-elect Trump will take office as governments in the U.S. and other countries seek to benefit from — and set policy for — AI. Brookings will be tracking progress, and as a kickoff to that effort has published a rundown on what Americans can likely expect from the White House and the Republican-controlled Congress when it comes to AI technology. Highlights:
- Reducing or eliminating requirements — As reported in the lead-up to the election, President Trump said he intended to repeal the AI-centric Executive Order issued by President Biden in October 2023. It is likely that he will at least opt to modify it.
- Biden’s regulation-heavy, multi-agency approach included ordering the Department of Commerce to set requirements for the reporting of large AI models to the federal government. Trump is unlikely to force private industry to go to those lengths.
- Increased AI export control — Under President Biden, the Bureau of Industry and Security in the Department of Commerce tightened AI export control rules in October 2022, October 2023, and April 2024. A key aim was to block access by China to advanced AI semiconductor chips. The Trump administration is likely to keep those controls and may even choose to add to them.
- More controls on China — The Biden administration took steps to stay ahead of China in AI, but opened channels for cooperative engagement for managing global AI risks. Trump is unlikely to carry such a partnership forward, and in addition to imposing heavy tariffs on goods from China he is likely to ask Congress to accelerate military and intelligence agency use of AI to stay ahead of China’s growing capabilities.
Much more about Brookings’ AI outlook is here.
Job Security
As of Oct. 2024
COVID
We haven’t published much on COVID this year, but a comprehensive new analysis prompts us to share the following items along with a few graphs from Our World In Data.
Data compiled from around the world shows that in 2020, on average, around 1 in 140 people infected died from COVID-19 — 0.7% of the global population.
In the chart below, you can see how the total number of deaths spiked during waves of the coronavirus compared to the trends in deaths in previous years. The blue line shows the number of weekly deaths during the pandemic; the gray line shows the estimated number of weekly deaths that would have been expected in a year without a pandemic.
Data sources: Human Mortality Database (2023), World Mortality Dataset (2023)
Seen another way:
Doctor Visits
Americans don’t go the doctor nearly as much as residents of most developed countries:
Data source: OECD
Graphic source: Visual Capitalist
As of 2021
On the Horizon
Mike PeQueen: Wednesday’s PCE number is important because, as regular Fact Pack readers know, it is the Fed’s favorite inflation gauge. At this point, the market is only anticipating two one-quarter point rate cuts in 2025. A lower PCE number could change that.
