We’re Back!
Join me in our ‘Weekly Market Update’ to decipher what to expect in the coming weeks & months.
Happy Friday! Brian Manning here with the weekly update. Let’s get right to it. Monday of this week was Columbus Day, so markets were closed.
Tuesday of this week was a relatively quiet news day, not a lot to talk about there. Wednesday, we got a report out of the UK, this is on their inflation. Overall UK inflation declined from 2% down to 1.7. So it was good to see a decline there because inflation and costs are kind of tied together around the world.
We also got a report from the New York Federal Reserve. This is on consumers and it said that consumers who expect to miss debt payments rose to an all-time high in the last seven years. You know, I bring this up because it looks like there’s just kind of a conflict in the economic readings that we’re receiving and how the consumer is feeling.
It’s interesting to see that you have a tremendous amount of consumers out there that are starting to anticipate missing debt payments. I also bring this up because we had student loans that went back to repayment in October of 2023, and there was a grace period from October 23 to October 24. So that grace period is about to end, and now you’re starting to see a tremendous amount of people that are starting to feel the pressure from student loan payments as well. Thursday, this week, we got ECB. This is the European Central Bank. They cut their rates for the third time.
So we’re a little bit behind them, but it’s good to see them cutting their interest rates. We also got retail sales. Retail sales was a little bit better than expected- came back at an increase of 4.7%. It was expected to be at 3.7%.
So it looks like shoppers are still shopping. The challenge we’re seeing, though, is that debt levels are continuing to rise. There was a report that came out this week that talked about consumers spending money on last year’s holiday season, and 28% of people have not even paid off debt from last year’s holiday season.
So still kind of pulls me back to wonder, based on the economic data that we’re seeing, it’s really painting a very rosy picture in the economy how well is the economy actually doing. Then today, we get some rental info. This comes out from CoreLogic.
This is based on the month of August. This looks at rents. This shows that rents went from 2.8% down to 2.4%. This is very important.
So first of all, we just want to mention this is what’s called a blended rent. So blended rents are a combination of rents are for new leases being signed and also lease renewals. That’s one thing that’s important.
Another reason why this is important is because when we look at the inflation numbers that the Federal Reserve is looking at, with the inflation numbers, a large portion of that is tied into shelter, which is these rental numbers. So the challenge that we’re seeing is the Federal Reserve has a really long lag effect in the numbers that they’re seeing and what they’re using in their inflation numbers. So if we actually took the shelter costs that we’re seeing, so we take CoreLogic, for example, where their rents went down from 2.8% down to 2.4%. If we took those numbers and imputed them into the inflation costs that we’re seeing, inflation right now would only be going up at a rate of 2.2%. Well, the Federal Reserve target for inflation is to have inflation going up no more than 2%.
If we were actually using real life accurate data right now, we would only see inflation going up at a rate of 2.2%. I bring this up because there’s two primary inflation data reports that the Federal Reserve looks at, that’s CPI and the PCE. One is showing inflation at 2.9%. Another one shows inflation at 3.1% because the data that they’re looking at is lagging. But if we looked at actual real-time data, the inflation report would really be at 2.2%. Of course, that would cause the Federal Reserve to be more aggressive in their Fed cuts.
A couple things to mention. Fall Fiesta is coming up. This is our 10th annual Fall Fiesta, taking place 2nd Thursday in November. That’s November 14th from 6 to 10 p.m. at T/aco here in Boulder. Super excited. We started at T/aco 10 years ago, coming back, doing it again there.
This year, it’s a benefit for Trees, Water, People. We’re ecstatic to have such a great non-profit that we’re associated with. And for all the realtors out there, keep an eye out. We have Winning the Buyer presentation, part three, coming out. We have dates starting coming up here at the end. I’m sorry, in the beginning of November.
I think our first day is going to be November 6th. We’re going to run a series of these classes from November 6th to the middle of December. So for all your realtors out there, keep your eye out.
________________________________________________________________________________
Questions? Concerns? Ready to get started with my strategic buyer consultation?
Call me any day of the week, Monday- Sunday to get connected & learn about your options.
It’s never too soon to understand what you can afford!
303-500-3839
Brian@BrianManningTeam.com
LICENSED TO SERVE YOU IN:
- Colorado
- California
- Arizona
- Illinois
- Florida
- Wyoming
Oh yeah, want to get my weekly Friday Market Update straight in your inbox?? Join our mailing list!
Email me directly at Brian@BrianManningTeam.com